Monday, December 12, 2011

With Central Bankers Like These...

Greek Monetary Situation
The Greek money supply has dropped 13% from December of last year to last October.  It begs the question: what has the European Central Bank done to help this situation?

On April 13th 2011 they raised key interest rates 25 basis points, and on July 13th they did it again.  In November, and last week they lowered them 25 basis points so they are back to the same level that they started out with at this time last year, 1%.  In the meantime, Greece has lost 13% of its monetary base.  Greece's economy has been enormously harmed by the European Central Bank who took measures that were perhaps reasonable for the Eurozone as a whole, but terrible for Greece.

These statistics are all before news organisations began reporting bank runs in Greece last month.

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