Today Mario Draghi called on the ECB to inject 1.1 trillion Euros ($1.3 trillion) into government bonds in a bid to stave off deflation. The ECB has been strangely inactive as southern Europe experiences economic crisis and depression, and even northern Europe is starting to stagnate. The one bright spot has been the United Kingdom, where the Bank of England has been much more aggressive in changing expectations of growth.
There’s still tense debate to come, but the fact remains that QE worked in the United States, it has worked in the United Kingdom, and its starting to work in Japan. If the ECB has finally caught on, this is great news for the economies of Europe and indeed the rest of the world. When the Swiss committed monetary suicide, conditions tightened (because expectations tightened). But with the ECB news today, markets are breathing a sigh of relief.
I’m trying out Seeking Alpha’s premium content submissions. If you want to read more about the investment opportunities these economic developments create, read about it here.