Roubini To Europe: Start Printing Money Now, You Fools

Nouriel Roubini, also known as Dr. Doom, is apparently appalled by Jean-Claude Trichet's unwillingness to ease interest rates like crazy, echoing a popular mantra....

Bloomberg:
The European Central Bank should slash its benchmark interest rate to zero and expand government bond purchases to offset the recessionary effects of euro area austerity measures, New York University economist Nouriel Roubini said.

“That has to be the policy mix: tight fiscal, but much more easy money, looser monetary policy, more quantitative easing and also a weakening of the euro,” said Roubini, who predicted the financial crisis, in an interview in Rome today.

Trichet has still expressed extreme hesitancy to do what Bernanke did and start hoovering up everything in sight with looser money, and he's obviously concerned about taking flak from the Germans who have an allergy to cheap money.

That being said, it's not inevitable that this would weaken the euro further if Trichet did this.

After all, the primary concern right now about the euro is structural, that the eurozone doesn't make sense as a cohesive economic bloc. But an aggressive central bank that responded to the needs of the PIIGS would go some way in mollifying these concerns. If Trichet actually listened to Roubini, that could be, paradoxically, a euro positive.


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