ECB Must Act Decisively as Recession Looms and Markets Collapse

The European Central Bank (ECB) must act decisively as recession loomed and markets collapse looms. It is not only the ECB that must act as austerity is the “word” in Europe.

The ECB, to save the Eurozone, should allow the ECB to create its own money to buy government bonds. The ECB should lend large sums of money and then use its huge printing press to make euros.

This would give the ECB unlimited cash injection and thus create a vast amount of demand for the currency. The money would become so plentiful that it would reach levels well above what the ECB could create on its own.

The country needs such a boost, especially since the largest economy in the Eurozone has shrunk. It will be a huge financial boost and push the economy into recovery, without spiraling the eurozone back into the deepest depression since the Great Depression.

Of course, this also calls for a discussion with the European Union that is led by the European Central Bank (ECB). It is up to the ECB to act decisively and generate a viable solution. It is not up to the ECB to dictate what each nation should do.

The ECB has lent millions of euros to many countries. Those countries have spent that money. The money was supposed to be used to stimulate growth, but instead it has helped finance governments that were already in trouble and acted as a stimulus for already reeling economies.

That was never a good idea. Once it started lending money to troubled countries, it did not stop. It ended up financing corrupt leaders, protecting entrenched interests and protecting unsustainable forms of capitalism.

That is why, if that money had been used for the purposes intended, and propped up struggling governments, it would have been a lot better than bad decisions. By creating money out of thin air and being unable to borrow from the central bank at a reasonable interest rate, the ECB broke its promise to the people of Europe.

The ECB made a mistake, but it was not the first European central bank to make such a blunder. When Italy started bailing out its banks in order to stave off a collapse, it was not the first time the ECB has acted irresponsibly.

In Italy, it rescued local banks. When France failed to repay its debts, it chose to fund a bailout rather than let the debt go into default and let the markets realize that France was a poor country.

It is obvious that if the European countries were to implement the ideas I put forth above, they would have solved their problems. If they tried to act responsibly and generate their own money to help finance the government deficit, they would have done it before the crisis began.

It was not the fault of the banks and credit card companies that caused the crisis, nor was it the fault of the people who lost their jobs. It was the European Central Bank that caused the crisis, not because it was wrong to lend money to countries that were already facing trouble, but because it did not act decisively and created too much money.

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