This is the issue in europe and in the united states. The Money Supply is not increasing, the selling of the PIGS bonds and subsequent withdrawal of that money out of their respective money markets has resulted in a reduction in money supply. Europe has a common currency but individual money markets. This is why Dr Oliver is saying what he is.
1. Buy the PIGS bonds = lower interest rate and cost of their debt 2. Lower rates = re-capitalise monetary base to avoid the deflation
