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Mario Draghi has just announced that The European Central Bank or the ECB will be buying bonds. This is an unprecedented action by the ECB. Up to this point, members of the Euro Zone, primarily the Germans, have rejected the idea of bond buying programs. When a central bank like the ECB buys bonds, they do so with currency that is created out of thin air. This is what the US Central Bank, The Federal Reserve, does regularly. By creating more money, the monetary base or M-O money supply increases. This creates inflation as you now have more currency competing for the same amount of goods and services.

Here is a Link to the full article and Video.
 
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