Collusion_How Central Bankers Rigged the World Read online

  CHAPTER 6: EUROPE PART II: THE DRAGHI MONEY MACHINE

  1. Gavin Jones, “Mario Draghi: The Rise of ‘Mr Somewhere Else,’” Reuters, April 26, 2011, www.reuters.com/article/us-ecb-draghi-idUSTRE73P4EF20110426.

  2. “Mario Draghi: Current Member Biography,” Group of Thirty, http://group30.org/members/bio_current/Draghi.

  3. “The Changing Role of the European Central Bank” (discussion at Brookings Institution, Washington, DC, November 2, 2011), www.brookings.edu/events/the-changing-role-of-the-european-central-bank/.

  4. Landon Thomas Jr. and Jack Ewing, “Can Super Mario Save the Day for Europe?” New York Times, October 29, 2011, www.nytimes.com/2011/10/30/business/mario-draghi-into-the-eye-of-europes-financial-storm.html.

  5. Though even that was down 29 percent by March 2012 compared to the prior year, and Germany had recorded its lowest growth for a quarter since 2002. Floyd Norris, “Outside Europe, German Trade Surplus Soars,” New York Times, May 11, 2012, www.nytimes.com/2012/05/12/business/economy/outside-europe-german-trade-surplus-soars-off-the-charts.html.

  6. “France’s Hollande: Euro Zone Must Ensure Stable Currency,” Reuters, February 5, 2013, www.reuters.com/article/us-eu-france-idUSBRE9140DD20130205.

  7. “Xi Concludes South Africa Trip,” Embassy of the People’s Republic of China in the Republic of South Africa, March 29, 2013, http://za.china-embassy.org/eng/znjl/t1027029.htm.

  8. Denise Roland, “Merkel Falters on Economic Unity in Eurozone,” Telegraph (London), April 25, 2013, www.telegraph.co.uk/finance/financialcrisis/10017915/Merkel-falters-on-economic-unity-in-eurozone.html.

  9. Elizabeth Pineau, “French Socialists Call for Tougher Stance on Merkel,” Reuters, April 26, 2013, www.reuters.com/article/uk-france-socialists-idUKBRE93P14Z20130426.

  10. Michael Steen, “Merkel Speech Highlights European Divide,” Financial Times, April 25, 2013, www.ft.com/content/665e1018-adae-11e2-a2c7-00144feabdc0.

  11. Mario Draghi and Vítor Constâncio, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, May 2, 2013, www.ecb.europa.eu/press/pressconf/2013/html/is130502.en.html.

  12. Rajeshni Naidu-Ghelani, “European Banks Haven’t Been This Cheap Since 80s,” CNBC, May 30, 2013, www.cnbc.com/id/100775405.

  13. “The New Sick Man of Europe: the European Union,” Pew Research Center, May 13, 2013, www.pewglobal.org/2013/05/13/the-new-sick-man-of-europe-the-european-union/.

  14. Heather Stewart, “Eurozone Interest Rates Cut to a Record Low of 0.5%,” Guardian (Manchester), May 2, 2013, www.theguardian.com/business/2013/may/02/eurozone-interest-rates-ecb.

  15. Larry Elliott and Helena Smith, “IMF ‘to Admit Mistakes’ in Handling Greek Debt Crisis and Bailout,” Guardian (Manchester), June 5, 2013, www.theguardian.com/business/2013/jun/05/imf-admit-mistakes-greek-crisis-austerity.

  16. Ibid.

  17. “Mario Draghi Faces Dilemma over Eurozone Inflation Level,” Financial Times, October 16, 2013.

  18. Greece: Ex Post Evaluation of Exceptional Access under the 2010 Stand-By Arrangement (IMF Country Report No. 13/156, International Monetary Fund, Washington, DC, June 2013), www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf.

  19. Alister Bull and Pedro da Costa, “Bernanke Says Fed Likely to Reduce Bond Buying This Year,” Reuters, June 19, 2013, www.reuters.com/article/us-usa-fed-idUSBRE95I05P20130619.

  20. Anna Yukhananov, “Update 1—IMF: Greece Making Progress but Must Do More on Taxes,” Reuters, May 6, 2013, www.reuters.com/article/imf-greece-idUSL2N0DN0FO20130506.

  21. Marcus Bensasson and Eleni Chrepa, “Greece’s Labor Unions Hold General Strike Over Job Cuts,” Bloomberg, July 16, 2013, www.bloomberg.com/news/articles/2013-07-16/greece-s-labor-unions-hold-general-strike-over-job-cuts.

  22. Matthew Boesler, “Italian Recession Becomes Longest on Record,” Business Insider, August 6, 2013, www.businessinsider.com/italian-recession-now-longest-on-record-2013-8.

  23. “ECB and the People’s Bank of China Establish a Bilateral Currency Swap Agreement” (press release), European Central Bank, October 10, 2013, www.ecb.europa.eu/press/pr/date/2013/html/pr131010.en.html.

  24. Alanna Petroff, “Europe, China Agree Currency Deal,” CNN Money, October 10, 2013, http://money.cnn.com/2013/10/10/news/economy/ecb-china-currency/index.html?iid=EL.

  25. Mario Draghi and Vítor Constâncio, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, October 2, 2013, www.ecb.europa.eu/press/pressconf/2013/html/is131002.en.html.

  26. “ECB Establishes Standing Swap Arrangements with Other Central Banks” (press release), European Central Bank, October 31, 2013, www.ecb.europa.eu/press/pr/date/2013/html/pr131031.en.html.

  27. Ian Traynor, “Austerity Pushing Europe into Social and Economic Decline, Says Red Cross,” Guardian (Manchester), October 10, 2013, www.theguardian.com/world/2013/oct/10/austerity-europe-debt-red-cross.

  28. Ibid.

  29. Ibid.

  30. Mario Draghi, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, November 7, 2013, www.ecb.europa.eu/press/pressconf/2013/html/is131107.en.html.

  31. Eva Taylor, “ECB Cuts Rates to New Low, Ready to Do More If Needed,” Reuters, November 6, 2013, www.reuters.com/article/us-ecb-rates-idUSBRE9A600O20131107.

  32. Fion Li, “Yuan Passes Euro as 2nd-Most Used Trade-Finance Currency,” Bloomberg, December 3, 2013, www.bloomberg.com/news/articles/2013-12-03/yuan-passes-euro-to-be-second-most-used-trade-finance-currency.

  33. Wanfeng Zhou, “Euro Rises to More Than 2-Year High vs. Dollar; Yen Falls,” Reuters, December 26, 2013, www.reuters.com/article/us-markets-forex-idUSBRE9BJ0EF20131227.

  34. Phillip Inman, “Euro Plummets After ECB Warns Currency Zone May Need More Support,” Guardian (Manchester), January 9, 2014, www.theguardian.com/business/2014/jan/09/euro-european-central-bank-unemployment-inflation.

  35. Ibid.

  36. Ibid.

  37. Janet L. Yellen, “Monetary Policy and Financial Stability” (speech, 2014 Michel Camdessus Central Banking Lecture, International Monetary Fund, Washington, DC, July 2, 2014), www.federalreserve.gov/newsevents/speech/yellen20140702a.htm.

  38. “Monetary Policy Decisions” (press release), European Central Bank, June 5, 2014, www.ecb.europa.eu/press/pr/date/2014/html/pr140605.en.html.

  39. Benoît Cœuré, “Assessing the Implications of Negative Interest Rates” (speech, Yale Financial Crisis Forum, Yale School of Management, New Haven, CT, July 28, 2016), www.ecb.europa.eu/press/key/date/2016/html/sp160728.en.html.

  40. Mario Draghi, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, June 5, 2014, www.ecb.europa.eu/press/pressconf/2014/html/is140605.en.html.

  41. Ibid.

  42. Alessandro Speciale and Andre Tartar, “Draghi Seen Delivering $1 Trillion to Banks in ECB Offer,” Bloomberg, July 14, 2014, www.bloomberg.com/news/articles/2014-07-13/draghi-seen-delivering-1-trillion-free-lunch-to-banks.

  43. John O’Donnell and Eva Taylor, “ECB Hurls Cash at Sluggish Euro Zone Economy, Says Not Done Yet,” Reuters, June 5, 2014, www.reuters.com/article/us-ecb-rates-decision-idUSKBN0EG1EN20140605.

  44. “Eurozone Inflation Slips Further into the ‘Danger Zone,’” BBC News, July 31, 2014, www.bbc.com/news/business-28583232.

  45. Jaime Caruana, “Stepping Out of the Shadow of the Crisis: Three Transitions for the World Economy” (speech, Bank for International Settlements Annual General Meeting, Basel, Switzerland, June 29, 2014), www.bis.org/speeches/sp140629.pdf.

  46. “IMF Executive Board Concludes 2014 Article IV Consultation on Euro Area Policies” (press release), International Monetary Fund, July 14, 2014, www.imf.org/external/np/sec/pr/2014/pr14341.htm.

  47. “Monetary Policy Decisions” (press release), European Central Bank, September 4, 2014, www.ecb.europa.eu/press/pr/date/2014/html/pr140904.en.html.

  48. Ibid.

  49. Ian Chua and Cecile Lefort, “G20 Says
Nearing Growth Goal, but More Needed from Europe,” Reuters, September 20, 2014, www.reuters.com/article/us-g20-australia-idUSKBN0HE0PD20140921.

  50. Jia Lynn Yang, “Jack Lew Had Major Role at Citigroup When It Nearly Imploded,” Washington Post, January 10, 2013, www.washingtonpost.com/business/economy/jack-lew-had-major-role-at-citigroup-when-it-nearly-imploded/2013/01/10/a913431e-5b6b-11e2-9fa9-5fbdc9530eb9_story.html?utm_term=.ab8fe88b2517.

  51. “Head of Germany’s Central Bank Criticises ECB Stimulus Plan,” Reuters, September 21, 2014, http://uk.reuters.com/article/uk-ecb-policy-weidmann-idUKKBN0HG07Z20140921.

  52. Stefan Riecher and Alessandro Speciale, “Draghi Sees ECB Becoming More Active in Fight for Euro,” Bloomberg, September 22, 2014, www.bloomberg.com/news/articles/2014-09-22/draghi-says-risks-to-euro-area-economy-clearly-on-the-downside.

  53. “Mario Draghi: Interview with Lithuanian Business Daily Verslo Zinios,” by Dalius Simenas, Bank for International Settlements, September 25, 2014, www.bis.org/review/r140926d.htm.

  54. “Dollar-Yen Breaches 110 for First Time Since 2008,” CNBC, September 30, 2014, www.cnbc.com/2014/09/30/dollar-yen-rises-above-110-for-first-time-since-august-2008.html.

  55. Michael Flaherty and Jonathan Spicer, “US Fed Frets over Strong Dollar, Global Woes: Minutes,” Reuters, October 8, 2014, www.reuters.com/article/us-usa-fed-idUSKCN0HX20M20141008.

  56. Mario Draghi, statement (at the thirtieth meeting of the IMFC, Washington, DC, October 10, 2014), www.ecb.europa.eu/press/key/date/2014/html/sp141010. en.html.

  57. “Euro to Fall Below Parity with Dollar by 2017—Deutsche,” Reuters, October 7, 2014, www.reuters.com/article/markets-forex-deutsche-idUSL6N0S214220141007.

  58. Mario Draghi, “Monetary Policy in the Euro Area” (keynote speech, Frankfurt European Banking Congress, Frankfurt am Main, November 21, 2014), www.ecb.europa.eu/press/key/date/2014/html/sp141121.en.html.

  59. Phillip Inman, “ECB to Spend €1 Trillion on Covered Bonds to Kickstart Euro Economy,” Guardian (Manchester), October 20, 2014, www.theguardian.com/world/2014/oct/20/ecb-to-pump-one-trillion-euros-into-eurozone.

  60. Jeff Black, “ECB Fails 25 Banks as Italy Fares Worst in Stress Test,” Bloomberg, October 26, 2014, www.bloomberg.com/news/articles/2014-10-26/ecb-test-shows-25-billion-euro-capital-gap-at-euro-banks.

  61. Heidi Moore, “The Fed Has Quietly Ended Its Stimulus. Now the Hard Work Really Begins,” Guardian (Manchester), October 29, 2014, www.theguardian.com/business/2014/oct/29/fed-quietly-ends-stimulus-hard-work.

  62. Pedro Nicolaci da Costa, “Janet Yellen Says Fed Can’t Ignore World Economy,” Real Time Economics (blog), Wall Street Journal, November 13, 2014, http://blogs.wsj.com/economics/2014/11/13/yellen-says-fed-cant-ignore-world-economy/.

  63. “Lew Warns of European ‘Lost Decade,’” Financial Times, November 12, 2014, https://next.ft.com/content/23d79946-6a89-11e4-a038-00144feabdc0.

  64. “Dovish Draghi Boosts Hopes of ECB Stimulus,” Financial Times, November 21, 2014, https://next.ft.com/content/e2bcc510-7160-11e4-818e-00144feabdc0.

  65. Mario Draghi, “Monetary Policy in the Euro Area” (keynote speech).

  66. Mario Draghi, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, December 4, 2014, www.ecb.europa.eu/press/pressconf/2014/html/is141204.en.html.

  67. “Euro Touches a Nine-Year Low against US Dollar,” BBC News, January 5, 2015, www.bbc.com/news/business-30678218.

  68. Mario Draghi, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, January 22, 2015, www.ecb.europa.eu/press/pressconf/2015/html/is150122.en.html.

  69. “France’s Hollande Says Euro Zone Membership ‘Up to Greeks,’” Reuters, January 5, 2015, http://uk.reuters.com/article/us-france-hollande-greece-idUKKBN0KE0H820150105?mod=related&channelName=economyNews.

  70. Jochen Hung, “Germany Isn’t the Big Bad Boss of Europe,” Guardian (Manchester), February 5, 2015, www.theguardian.com/commentisfree/2015/feb/05/germany-not-big-bad-boss-europe-economies.

  71. Mario Draghi, “Introductory Statement to the Press Conference (with Q&A),” European Central Bank, January 22, 2015, www.ecb.europa.eu/press/pressconf/2015/html/is150122.en.html.

  72. Kate Gibson, “Markets Primed for ECB Debt-Buying Splurge,” CNBC, January 21, 2015, www.cnbc.com/2015/01/21/markets-primed-for-ecb-debt-buying-splurge.html.

  73. P.W., “The Launch of Euro-Style QE,” Free Exchange (blog), Economist, January 22, 2015, www.economist.com/blogs/freeexchange/2015/01/ecb-makes-its-mind-up.

  74. Liz Alderman, “New Leader in Greece Now Faces Creditors,” New York Times, January 26, 2015, www.nytimes.com/2015/01/27/business/international/after-vote-in-greece-alexis-tsipras-seeks-to-address-debt.html.

  75. “Berlin Insists It Expects Greece to Remain in Eurozone,” Financial Times, January 4, 2015, www.ft.com/intl/cms/s/0/7e0064d4-941e-11e4-82c7-00144feabdc0.html#axzz3yuL5Bhl9.

  76. “Asset Purchase Programmes,” European Central Bank, www.ecb.europa.eu/mopo/implement/omt/html/index.en.html.

  77. Brian Blackstone and Ian Talley, “ECB’s Draghi Rejects Talk of Greek Euro Exit,” Wall Street Journal, April 18, 2015, www.wsj.com/articles/ecbs-draghi-rejects-talk-of-greek-exit-from-euro-1429381951.

  78. Ibid.

  79. Ian Talley and Gabriele Steinhauser, “IMF Official Sees Greek Bailout Needing Several More Weeks of Talks,” Wall Street Journal, April 17, 2015, http://linkis.com/www.wsj.com/articles/tR2jY?next=1.

  80. Blackstone and Talley, “ECB’s Draghi Rejects Talk of Greek Euro Exit.”

  81. Yanis Varoufakis, And the Weak Suffer What They Must? Europe’s Crisis and America’s Economic Future (New York: Nation Books, 2016).

  82. “Draghi Says ‘Get Used to’ Bond Volatility,” Financial Times, June 3, 2015, www.ft.com/content/6735194c-09c2-11e5-b6bd-00144feabdc0; John Ficenec, “German Bond Yields Jump After Mario Draghi’s ‘Volatile’ Comments,” Telegraph (London), June 3, 2015, www.telegraph.co.uk/finance/economics/11649376/German-bond-yields-jump-after-Mario-Draghis-volatile-comments.html.

  83. Virginia Harrison and Chris Liakos, “Greece Defaults on $1.7 Billion IMF Payment,” CNN Money, June 30, 2015, http://money.cnn.com/2015/06/30/news/economy/greece-imf-default/.

  84. Ivo Oliveira and Paul Dallison, “Varoufakis: Schäuble Will Bring Troika to Paris,” Politico, August 3, 2015, updated August 4, 2015, www.politico.eu/article/varoufakis-schauble-troika-paris-madrid-athens-eurogroup-grexit/.

  85. Ibid.

  86. Anmar Frangoul, “Slap in the Face for Rajoy? Spain Goes to the Polls,” CNBC, December 18, 2015, www.cnbc.com/2015/12/18/spain-goes-to-polls-in-general-election.html.

  87. Mike Bird, “Italy’s Youth Unemployment Just Hit a New Record High—Here’s What’s Going Wrong,” Business Insider, July 31, 2015, www.businessinsider.com/italys-youth-unemployment-just-hit-a-new-record-high-heres-whats-going-wrong-2015-7.

  88. Ansuya Harjani, “Trichet to Fed: Ignore the IMF, World Bank,” CNBC, September 15, 2015, www.cnbc.com/2015/09/15/trichet-to-fed-ignore-the-imf-world-bank.html.

  89. “Flash Estimate for the Third Quarter of 2015” (news release), Eurostat NewsRelease EuroIndicators 199/2015, November 13, 2015, http://ec.europa.eu/eurostat/documents/2995521/7075215/2-13112015-BP-EN.pdf/b1b2ad4f-32ef-4737-abbe-5dc7b91dd1bb.

  90. Matthew Holehouse, “George Osborne Tells Merkel: Give Us EU Reform If You Want to Save the Euro,” Telegraph (London), November 3, 2015, www.telegraph.co.uk/news/politics/georgeosborne/11973239/George-Osborne-tells-Merkel-Give-us-EU-reform-if-you-want-to-save-the-euro.html.

  91. George Osborne, speech to the BDI conference in Berlin, November 3, 2015, www.gov.uk/government/speeches/let-britain-and-germany-work-together-as-partners-for-a-european-union-that-works-better-for-all-of-us-says-chancellor.

  92. Steve Swinford, “Angela Merkel Urges Britain to ‘Stay in’ the European Union,” Telegraph (London), November 3, 2015, www.telegraph.co.uk/news/newstopics/eureferendum/11972490/Angela-Merkel-urg
es-Britain-to-stay-in-the-European-Union.html.

  93. Lotte Jeffs, “The Crush: Mark Carney,” Evening Standard (London), July 3, 2014, www.standard.co.uk/lifestyle/esmagazine/the-crush-mark-carney-9581450.html.

  94. Graeme Wearden, “Bank of England: Governor Carney Has ‘No Regrets’ After Leaving Rates Unchanged Again—Live,” Guardian (Manchester), November 5, 2015, www.theguardian.com/business/live/2015/nov/05/bank-of-england-super-thursday-volkswagen-vw-sales-slump-business-live.

  95. Mark Carney, introduction to the Bank of England Open Forum, London, November 11, 2015, www.bis.org/review/r151116c.htm.

  96. “Monetary Policy Decisions” (press release), European Central Bank, December 3, 2015, www.ecb.europa.eu/press/pr/date/2015/html/pr151203.en.html.

  97. Benoît Cœuré, “The Transmission of the ECB’s Monetary Policy in Standard and Non-Standard Times” (speech, “Monetary Policy in Non-Standard Times” workshop, European Central Bank, Frankfurt am Main, September 11, 2017), www.ecb.europa.eu/press/key/date/2017/html/ecb.sp170911.en.html.

  98. Rachel Evans, “Euro Climbs as ECB’s Mersch Fails to Damp Best Month Since April,” Bloomberg, December 28, 2015, www.bloomberg.com/news/articles/2015-12-28/euro-climbs-as-ecb-s-mersch-fails-to-damp-best-month-since-april.

  99. James Ramage, “Dollar Rises Against Euro,” Wall Street Journal, December 23, 2015, www.wsj.com/articles/dollar-rises-against-euro-1450893130.

  100. Claudio Borio, Enisse Kharroubi, Christian Upper, and Fabrizio Zampolli, “Labour Reallocation and Productivity Dynamics: Financial Causes, Real Consequences” (BIS Working Papers No. 534, Bank for International Settlements, Monetary and Economic Department, Basel, Switzerland, December 2015), www.bis.org/publ/work534.pdf.

  101. Richard Dobbs, Susan Lund, Jonathan Woetzel, and Mina Mutafchieva, “Debt and (Not Much) Deleveraging” (report, McKinsey Global Institute, February 2015), www.mckinsey.com/global-themes/employment-and-growth/debt-and-not-much-deleveraging.

  102. “Subdued Demand, Diminished Prospects,” World Economic Outlook Update, January 19, 2016, www.imf.org/external/pubs/ft/weo/2016/update/01/pdf/0116.pdf.