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Eurozone Capital Flight Intensifies: Target2 Imbalances Widen Again
03-06-2017, 12:25 PM,
#1
Eurozone Capital Flight Intensifies: Target2 Imbalances Widen Again
Eurozone Capital Flight Intensifies: Target2 Imbalances Widen Again

<p><a href="https://mishtalk.com/2017/03/03/european-capital-flight-intensifies-target2-imbalances-widen-again/"><em>Via Michael Shedlock of MishTalk.com,</em></a></p>
<p>A quick perusal of <a href="http://sdw.ecb.europa.eu/reports.do?node=1000004859" target="_blank">Target2 Balances </a>for January shows <strong>capital flight from Italy and Spain to Germany intensified again.</strong></p>
<p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/05/20170306_target12.jpg"><img height="345" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/05/20170306_target12_0.jpg" width="600" /></a></p>
<p><strong>German target2 imbalances exceed levels hit in the Eurozone crises in 2012.</strong> Things improved considerably after ECB president Mario Draghi made his famous statement &ldquo;Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough&rdquo;.</p>
<p>The ECB claims this action is due to its bond-buying program. I strongly disagree.</p>
<p><em>For further discussion including my email exchange with the ECB regarding target2</em>, please see <a href="https://mishtalk.com/2017/02/24/fuse-is-lit/" target="_blank">Fuse is Lit! Target2 Imbalances Hit Crisis Levels: An Email Exchange With the ECB Over Target2</a>.</p>
<p>Also consider:</p>
<ol>
<li><a href="https://mishtalk.com/2016/09/09/germanys-finance-minister-blames-ecb/" target="_blank">Germany&rsquo;s Finance Minister Blames ECB For German Trade Surplus; Why the Eurozone Will Destruct</a></li>
<li><a href="https://mishtalk.com/2016/09/13/michael-pettis-calls-surplus-trade-statements-by-german-finance-minister-utter-lunacy/" target="_blank">Michael Pettis Calls Surplus Trade Statements by German Finance Minister &ldquo;Utter&nbsp;Lunacy&rdquo;</a></li>
</ol>
<p><strong>Finally, note that Italy is on ECB life support</strong>. Should Draghi halt QE asset purchases, demand for Italian bonds will&nbsp;plunge. For discussion, please see&nbsp;<a href="https://mishtalk.com/2017/03/02/draghis-dilemma-eurozone-inflation-hits-2-with-italy-on-bond-life-support/" target="_blank">Draghi&rsquo;s Dilemma: Eurozone Inflation Hits 2% with Italy on Bond Life&nbsp;Support</a>.</p>


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