George Soros, the famous American billionaire, made a speech within the scope of the latest economic summit in Davos. During his speech, the financial tycoon warned the representatives of the European Central Bank against printing money any father since any extra emission of money may well result in major consequences for the Eurozone and other parts of the globe, Market Leader reports.
In particular, the world-famous financier and investor told the participants of the Davos forum that the ECB’s aggressive policy aimed at preventing deflation may result in escalating the financial discrepancy existing between European nations.According to Masterforex-V Academy, the billionaire is right since excessive monetary easing lead to lower household income while making landlords richer. With that said, the ECB’s intension to poor 1,1 trillion euros into the European economy looks controversial at best.
Indeed, the policy may consolidate the inequality between the rich and the poor. Needless to say, that such financial challenges may have serious political consequences as well. The ECB is planning to purchase assets to the amount of 60 billion euros a months until the end of September 2016.
It should be reminded that on January 22nd, the European Central Banks, which used to be conservative, decided to make a historical decision by announcing quantitative easing while the Fed already tapered its easing to the end. With that said, the ECB is now going to print 1,100 billion euros until late September 2016. Experts say that the ECB was forced to do this by the threat of deflation in the Eurozone.
In the meantime, Mario Draghi, President of the European Central Bank, announced that the asset purchases aestivated at 60 billion euros a month are going to start in March 2015. This is another reason to believe that the Euro will remain at its record lows against the U.S. Dollar for a long time. Since there is no way the common currency is going to strengthen a lot as the ECB prints money while the Fed doesn’t.
