Re: Stimulus for Eurozone, but it may be too little or too late
Your analysis of the likely effect of the European Central Bank’s proposed massive quantitative easing program is full of economic fallacies that, unfortunately, masquerade as conventional wisdom. One often stated fallacy is your statement that “…the initial market reaction was favorable.” The nature of the ECB intervention is to buy assets above their current market prices with money that it will create out of thin air. Of course market prices will rise! But one can hardly characterize such a market response as favorable.