New ECB President, Christine Lagarde, Praises Negative Interest Rates
|Christine Lagarde, the head of the IMF, will become the head of the ECB. Already, she has made a fool out of herself. Following a two-day marathon in which "Spitzenkandidat" Failed and Merkel's Plan A and Plan B Dumped Lagarde will now head the ECB and give up her job at the IMF. Nearly Perfect It's rare to find someone who is consistently wrong on everything. Christine Lagarde, whom the EU just anointed as the president of the ECB, comes close. To emphasize the point, Negative Interest Rates Benefit the Global Economy, Says IMF Chief Christine Lagarde. Subzero interest rates in Europe and Japan are “net positives” for the global economy, International Monetary Fund chief Christine Lagarde said Tuesday, though she warned that the side effects of unorthodox central-bank policies should be closely monitored. “We see the recent introduction of negative interest rates by the ECB and Bank of Japan —though not without side effects that warrant vigilance—as net positives in current circumstances,” Ms. Lagarde said. Compromise Candidate French President Emanual Macron proposed Lagarde as the "compromise candidate". Even Lower Yield on the German 3-month bond is -0.556%. Yield on the German 10-year bond is -0.373%. "Net Positive" Nonsense by the Numbers Negative interest rates Diminishing Returns If negative interest rates did any good, why are Europe and Japan in such miserable shape? Yesterday, I noted the BIS Warns of Diminishing Returns of Monetary Policy, Zombies, Junk, Complacency. BIS Comments Globally Globally, central bankers are hell bent on pursuing the same bubble-blowing policies that led two huge economic busts. This third bubble is the biggest of all but they do not see it. Meanwhile, there is no impetus for change anywhere, except in the wrong direction! Wrong Cake The appointment of Lagarde is icing on the "If it doesn't work, we will keep doing it, until it does" cake. Rules, Rules The ECB is running out of sovereign bonds to buy, by current rules. Lagarde will also face a test regarding budget deficits and debt in Italy and the deficit in her own country, France. How many rules will Lagarde break?
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