To blame the Germans for their reluctance to stump up cash without any strings attached to it or to blame the European Central Bank for not announcing an unconditional purchase of sovereign debt of the countries in the line of fire is to betray the mindset that still prevails in the financial world that liquidity and easy money would solve all problems.
To be fair to them, they deliver what they think we would accept. In democracies, voters get the government they deserve. In modern-day, low-interest rate and high leverage-aided capitalism, investors and the public earn what they deserve. We have lowered our pain threshold in a world of instant gratification and hence policymakers are afraid to administer pain. The result is going to be lower growth, higher inflation, rising interest rate trend and more frequent boom-bust cycles.
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