July 2, 2022

NyseNewsAnalyst

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According to the ECB, “ratio dispersals are at the heart of its mandate.” Descriptions!

“European Central Bank President Christine Lagarde on Monday confirmed that dealing with the spread of sovereign debt ratios is at the heart of the company’s mandate. This policy is a “prerequisite for good exchange,” he declared during the European Parliament’s pre-trial hearing.

Let’s start again quietly and without panic, in less than 5 minutes at your dinners in the city you can show off with your learned explanations about the rate spread!

“Spread” is an English term (always when you want to look professional and modern) that is commonly used to refer to the difference in finances, i.e. the difference between two indices or two ratios.

To make it even simpler “area” = difference.

But admit it’s too stubborn to say spread, whereas to say “gap” is too “attic”.

So since we are among the people in the attic, let’s keep it simple.

The ECB therefore considers it a fact that in its peculiarities, in its liabilities (which we are talking about) the fact that the spread of debt rates between different countries of the Eurozone is not very significant.

If Germany borrows 1, Italy ranks 5th, the gap is 5-1 = 4! (You will also find that you have the right knowledge in the high-flying mathematics of the big fund).

This struggle against fragmentation was “at the heart of the decree” of the ECB, which struck the French. The currency firm had to act urgently last week to show its commitment to any slump in rates in the euro zone and any panic over Italian debt.

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“No one should doubt our determination and commitment,” says Christine Lagarde. Because if it does not react, he argued, “the ECB did not do the work entrusted to us by the contract guaranteeing price stability” defined as 2% by inflation. The ECB announced last week that it was developing a new “anti-fragmentation tool” to control popular “spreads”.

These stories of interest rate differences have nothing to do with price stability and everything that states debt, but the ECB should justify its actions, but this is almost a “footage mouth” because to avoid rate differences, ECB must borrow from threatened countries to accurately reduce rates. And the ECB will increase the money supply by buying government debt, so inflation will increase!

The more the ECB avoids fragmentation, the more money will be forced to print, and that will increase inflation.

There you go, you know almost everything about “spreads”!

Charles Sunnat

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Proof AFP via BFM here