The independent London newspaper

My tip: go to the bank, clear out your account and buy gold and silver

22 March, 2019

• IN my letter (Enriching the rich, January 4) I made a prediction that Mario Draghi would have to recommence money creation after his announcement in December last year that he had brought an end to QE (quantitative easing).

I felt the only way to give some validity to my view was to make a statement that could be tested by events: “Super Mario’s response will be to restart the presses”.

So it is that, after barely two months, Mario Draghi has reintroduced QE just as I said he would. To spare his blushes it is called TLTRO3 but there is no getting away from what it is.

It gets worse because the target for the money creation are banks in Italy and Spain. The European Central Bank (ECB) is only too well aware of the weakness of banks including, speak it softly, Deutsche Bank, which may well turn out to be the worst of all. A currency crisis and recession: win double.

The truth is the euro has never been and never will become a currency. It is a currency union and the number one rule of membership is you can make your citizens suffer deprivation beyond tolerance but never relieve their misery by leaving.

QE can only work once and then only over a short time frame and that expired long ago. How is it possible for Italy to be in recession when the ECB began QE on July 26, 2012, created 2.6 trillion euros and reduced overnight rates below zero per cent? This defies the laws of physics. The best Italy can hope for is that matters become no worse, yet without prospect of improvement.

In a speech given on October 26, 2011, Chancellor Angela Merkel stated: “If the euro fails, Europe fails. None of us can foresee what the consequence would be if we were to fail.” Well, it has failed and the only way to save Europe – the EU is beyond saving – is return to national currencies. Note to Keir Starmer: you only ever needed one test – follow the money.

Here’s a suggestion given freely. Take your contactless card and cut it up, take your debit card and cut it up, go to the bank, write a cheque, clear out your account in cash, spend the cash on gold and silver. When no one is looking dig a hole and bury it. Don’t forget where. Keep a little back for fags and lottery.

If people reject digital money the game is up and Mario will find himself up the creek in a barbed wire canoe. Only then will the ECB have to face up to the responsibility for what it has done.

Mildmay Grove North, N1


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