Friday, 7 September 2012

A whopper: Lagarde agrees with Draghi

Following Draghi's statement yesterday, the IMF's press release "Statement by IMF Managing Director Christine Lagarde on ECB Decisions" reads,

Managing Director Christine Lagarde of the International Monetary Fund (IMF) made the following statement regarding today’s decisions of the European Central Bank (ECB):
“We strongly welcome the ECB’s new framework, the Outright Monetary Transactions (OMT), for intervention in sovereign bond markets of countries accepting EFSF and ESM support for their macroeconomic adjustment programs and adhering to the associated structural and fiscal reform efforts. The IMF stands ready to cooperate within our frameworks.
“Decisive implementation of the new intervention program will help repair monetary transmission, and support countries’ efforts to secure finance at a reasonable cost while they undertake sustained macroeconomic adjustment. We see the ECB’s action as an important step toward strengthening stability and growth in the Euro Area.”
 
ECB, IMF, OECD all love the OMT. And they all ignore the economic calculation problem, issues with central planning, malinvestment, moral hazard and all else logical. They are all politicians, not economists, that should be clear to everyone by now. Bureaucracy is on the top of their list, not democracy.

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