According to HuffPo’s Bonnie Kavoussi: “In the wake of the financial crisis, the Federal Reserve took drastic measures to shore up the U.S. financial system. Now as Europe enters its worst economic debacle since World War II, economists and politicians are calling on the European Central Bank to pull off a similar rescue.
‘So far, it has not. The reasons for the Frankfurt-based central bank's reluctance can be traced back to Germany's troubled past, which includes both world wars and the enduring legacy of Adolf Hitler.
“History is proving an inescapable weight on the continent's ability to save itself from economic peril. "German memory of the hyperinflation in the early 1920s and then the absolute destruction of the economy and money by 1945 -- those are things that people haven't forgotten," said University of Pennsylvania political science professor Ellen Kennedy, author of "The Bundesbank: Germany's Central Bank in the International Monetary System." "Those are well within living memory."
“…Now, economists say that the ECB could halt the sovereign debt crisis in Europe by purchasing large amounts of government bonds, as the Fed did with mortgage-backed securities. The belief is that such a move would lower borrowing costs for eurozone countries and stabilize the European banks who are holding that debt, staving off economic disaster. But while the ECB freely lends to banks, it refuses to buy much government debt….”
Yes readers, some things are more important than inflation. Find out what at http://www.huffingtonpost.com/2012/01/03/european-central-bank-german-history-_n_1173481.html?ref=business
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