ALSTRY finally correct about Sovereign Debt Crisis
ECB must buy sovereign debt to end crisis: expert - 1 hour ago
WASHINGTON (MarketWatch) -- The "only way" out of the current fiscal crisis in Europe is for the European Central Bank to buy sovereign debt By Greg Robb
WASHINGTON (MarketWatch) -- The "only way" out of the current fiscal crisis in Europe is for the European Central Bank to buy sovereign debt in the secondary market, said John Makin, an economist at the American Enterprise Institute. Bonds of countries on the periphery of the euro-zone have fallen out of favor as investors are concerned the debt may have to be restructured given the fiscal deficits in the countries. The program would mirror the Federal Reserve's recent purchase of over a trillion dollars of mortgage-backed securities. This so-called quantitative easing would likely push the euro lower, Makin said in a conference call with reporters. Makin gave no estimate for the amount of bonds the ECB should purchase. "I think the longer they delay, the more they will have to buy," Makin said. On Thursday, ECB President Jean-Claude Trichet said the central bank did not talk about buying bank bonds at its monthly meeting.
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- Wall Street Journal