Courtesy of Joe Weisenthal of The Business Insider
Quickly!
If Europe is going to survive, Germans need to understand that central banks can radically expand their balance sheets and print money without it causing crazy inflation.
Specifically, what needs to happen in Europe is for the ECB to buy tons and tons of Italian (and Greek and Spanish debt, etc.), but the Germans — fearing what happened during Weimar Germany, when money printing led to massive inflation — don’t want to see it happen.
This chart shows how when the Fed embarked on quantitative easing (massive bond buying) in 2008 during the crisis, it didn’t cause inflation to boom.
Specifically, this chart compares the size of the Fed’s balance sheet (all the assets it bought) against the monthly change in the CPI (inflation)
This chart is from the St. Louis Federal Reserve, so any newspaper can publish it totally free of charge. Go! Do it!
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