German bond yields hit record low after ECB rate cut falls short

The European Central Bank cut interest rates a quarter point to a record low of 0.5pc and threatened to punish banks for hoarding funds, but was faulted for doing too little to pull Europe out of deep recession.

Yields on 10-year German Bunds fell to an all-time low of 1.16pc, signalling the risk of a deflationary crisis and a slide towards outright depression.

KlingonOffTheStarboardBow: "European President Herman Van Rompuy said leaders must take immediate steps to boost growth and create jobs." Idiot - usually "leaders" only destroy jobs with high taxes, massive borrowing and vast govt spending and unbelievable bureaucratic interference. Van Rompo is an utter disgrace. His millions cost produces precisely NOTHING for the ordinary people of the EU, just the occasional pontification from someone on 300,000€ pa plus vast expenses and sod all tax living in a palace that cost three hundred million euros and counting. On the contrary, his blind zealotry about creating a United States of Europe is destroying people's lives in the millions. Pity that more people did not vote UKIP to force us out of this nightmare.

brian_d:  If I had to sack someone I would certainly sack the invaluable UK contribution, Ms. Ashton, first.

John Mark: "…a risk of a deflationary crisis and a slide towards outright depression". I begin to wonder whether Ambrose would ever write "…a risk of a hyperinflationary crisis and a slide towards outright depression"? Sure, a hyperinflationary crisis is not with us at the present time, so he writes, understandably, about a deflationary crisis. However, his enthusiasm for monetary debasement in order to avoid a deflationary depression, forces me to think that he would prefer a hyperinflationary depression.  Of course, a depression of whichever type is terrible and full of human suffering. And Ambrose is a kind man. He would rather postpone austerity by QE because, he thinks, there is the possibility that hyperinflationary depression will not occur. But this is a gamble, which the German government is not prepared to risk, because a hyperinflationary depression is far, far worse than a deflationary one. Kindness can end up as cruelty or, at least, as being inhumane. To postpone "a slide towards outright (deflationary) depression" by QE after QE (such as Abenomics which Ambrose approves of so much) is, in fact, being cruel under the disguise of being kind.  If a country has overspent itself, then there is no escape from austerity to correct things. Doing QE is a short-term fix for a longer-term (hyperinflationary) depression in the future.

Greenbacker84: QE vs Austerity are both false banker propositions. Both mean giving money to banks, ultimately. The real solution is issuing our currency ourselves, abolishing the central bank and income tax in the process. We have no need to 'borrow' from banks whatsoever. They just launder our promissory contracts. australia4mpe

John Mark: Nothing propositional about governments allowing money-printing or QE to occur, and nothing false about it since QE is a reality. Nothing propositional about the austerity that Greece is going through nor the austerity that Germany and Austria went through between the world wars. Nothing false about it since some people starved through lack of food. I agree with the abolition of central banks but I think that that is a proposition too far for governments of today. If central banks will not be abolished by governments, then they will continue to print their own currency and make it illegal, possibly, for other currencies to really get a foot in the door on a significant scale. I'm not holding my breath for Bitcoin's survival. I like the mechanism that GoldMoney has set up. You can pay people, companies etc with gold and silver. I have many grams of silver with and, when the currency I have to use becomes worthless, I shall encourage the local farmer to open a GoldMoney account so that I can transfer silver grams to him in exchange for food. In  1925 in Weimar Germany, the farmers refused to accept the hyperinflated mark for food from the people, who were hungry or starved. The farmers just stockpiled grain etc. In 1926, when the Rentenmark replaced the mark, the farmers brought all their produce into the cities because they were happy to be paid in rentenmarks. The trouble was that the people had no currency, no rentenmarks, because they had lost all their wealth in the transfer from marks to rentenmarks. So, they just stared at the market tables laden with food, which the farmers refused to sell to them one year earlier. I want my family to eat, and the farmer would like to sell me his food as long as he trusts my currency. I believe he will trust silver, so that he will be willing to open a GoldMoney account and receive my payments that way. Same for Sainsbury's etc.

jonte: It must be quite clear to most people, except the EU, that no one has the  beginning  of an idea which will resolve Europe's problems. What a shame that the time Europe is on its knees finds Britain on her knees also.  I guess incompetence is "catching". I just wonder how much more of this we'll have to put up with. The only hope seems to be for Europe to return to a system of Nation States with the government of each responsible for doing what is necessary, as opposed to taking the barked commands from a semi communist EU.

eurotop40: Nation states are responsible for famine, war, genocide and death.

madamarcati: No, they are but a convenient portmanteau flag to hide behind. Individual men and women with names and faces are.

eurotop40:  Sure, just like Islam and suicide-bombers.

rdgeorge: silly person… people are responsible for most of that… and unless I've missed something death comes to us all. (And I think the USSR was a collection of nations not unlike the EU and they managed to kill quite a few million people).

KlingonOffTheStarboardBow:  The British people WANT vast overborrowing and wasteful spending leading to eventual economic collapse along with vast and uncontrolled immigration. This is obvious, or they would not have voted Labour. You should be happy that the people are getting what they voted for.

madamarcati: It's called Democracy.

brian_d:  Sometimes I can't understand your position, Klingon.

edhooper: jonte "semi communist EU." There's nothing semi about it.

edhooper: I'm hi jacking the blog to pass comment on UKIP and the local elections, basically because I can't post anywhere else. There has been a remarkable apology issued by the Conservatives for their constant attacks and insults directed at UKIP and their supporters. By supporters I also, of course, include voters. In my opinion the message from the electorate can be simply summed up as this: We want our country back.

returnedexpat: No, not really - perhaps 25% agree with UKIP.  Most Tory voters are Eurosceptic but still support the Conservatives. Vote UKIP and you get Labour - and even more Europe.

rdgeorge: Nope don't buy it. 25% is huge for a party thats faced a concerted campaign of demonisation… Saul Alinsky would be proud of his acolytes. I remember the vacuous prat Clegg getting a huge boost from the televised debates and that translated into a significant increase in the lib dem vote. The TV debates would be perfect for Farage and getting over 30% is certainly not out of the question. Then they may fall back or if labour wins and does pursue more EU integration then it may well grow again, possibly as the conservatives implode rather like the lib dems have - and they both deserve it too.

barncactus: Indeed, so why did we allow our politicians, most recently the furtive Brown, to sign up for so many EU disadvantages in the first place? Surely even the dimmest UK citizen knows that you can't just leave politicians 'to get on with it'?

edhooper:  barncactus Because the electorate was bribed.

JaneDoeNL:  Morning Ed, I'll join your hijack - despite the extremely rude and unwarranted comment of fellhopper below - perhaps a Tory whose nose has been put out of joint. Protest vote, split vote, one-issue party, can't get ahead in a FPTP system - all of those things need to be set aside as the sham arguments they were, intended to preserve an increasingly negative status quo. The simple fact is that complacency has been around for too long in Europe, both UK and the continent, and shysters, self-serving politicians are playing games with people's lives. UKIP proves that the political establishment can be given a kick up the backside. Good for UKIP, I hope the members keep a steady head and prove that common sense can prevail over vested interests.

upton: Morning Jane. RIP Dave 'Yes/No/Maybe' Cameron. The man who gave away the Conservative voters. .

edhooper:  Morning Jane. Don't worry about fellhopper. The hoppers fell out with the hoopers a long time ago. They have a big problem with reality.