February 8, 2012

Water into Wine

Posted in Audio & Podcasts · 3 comments ·

  1. lar

    Excuse me for beeen dumb, but why does the central bank lend money to Private banks at 1% to onlend at 5%, why can they not just lend it to the governments in trouble directly at 1%?

    • Because the motivation for Central Bank lending is to prop up what are essentially bankrupt institutions, the banks. Governments get to sell their bonds and the ECB and EU get to continue to pretend that there is no problem in the Eurozone. Its a piece of theater of course, and every citizen of the EU will end up paying for this sooner or later.

    • …and no of course its not a dumb question, its a very good and relevant question. The only dumb question is the one you don’t ask :)

You must log in to post a comment.
× Hide comments