The words themselves sound relatively innocuous. "The committee decided today to expand its holdings of securities." This is how the United States Federal Reserve announced on Wednesday that it was effectively starting the printing presses again and indulging in another $600 billion bout of what is coyly known as quantitative easing.
The European Central Bank is not following suit, deciding on Thursday that it would not be pumping further monetary stimulus into the euro economy. "The positive underlying momentum remains in place, in line with previous expectations," declared ECB President Jean-Claude Trichet. But the statement reeked more of hope than conviction.
As he was speaking, one euro-zone country, Ireland, was preparing to announce a drastic budget tightening that stood no chance of achieving its desired intention of calming the debt markets. "I am well aware that such measures will impact on the living standards of everybody," said Finance Minister Brian Lenihan as he explained that the €15 billion ($21.2 billion) of savings spread over four years that he announced only last month would now be accelerated so that €6 billion would be cut in the course of next year alone.
For more: Printing Presses Roll, - WSJ.com
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