by David Stockman
David Stockman’s Contra Corner
Mario had a bee in his bonnet this morning. Apparently, the chorus of German voices pointing to the obvious—- that his policies are killing savers, insurance companies, pension funds and banks—-got his dander up:
“We have a mandate to preserve price stability for the whole of the euro zone, not only for Germany,” he said. “We obey the law, not the politicians, because we are independent.”
There you have in brief the whole rationalization for the monetary madness that Draghi and his kindred central bankers have unleashed on the world. They claim that their rubbery statutory mandates to pursue the equivalent of economic apple pie, such as ‘price stability’, leads in a straight, unbreakable line of logic and monetary science to the lunacy of negative 0.4% money market rates and $90 billion per month of bond-buying.