As Ambrose points out:
The three main gauges – M1, M2, and M3 – have each begun to decline in absolute terms after slowing sharply over the Autumn.
The broad M3 measure tracked closely by the European Central Bank as an early warning indicator shrank last month by €59bn to €9.78 trillion, a sign that Europe’s long-feared credit squeeze is underway as banks retrench to meet tougher capital requirements.
The ECB is allowing to happen what the Fed allowed to happen in the US in 1930-32.
This is fixable though. What we need to do is get 100 copies of this book.
A Monetary History of the United States, 1867-1960
Milton Friedman & Anna Jacobson Schwartz
We then collect the 100 top Euro- politicians/ECB bankers/German deflationists etc and we sit them down with said book. Under armed guard. With a gallows or two in the corner. And we insist that they read and understand the book. At the end of the first day we start to ask questions.
“So, who still believes that austerity is the way to solve a liquidity crisis?”
The first hand or two that goes up, we hang them then instruct the others to return to study of the book.
Repeat and rinse until finally someone stands up and agrees that actually, the central bank printing money is the way that you deal with a falling money supply and a liquidity crisis.
We might have to keep going until we get a majority of our 100 to agree: we might get down to three sensible people and 97 corpses, you never know.
But I am finding it very difficult indeed to think of any other way that we’re going to get this very basic point across.
We are not, have not been for months in fact, in a political crisis and we’re not even in a debt crisis any more. This is a monetary crisis, one that can be solved, simply and quickly, by monetary means. But only if we actually go and use those monetary means at our disposal. And yes, bastard stupid ignorant politicians who stand in the way of this solution, gallows are too kind for them.