This is the most interesting article I saw during the week...
The TLDR.... a few selected quotes from the article
* "My structural argument is that the power to control the creation of money has moved from central banks to governments. By issuing state guarantees on bank credit during the Covid crisis, governments have effectively taken over the levers to control the creation of money."
* "Just to give you some statistics on bank loans to corporates within the European Union since February 2020: Out of all the new loans in Germany, 40% are guaranteed by the government. In France, it’s 70% of all new loans, and in Italy it’s over 100%, because they migrate old maturing credit to new, government-guaranteed schemes. Just recently, Germany has come up with a huge new guarantee scheme to cover the effects of the energy crisis. This is the new normal. For the government, credit guarantees are like the magic money tree: the closest thing to free money. They don’t have to issue more government debt, they don’t need to raise taxes, they just issue credit guarantees to the commercial banks."
* "It’s easy for them in the way that credit guarantees are only a contingent liability on the balance sheet of the state."
What I think it means is....if it pans out the way the author suggests it will.... it is back door money printing. Another elaborate way to kick the can down the road.... which, of course, the poor people will be paying for one way or another.
