Dear Mr. Trichet: Your Promises Are Hollow (At Best)

July 18, 2011 11:13 am

How many times is Mr. Trichet going to provide a snippet of information with no backup, no plan and no details? If his job is Rhetoric in Chief, then he is doing a superb job. Perhaps the #2 Spinmeister in the world (Geithner wins the #1 spot), his ability to move markets is amazing.

Now he is back with more mindless commentary – this time he is citing the will and determination of the region as the basis for overcoming their financial crisis. What’s next? Prayers, animal sacrifices or fortune tellers? As long as markets react positively to this gibberish, he will keep on dishing it out. (he must be laughing his head off behind closed doors)

From Bloomberg:

European Central Bank President Jean-Claude Trichet said Europe can surmount its sovereign debt crisis.

“Naturally the Europeans can manage the issue,” Trichet said in an interview with the Financial Times Deutschland, according to a transcript released by the Frankfurt-based ECB. “It is not a question of technique. It is a question of will and determination.”

Trichet said the euro is not in danger and remains “a highly credible currency.” He reiterated that the ECB will not accept as collateral bonds from a nation that defaults.

“If a country defaults, we can no longer accept as normal eligible collateral defaulted bonds issued by the government of that country,” Trichet said. “Because, in the eyes of the Governing Council, this would impair our ability to be an anchor of confidence and stability.”

In the event of a decision leading to a selective default or a default, “the governments would have to take care that the Eurosystem is presented collateral that it could accept,” he said.

Asked if German Chancellor Angela Merkel has acted too slowly during the crisis, Trichet replied: “Not in the least. I would see a discussion of this kind as being completely misplaced in the current situation.”

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