ZEW: ECB is creating dangerous bubbles


The German think tank ZEW has outlined their growing concern of dangerous bubbles after the European Central Bank cut interest and deposit rates last week and hinted at quantitative easing.

"I've got a bad feeling about this...I am concerned by the danger that the ECB is producing new bubbles with its policy of cheap money," says Clemens Fuest. "We have all the ingredients of a bubble: The prices of real estate and stock markets continue to rise, and on the bond markets, yields are falling despite high risks."

To overcome the crisis, Fuest proposes action from governments in Europe, and not to leave structural reforms only up to the ECB.

Comments (4)
  • june1234
    , contributor
    Comments (4412) | Send Message
     
    The bigger the party the bigger the hangover
    10 Jun 2014, 06:48 AM Reply Like
  • Michael Clark
    , contributor
    Comments (11729) | Send Message
     
    Finally, some sanity. But, where will it lead? How do you stop a mania of stampeding bulls?

     

    Well, a crash will do it.
    10 Jun 2014, 07:06 AM Reply Like
  • bbro
    , contributor
    Comments (11227) | Send Message
     
    Anybody know the earnings yield of the Dax Index?
    10 Jun 2014, 08:41 AM Reply Like
  • Humble Value Miner
    , contributor
    Comments (481) | Send Message
     
    yes, German government must do some action, like exiting from the Euro, and stop the easy export dumping of the European China. Without of these 200B of extra export, "friends" in South Europe will finally be able to breath.
    10 Jun 2014, 03:18 PM Reply Like
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