Target Practice

Amidst the hoopla over a possible Grexit lies the TARGET2 payments system and by far the largest claims on that system are those of the Bundesbank.

In January, as talk of a potential Grexit increased daily, a funny thing happened... claims on German banks in TARGET2 increased significantly suggesting that 'someone' has been moving a lot of money from 'somewhere' into the safety of German banks.

Of course, we have no idea who the 'someone' might be...

TARGET2 Bundesbank Claims


3 thoughts on “Target Practice

  1. James Grant’s recent book helps to explain the variation in ‘inflate/deflat’ in the early 1920’s. One might not have such a dim view of the importance of the graph’s variation. Similarly, the graph in the 1940’s has obvious associations.

    I do not believe that the unemployment rate in the US today is as mentioned in the article. One ought to be careful what one quotes and the associations there to drawn.

    The interesting question is raised however, if the Fed has such information – do they realize it is tainted? If not, are their models completely incorrect? If they do not realize the data is tainted, what tint is required?