This just sums it all up so well:
“The system is just not working,” agrees Simon Samuels, banks analyst at Barclays Capital in London. “We’re approaching the third year of liquidity support and still the market cannot survive unaided.”
Three years and hundreds of billions of Euros later, this is where we find ourselves. Stuck in a Vietnam-like quagmire of monetary policy.
I think there’s something to be said here about what this situation tells us about where we find ourselves now in the inflation/deflation debate. I’m fully convinced that we’re confronting secular – not cyclical – deflation. As such, the remedies you’d prescribe don’t seem to be working the way folks think they should. That’s a post for another time; possibly later this week as I’ve been collecting/categorizing a bunch of things I’ve seen over the past week or two on that topic.
But in the meantime, we’d better get ready to brace for impact…