Trichet is following Ben Bernanke and Mervyn King toward the abyss

I've been quite vocal about Trichet and the ECB since August 2008 when Trichet decided to abandon the Euro and follow Ben Bernanke's and Mervyn King's demagogic, dangerous and destructive policies. I've said it before and I'll say it one more time: Trichet should resign! (recommended read to understand my stance.)

So today Trichet reduced the repo rate of the ECB by 0.25% to 1.00% (which really doesn't have any impact and is really a symbolic act since the mid-March actions when the ECB Stealthly Approaches Zero Rates) but they also announced that they would start Quantitave Easing (which uncyphers into plain English to print money). The good news is that this might be just another symbolic gesture from Trichet in order to please politicians because he is going to print only 60 billion EUR which is a drop compared to the size of the Eurozone economy and also compared to the trillions of USD that Bernanke is printing.

[Update: I just found this report on Bloomberg, which basically confirms my analysis]

(Bloomberg) -- Jean-Claude Trichet has dragged the European Central Bank into a new era by pursuing direct asset purchases over the objections of Germany’s Bundesbank.

President Trichet today announced the ECB will buy 60 billion euros ($80 billion) of covered bonds, taking markets by surprise after Bundesbank chief Axel Weber had campaigned against such a policy.
[...]
Trichet’s policy shift, pushed by smaller nations such as Cyprus, Greece, Austria and the Netherlands, is a setback for the conservative Bundesbank, which provided the blueprint for the ECB at its inception in 1998.
[...]
“It’s a blow to his personal credibility,” said David Tinsley, an economist at National Australia Bank in London. “The Rubicon that’s been crossed is that the ECB will be accepting private credit risk on its balance sheet.”

Weber said on April 15 that “direct interventions, such as the purchase of corporate debt, shouldn’t take priority.” He pushed instead for the ECB to lengthen the maximum maturities on its loans to banks to 12 months from six months, a measure the central bank also announced today.
[...]
The ECB’s bond plan is nevertheless dwarfed by programs in other parts of the world. It is equivalent to about 0.5 percent of euro-region GDP, says Lloyds TSB Group Plc. That compares with debt-purchase programs in the U.K. and the U.S. amounting to 8 percent and 2 percent of GDP respectively.

Here are the previous related posts:

• 2009-14-18 Trichet should resign
• 2009-03-12 ECB Stealthly Approaches Zero Rates
• 2008-10-14 R.I.P EUR
• 2008-08-08 $ up 0.05 € in 24 hours as Trichet abandons war against inflation