Hedge fund manager Bill Fleckenstein states in a column on MSN Money that given the stage at which the European Monetary Union has arrived in the crisis of the common currency, the big problem right now is that the European Central Bank is “unwilling to use the printing press with reckless abandon.”The fact that the ECB currently resists this, according to Fleckenstein, relegates the central bank to loser status among other central banks – the “winners of the monetary world” in the United States, Japan, Switzerland, and the U.K.
I don’t mean to imply that using the printing press is an intelligent choice, nor is it a solution. In fact, printing money has caused the economic woes of America and the rest of the world. However, as I have said often, we are not going to rid ourselves of this menace until it is carried to its logical conclusion.
Thus, we can only hope that the crisis in Europe will rise to the point where the Germans choose the printing press as the least-bad option. To my mind, they will never agree to “eurobonds,” jointly issued bonds proposed as a way to lower borrowing costs for struggling nations. But I do think that, at some point, the ECB will choose to print money, despite the objections from Germany, as opposed to seeing the euro collapse.