Summary
Liquidity in the ECC banking system is still an issue. Although more money has been injected into the system (M1 to M3 indicators show more money available than prior months) loans to European business and private individuals will not increase at rates the increased money supply would suggest.
Analysis
The world is dependent on US monetary and fiscal policy. Today's administration has used debt and currency creation to enable liquidity and provide funds to the banking system. The US tax policy is in question because of massive spending by congress. There continues to be a high degree of uncertainty relative to US policy on economic matters. The uncertainty has raised risk profiles and slowed an otherwise certain economic rebound. Unless there is less government intervention in the free market of the US, Europe will see continued slow economic growth.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
