As an update on my earlier post I read somewhere recently (on the DT but I can't find the link now) that the ECB purchased VW bonds as part of its QE program. That is the ECB bought packaged up auto finance loans from VW.
IMHO this does not make the practice any better. It's still crony financing of industry favourites by the simple expedient of the ECB expanding its balance sheet, which it can do ad infinitum. It creates money ex nihilo and uses it to buy VW's bonds. This is money for nothing. It's very similar to Help to (Buy) Sell, in that it is an indirect subsidy to producers (land owners under HtB).
Of course all this brings into question the GDP figures for the Eurozone. If these are being boosted by QE, they must be meaningless since there has been no 'real' growth. Just lots more money pumped into the system.
It's an outrage and it's not going to end well. Is it?
Or, as usual, am I missing something?
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