German Central Banker Said to Have Threatened Resignation
If you are not familiar with reports that German central bank chief Jens Weidmann has threatened to resign over the European Central Bank's bond-buying strategy I suggest you read the referenced articles.
You might want to read the articles anyway, and consider not the alleged resignation threat in isolation, but the bigger issues I think they signal is the importance and the 'what is the likelihood of Germany financially supporting other Eurozone countries going forward' question.
Also see an article that this morning that reports Mr. Weidmann now "is completely isolated in the European Central Bank in his opposition to buying government bonds".
When I think of the Eurozone I think of a pot of boiling oil sitting on a gas stove element. So far the boiling oil has almost all been retained within the confines of the pot, but the oil is getting ever hotter and more bubbly. If it is not contained, a bigger glob of it is going to land in the gas flame under the pot. If and when that happens, there will be an instant flash fire - and if that is not contained people around the pot are going to get harmed, will get harmed even worse if they don't get out of the house, and without very extensive fire department rescue measures, I think the house is going to burn down.
If you participate in today's financial markets, think hard about that analogy, and whether or not you agree with it.
Topical Reference: Weidmann resignation report turns up heat on ECB's Draghi, from The Financial Post, from Reuters, August 31, 2012 - reading time 2 minutes; and Draghi plan under threat amid EU split, from The Telegraph, Philip Aldrick, August 31, 2012 - reading time 3 minutes. Also see:
- Europe must act strongly to tackle crisis: OECD, from Reuters, Alister Bull, August 31, 2012 - reading time 2 minutes; and,
- German Central Bank Chief Jens Weidmann Is Now Completely Isolated, from Business Insider, from Reuters, September 4, 2012 - reading time 1 minute.