Normally, I write about monetary policy only when the Fed has a meeting, but today, when the ECB may or may not cut rates one more time, I wanted to break the tradition because I found a study that gives us an idea how German politicians adjust fiscal policy in reaction to surprise rate decisions by the ECB.
I fear this is a sign that the asset inflation of the last twenty years or so has made people immune to the dangers of debt. Everything, more or less, has increased in value, so debt hasn't been a problem. We're in for a horrible awakening at some point.
The NGEU wasn't true Eurobonds (at least if by that we mean joined and several in liability). The latter would face serious obstacles in the German constitutional court.
I fear this is a sign that the asset inflation of the last twenty years or so has made people immune to the dangers of debt. Everything, more or less, has increased in value, so debt hasn't been a problem. We're in for a horrible awakening at some point.
The NGEU wasn't true Eurobonds (at least if by that we mean joined and several in liability). The latter would face serious obstacles in the German constitutional court.
Not blue bonds, please! That colour is reserved for water - make them yellow (for the stars) maybe?