Creation of Inflation in Europe

ECB-president Mario Draghi is stimulating inflation in the EU, through buying bonds, including buying of worthless national debt of struggling EU countries.

Draghi said the ECB, the equivalent of the U.S. Federal Reserve, would buy bonds, including the controversial measure of buying the sovereign debt of struggling European nations like Spain, Italy, and Greece, at the rate of about 60 billion euros, or $68.9 billion, a month through September 2016, for a potential total of more than 1 trillion euros.

See www.latimes.com...
So in times of financial crises, instead of deflation, we have to artificially increase inflation to stabilise the economy?
While possibly stimulating the economy for corporations and thereby creating some jobs, do the "common" people (I hate this label), really profit from this, even in the long term?

I would have basically thought, that growing economies have increased inflation, while shrinking economies have deflation, however is it now common to have an everlasting increase in inflation, as we have observed in the last few decades?
(I said "basically", surely there are examples otherwise, but that's not my point)

So to put it simply:
If I go to a store and buy the same pack of toiletpaper this week for €2,- instead of having it bought last week for €1,- I don't have to feel ripped off, because every time I wipe my ass, I stimulate the European economy?

We, as in all the citizins of countries in the EU, have paid (and are still paying) billions of tax money to bail out socalled collapsed economies of some EU countries and now we have to pay again through inflation of our currency, because the ECB decides to buy up those same bailouts, that we've paid for in the first place?
All the while, banks and other institutions are cashing in on interest, at the expense of the common taxpayer.
If somebody can point me to how this is not wrong on the most basic level of common sense, feel free to let me know.

Beforehand, I would like to state, that if you want to fall into an endless discussion of examples of how complex the economy is (the most commonly used excuse of the financial institutions that rip of the population in the first place IMO), than also explain this to the people with minimal, low or fixed income on how they could possibly make ends meet, after years of increased costs versus inflation and frozen or even lowered wages/income (which unfortunately still form the majority of the population).
Thank you for reading this and as always please try to keep it civil and, if possible, informative.

a reply to: Tyrion79

Last gasp before reset. All nations are inflating.

It just means stockpile everything now. The prices will continue to rise as currencies are devalued.

All nations except the U.K, it's deflating.

www.cnbc.com...

a reply to: Tyrion79

If I go to a store and buy the same pack of toilet paper this week for €2,- instead of having it bought last week for €1,- I don't have to feel ripped off, because every time I wipe my ass, I stimulate the European economy?

More currency chasing the same goods.

In the US they call it Quantitative Easing (printing more money). The more money in circulation the more they have to charge for stuff to keep up. Your wages aren't going to keep up, so you know.

Interesting thing about global inflation, everyone ends up at parity anyways lol. A few years delay in your paycheck, but ultimately back where you were.

a reply to: Tyrion79

So keep on enjoying your deflated euros buying more and more toilet paper, until the day comes when there isn't any more toilet paper because it's no longer profitable for anyone to make it. And your wife who works for a toilet paper manufacturer gets sacked because they can't afford to pay her any more.

Is it better that way?

a reply to: Astyanax

If you just knew the markup on tp, you would know they will always make a profit on it. There is always the sears catalog too.

Oh god, I just dated myself.

a reply to: Astyanax
Do you understand the context of why I gave the toiletpaper example?
I'm not complaining about standard inflation, if you've carefully read my post.
I sense some grudges at former employers here, maybe?

a reply to: infolurker
Could you elaborate some more on the reset.
I'm not sure what you mean by that.

originally posted by: Tyrion79
I'm not complaining about standard inflation, if you've carefully read my post.
I sense some grudges at former employers here, maybe?

This would not appear to be standard inflation, the Quantity Theory of Money predicts that prices will continue to rise artificially as the money supply increases.

a reply to: AugustusMasonicus
Sigh, you're right about that, however I was referring to ECB-president Mario Draghi, who is artificially raising (extra) inflation to stimulate European economy, as you can read at the beginning of the original post.

a reply to: Tyrion79

I was actually referring to what the poster you responded to said about deflated currency. That is not the same as what you posted in the Original Post and why I mentioned an artificially hiked money supply. Sorry if I was not clear enough.

I would like to add a video, while off-topic, compliments the subject:
www.youtube.com...
While this shows the situation as it is in the U.S.A. this also applies to the rest of the world.
(You can also find a similar video, about inequalities in the world, not nation wise)
I'm surprised about the lack of response, as of now, that my original post has shown.
Either I'm the only one that somehow cares, or maybe it's a subject that isn't comfortable being talked about.
Of all daily affairs and misery in the world, I would've thought that the subject affected alot of people on daily basis.
Apparently, I'm probably just imagining things here, my bad.

UPDATE:
The ECB just released a new report (PDF), analysing the impact on money and credit of the most recent
non-standard measures it took.

Reductions in bank bond yields, i.e. less expensive market-based financing for
banks, have improved their funding costs, enabling a more forthcoming bank
attitude towards lending.
In practice, the elimination of illiquidity and abnormally high spreads and mark-ups in malfunctioning credit markets has incentivised banks and other lenders to pass the funding cost relief on to final borrowers in terms of higher credit flows and better lending conditions.

Overall, the non-standard measures have helped push the intended monetary policy accommodation through the intermediation chain to reach final borrowers, i.e. household and firms.
This contributes to the recovery in lending and economic activity, which is expected to produce a sustained adjustment of
inflation rates towards levels below, but close to, 2% over the medium term.

So in a nutshell:
According to their conclusion, we all benefit economically by making higher loans available with better lending conditions, because the banks are relieved of debt, which has been bought by the ECB.
(also sounds like a second bank bailout on a large scale IMO!)
According to my conclusion, we're in deep #, because we'll all be in more debt ourselves, with currency that is less worth, while most incomes will probably stay the same, not to mention ever rising costs.
Instead of bailing out the banks AGAIN, when are the people bailed out?
All in all, this is just another scheme to keep the majority in debt, barely able to breath, while a few get richer and more powerful.
What kind of society am I living in, can someone please wake me up out of this nightmare?

originally posted by: Cobaltic1978
All nations except the U.K, it's deflating.

www.cnbc.com...

While only slightly and temporarily deflating, the U.K. is one of the few countries to have retained the right to operate independent currency within the European Union.
This the main problem of the €uro in my opinion, because it removes flexibility to change the value in relation to other countries.
Same reason why China is keeping the value of the Yuan extremely low, to benefit their export.

originally posted by: Tyrion79
According to my conclusion, we're in deep #, because we'll all be in more debt ourselves, with currency that is less worth, while most incomes will probably stay the same, not to mention ever rising costs.
Instead of bailing out the banks AGAIN, when are the people bailed out?
All in all, this is just another scheme to keep the majority in debt, barely able to breath, while a few get richer and more powerful.
What kind of society am I living in, can someone please wake me up out of this nightmare?

I agree with a lot that you have said. If we didn't bail out the banks and instead shared the money between each person living in the UK it would be anywhere from £700 to over £26,500 per person, depending on the calculation. I would say we would get around £5,000 per person.

There is a really good article here that explains it all, I hope you find it informative...
thefinanser.com...

And what are people going to do with that money? Either spend it or put it in their bank anyway.