“Tyler Cowen looks at the massive scale of ECB bond buying and asks
There is a longer discussion here. One way to read this is: “That’s not yet a lot.” Another is: “Oh my goodness, they’ve already been doing quite a bit.” Another is: “Lots of buying without a credible signal of future intent isn’t worth a whole lot.” I would stress the point that credible long-run signals don’t exist for Europe right now. No one knows what “the game” will be like a year now, or less. That makes all possible solutions harder to pull off, since announcements can be shrugged off as idle chatter.
My obvious position is that you can buy all the bonds you want and it means less than a promise to buy bonds.”
Also: ” …while I definitely see the ECB as the type of institution that would dither while Europe burned and don’t at all see them as the type of institution that would give in to a speculative attack. I feel pretty confident that they would double down against the speculator and ruin him or her as a matter of principle.”