Submitted by Tyler Durden: Back in March we wrote "Mario Draghi Is Becoming Germany's Most Hated Man [17]"
for one reason: a few months after the former Goldman appartchik was
sworn in to replace Trichet with promises he would not "print" Draghi
did just that in a covert way via $1.3 trillion in LTROs, that
immediately hit the economy and sent inflation across Europe soaring. We
said that: "Slowly but surely the realization is dawning on Germany
that while it was sleeping, perfectly confused by lies spoken in a
soothing Italian accent that the ECB will not print, not only did Draghi
reflate the ECB's balance sheet by an unprecedented amount in a very
short time, in the process not only sending Brent in Euros to all time
highs (wink, wink, inflation, as today's European CPI confirmed coming
in at 2.7% or higher than estimated) but also putting the BUBA in
jeopardy with nearly half a trillion in Eurosystem"receivables" which it
will most likely never collect."
It now appears that the simmering hatred between the two is about to
upshift to a whole new level, with the threat of open escalation finally
arriving. Because if Sueddeutsche Zeitung is correct, via Reuters, in
precisely 12 hours, Draghi will proceed with a plan that has neither
Germany's nor Buba's blessing, in the process effectively isolating the
only remaining solvent country in Europe, and its de facto paymaster,
and forcing Germany to take a long, hard look at the exit sign (which,
however, as reported earlier, with each passing day that drags Germany's
economy is becoming less of an unthinkable outcome). To wit: "Draghi is
planning concerted action using both the ECB and the future euro
European Stability Mechanism (ESM) to purchase sovereign debt from Spain
or Italy in order to help push down borrowing rates for those two
countries." There is one problem: "highly doubtful that the
German government would agree to Draghi's approach. The Bundesbank also
is likely to reject the idea, the paper added."