Is the ECB Printing Money?

The ECB has in place a “bond sterilization” program by which it buys bonds issued by troubled EU nations, and then tenders for deposits.  In other words, the ECB buys bonds while it borrows money from (European) banks, thus funding the purchases.  But this week its tender came up short so in effect it bought more bonds than it had borrowed funds to invest.  We will see if the situation is remedied in the coming days or if the ECB effectively starts printing money which would be a slap in Germany’s face.

-Billy Ray

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