The Money Is Just Sleeping… Let Us Wake It Up!

J.C. Juncker Sets Out to “Wake Up Liquidity”

In a recent article on the never-ending Greek Kabuki theater, we have come across parts of an interview EU budget commissioner Kristalina Georgieva has given to AFP, in which she explains J.C. Juncker’s cunning plans to “kick-start” the European economy by pumping €300 billion he doesn’t have into infrastructure projects and other assorted white elephants (we have previously discussed this Stalinesque plan, as well as what usually happens when even some of the “best stewards of EU funding” are “investing in in infrastructure” – see The EU’s Ghost Airports for the ghastly details). The interview contained the following gem:

“The Juncker plan is to wake up the liquidity sleeping in our financial system, to give courage to our money, to pump investment into the real economy,” Georgieva said.

The always open spigot, spitting out what is apparently valiumed money.

So the idea is that the enormous mountain of money created by the ECB and depicted below is somehow “just sleeping” and if only someone – ideally JC Juncker – manages to wake it up and give it the necessary courage to get wasted on projects no-one needs or wants, the economy will magically improve. Prosperity is practically around the corner! Riiiiight.

Europe’s huge pile of ECB confetti – just sleeping! The total is the red line, the annualized rate of change the blue line. Yes, that red line is going parabolic, via ECB, click to enlarge.

Apart from the problems with this plan we have already discussed, which consist mainly of the fact that governments cannot sensibly invest, because rational economic calculation is situated somewhere between totally alien and utterly impossible for them, there is another problem with this idea Juncker (and many others) apparently don’t understand.