Who is propping up the euro

That was pretty impressive, driven by baby boomers and the gigantic wave of consumption that enveloped them. Never before in history had parents worried so much about the outfits that New Baby would wear, and it only got crazier from there.

Fundamentally though, the late s were far more earth-shaking. Not in the consumerist sense; those austere horse-travelers managed to survive somehow without the likes of either Apple or Lululemon, for example, but consider the free-market achievements of that period.

The United States came into existence, a profound new experiment in governance and free ish markets. It was a reference to the ability of a market economy to provide benefits far beyond those that accrue to the creator.

That is, an inventor of something that becomes wildly successful enriches not only the inventor, but society as a whole. Plus, it is an indirect reference to the ability of markets to efficiently allocate capital. We tend to forget that wonder of capital markets, particularly as the world drifts into one defined more and more by government intervention.

Since the financial meltdown, governments have gone kind of berserk in attempting to keep the financial world afloat, causing markets to gyrate in increasing spirals through wild-eyed policy guidance as the dollars at stake become stupefyingly large. The strategy of which I speak began in Japan over the past decade.

After years of trying to kick start the Japanese economy in various ways, including dropping interest rates to zero, the central bank began buying up treasuries as a means of supporting debt markets. Since then, Europe has started a similar program. And yes, you heard that right — in those jurisdictions, if stock prices fall too much, the market is prevented from self-correcting, and governments are, in effect, breaking the fingers of the original Invisible Hand.

This rebound will be supported by an improvement of public health - thanks to the expected rollout of vaccines during the first half of the year, another layer of monetary policy support from the ECB going into , and fiscal stimulus. In the short-term, the difficulties in approving the EU recovery fund have exposed the shortcomings of the existing institutional framework.

We have seen a bit of bid pop up in the euro but nothing major. Search the FT Search. World Show more World. US Show more US.

Companies Show more Companies. Markets Show more Markets. Opinion Show more Opinion. Draghi has credited this policy with averting deflation in the euro zone and helping create 11 million jobs in the bloc. Related Coverage. The ECB made no new policy moves on Thursday, having decided in September to restart bond purchases at a pace of 20 billion euros per month while also cutting its deposit rate to Despite weak growth across the euro zone, Draghi insisted the benefits of loose money policy far outweighed the risks and rejected the suggestion that the public spat had tainted his legacy.