David Stockman, who decades ago served as President Reagan's budget director, he of the "Trojan horse" gaffe, has written a wonderful brief essay on the latest move by the European Central Bank, which has jumped pumped one trillion new euros into circulation with a mammoth bond-buying program.
Trillion. With a "t".
This has all the looks of a desperation move to keep together a single-Eurozone system where the centrifugal forces are powerful.
Here is Stockman's take on it. Charlatan of the Apparatchiks.
Stockman introduces the graph above, which shows Europe's consumer price index since 1990.
There has been a good deal of talk about how the ECB's dramatic move is necessary to slay the monster of "deflation." But as you can see below, that isn't much of a dragon worth slaying. The lowest the CPI has gotten since 1990 was -0.5, a mark it hit only once, briefly, in 2009. Then it quickly rose back to 3% and has fallen since, following the course of world oil prices chiefly.
In recent weeks, the CPI has just barely gotten below 0. Stockman calls this a "hairline puncture of the zero inflation line" and rightly ridicules the notion that it is an economic calamity.
Go, David, go.