Joke of the millenium

The Telegraph reports:

Klaus Regling, the chief of the European Financial Stability Facility, has arrived in Beijing a day after Eurozone leaders struck a last-minute deal to contain the bloc’s debt crisis.

European leaders are now under pressure to finalise the details of their plan to slash Greece’s debt burden and strengthen their rescue fund.

Mr Regling, who is due to meet officials from China’s central bank and finance ministry, said he wanted to hear how the European Financial Stability Facility (EFSF) could structure investments to attract funds.

He said: “The foreign exchange reserves of China go up every month, therefore there is a need for investment.”

“That’s also my experience talking to the Chinese authorities that they are interested in finding attractive, solid, safe investment opportunities. And I am happy that EFSF bonds have been considered to be in that category in the past, and therefore I am optimistic that we will have also a longer-term relationship because we will continue to provide safe, attractive investment opportunities,” he added.

Nick Rowe has a quip on related news:

But there’s really not much one can say about this idea reported in the Telegraph, other than: this is really stupid. The whole Eurozone problem is that each Eurozone country was issuing bonds in what was effectively a foreign currency, and so it lacked an effective lender of last resort. Now, if the Telegraph is correct, the Eurozone as a whole is planning to repeat the mistake, and become just like Greece.

2 thoughts on “Joke of the millenium

  1. Pingback: The “China Bluff” « The Market Monetarist

  2. I hope the economics profession wakes up and learns that inflation is the not the worst thing in the world. The Euro fetish for controlling currency and stripping nations of the option of inflating out of overindebtedness and slow growth is a failure.

    Sometimes, you have to print more money. That like, not utopia.

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