Bad writing

A bad FT article on the monetary policy of the European Central Bank and the impact on savers in the Eurozone. One small problem: the article deliberately conflates impact on savers vs. interest cost savings for sovereigns.

As many commentators caught on, it was either a financially illiterate but bona fide article. Or, it is a mala fide article. Very bad conflation of issues and very misleading headline. Does no credit to FT at all.

Household savers may have even increased the amount they had saved over the years. But, the truth is that low interest rates have forced them to earn little on their savings. That is a fact.

A Bank of England discussion paper acknowledged this in the context of the UK. That was in 2012 or in 2013. Last year, OECD published as part of its mid-year economic outlook, that retirees’ incomes from their savings had dropped 40% from 2000. Check out page 13 of the link.

Nothing of what has been written in this FT article is consistent with this.

In the meantime, from the resourceful Twitter handle of Jeroen Blokland (many thanks to him for some wonderful charts) comes this table of what ECB had wrought. I am unimpressed. 40 bp. drop in the unemployment rate per year for all the money printing and negative rates? Inflation is lower. The EURUSD should be a lot weaker than this. But, that would be too hot for Germany.

ECB score card


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