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Tuesday, 29 October 2013


βασίλης βιλιάρδος

a modern economist, graduate of the Economics University of Athens, with postgraduate studies at the University of Hamburg - where he was active professionally for several years, with business owners.
Εxcerpt from an article by Mr. Vasilis viliardos

Τhe printing of new money made ​​from two " printers " - the large central (ECB , Fed , etc. ) as well as of many, small printers ( commercial banks ) .

( a) The central bank : The " print " here is synonymous with the purchase of government bonds , as well as with 'loans facility " to commercial banks - against guarantees from them (bonds , assets , loans , etc.).

Thereby creating new money out of thin air , so we are talking about increasing the balance sheet of the central bank - money though not "produce" necessary inflation, if not disposed of by commercial banks to the real economy. If course used for speculative purposes , superimposed by commercial banks in the stock , then produce inflation there - because of increased but essentially fictitious demand.

The ECB balance sheet is estimated at $ 3.74 trillion ( 2.77 trillion €), while the FED at $ 3.72 trillion - which means that, from this point of view the two areas , the U.S. and the Eurozone are now almost equals ( chart).

( b ) Commercial banks: The print here is connected with the provision of loans to businesses and households. The total balance sheet of commercial banks in the euro area is estimated at 33 trillion € ( approximately $ 44 trillion ) - ie three times the GDP of the Eurozone. The corresponding U.S. has been reduced below the $ 17 trillion - roughly equal to the GDP of the superpower (although as many trillion $ are outside the U.S. ) .

In this case , the risks to the banking system in the eurozone are too large - leading to ever diminishing credit to the real economy by more States, even surplus (Germany, Netherlands , etc.).

This reduction results in balancing inflationary pressures, which would create increased money printing by the ECB - after the big printing works , but are small not work . In contrast , small printers " burn " money after trying to collect existing loans by lowering constantly new.

So in conclusion , the solution to the problem of indebtedness to " cut money " as it is called by many the 'print' is not as easy as it sounds - since no one can force small ' printers ' to ' chop money' .


Banks now in southern Europe is totally dependent on ECB loans - having already received two packages facility (LTRO 1 and 2), € 2 trillion €, at 1% interest . However, the money was not given to the real economy , but used mainly for the purchase of bonds, which were issued by the states to finance the huge deficits and debts. In particular the following:

(a ) The Spanish banks received from the ECB 300 billion €, of which € 225 billion, have not been returned yet.

( b ) The Italian banks took 255 billion €, of which € 233 billion are still outstanding . Unlike now with the Spanish , which have created provisions for doubtful debts of 59% , the predictions of Italian banks is just 44% - despite the fact that many people refer to a ticking time bomb, a " skeleton" better, who are hiding on their balance sheets .

( c ) The French banks have the ECB 87 billion €, the Greek 64 billion €, the German 10 billion €, the Irish € 35 billion and the Portuguese 45 billion €.

Further estimated that the need for new capital Eurozone banks because of the huge bad debts , are of the order of 720 billion € - which should take the ESM, so as not to burden the budgets of states and hence , public debts.