From European Central Bank (ECB) Executive Board member Yves Mersch, in a speech in Frankfurt:
I’m not so sure it [Japanese Central Bank purchases of assets] has worked, considering that this morning we saw that Japan has officially slid into recession again.
Two things about this statement should give anyone with a grasp of rational economics pause. First, Mr. Mersch is not sure that JCB asset purchases have worked. How can anyone not be sure? The Japanese have gone all in on such purchases, recently announcing yet another increase, and the economy just entered its umpteenth recession. The policy has been a complete failure (see “The Economics of Debt, Deterioration, Deflation, Depression, and Disorder,” 11/17/14, SLL Blog). The other disconcerting note: in the same speech, Mr. Mersch pondered the possibility of an escalation in ECB purchases of all manner of assets.
Theoretically the ECB could purchase other assets such as gold, shares, ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation.
http://www.zerohedge.com/news/2014-11-17/ecb-says-may-buy-gold-stocks-next
If at first you don’t succeed, up the ante and fail, fail again, but never admit that it was a bad idea to begin with.
