The ECB, QE and escaping stagnation (with an Australian perspective)

Who In Australia would trust the Abbott and Hockey (Liberal government) alliance with the Business Council of Australia to manage the economy in the next financial crisis?
Remember that when Rudd Labor came to office in 2007 it soon had to manage the impact on Australia of a global economic crisis, usually called the GFC. In a mild, Keynesian way they did a reasonable job.
Well, the Davos global ruling class gathering, frantically seaching for “inclusive capitalism”, and Mario Draghi are now talking and acting such that the handling of the 2007 crisis is now leading towards another global economic crisis, even before any real sign of recovery from the first one.
There is no chance that the Abbott government and the BCA will handle this “new” situation democratically, that is in the interests of the majority. Their current standards of competence suggest they wont even be able to handle it competently for their very own and precious 1%.
Well, that leaves the issue of the propect of a new Labor government, under its right wing led by Bill Shorten. What will they do? The next few months will tell us more.

Michael Roberts Blog

The announcement by Mario Draghi at the council meeting of European Central Bank (ECB) yesterday that the ECB and the national central banks of the Eurozone would inject €1.1trn of new credit over the next 18 months into the area’s banks has certainly had a quick result. The euro dropped to an eleven-year low against the US dollar.

euro

The ECB has finally joined the Federal Reserve, the Bank of England and the Bank of Japan is what is called outright quantitative easing (QE). This is the outright purchase by the central banks of government, corporate and real estate bonds paid for by ‘printing money’, or more precisely electronically creating reserves of money in banks.

Up to now, the ECB has shied away from doing this QE and instead merely lent money or credit to the banks for increasingly longer periods of time (now up to three years) at virtually zero…

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I am a retired left wing and labour movement activist. Before that I worked for a long time in the Australian union movement in union education, Australian and international solidarity and organising. I am also active in Cuban solidarity, the SEARCH FOUNDATION, and promoting discussion, debate and action about green socialism based on workers control and social ownership.

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