The Banksters Have Gotten to the Right German

Germans citizens are against bailouts of Greece, Italy and Spain. They have been the cog in the wheel that has prevented all out European Central Bank money printing. That may be changing. The most important German, who will have the most say with regard to ECB money printing, is now in favor of bailouts and money printing.

NYT writes:

A top German official at the European Central Bank on Monday defended the bank’s plans to intervene in bond markets as a way of pushing down borrowing costs for business and encouraging economic growth. It is a position that puts him at odds with the president of Germany’s own central bank and highlights a growing split in the country’s policy-making elite.

Jörg Asmussen, a German who is a member of the E.C.B.’s executive board, said during a speech in Hamburg that bond buying by the European bank had become necessary because distortions in the market for government debt had interfered with monetary policy and prevented cuts in official interest rates from trickling down to companies that need credit.

By framing the issue as a matter of business growth, rather than government bailouts, Mr. Asmussen seemed to be taking a stance that might appeal to German political opponents of market intervention by the E.C.B. — of which Germany is the biggest financial contributor.

Up until now, German Chancellor Angela Merkel has only given in at the last minute to short-term bailouts, but now it looks like the fix is in and the big move is about to be made. Merkel and Asmussen appear ready to support major ECB money printing.

NYT again (my bold):

Mr. Asmussen’s remarks came only a day after Jens Weidmann, president of the German central bank, the Bundesbank, fiercely criticized plans by the E.C.B. to intervene in bond markets.

The stark difference in views between the two officials is surprising because they have been seen as close allies. They both studied economics at the University of Bonn, and both served as high-ranking officials in the German government — Mr. Asmussen as a top aide in the Finance Ministry, and Mr. Weidmann as economics advisor to Chancellor Angela Merkel — before becoming central bankers.

In recent days Ms. Merkel has moved carefully away from hard liners who argue that troubled euro zone countries must largely solve their own problems. On Monday a leader of her governing coalition repeated her warning to party members to stop speculating about Greece leaving the euro.

“I believe that at the end of the day, everyone has to ask themselves the basic question, Do we want a currency union and do we want to take all responsible steps possible to maintain this currency union?” said Michael Meister, one of the leaders of the conservative caucus in the German Parliament.

Ms. Merkel and Mr. Asmussen operate in different policy spheres, and Mr. Asmussen is formally supposed to represent all of Europe and not just Germany. But their alignment on this issue provides a counterweight to the school of thought represented by Mr. Weidmann.

Bottom line: The great euro inflation appears to be on the launching pad