Someone makes us fools. Well - not someone. It is the ECB.

Various people were expecting that the euro gets punched to its face by the European Central Bank (ECB) last week. But ECB didn’t do anything and kept its base interest rate on the zero. Deposit interest rate (or the fee for putting money into ECB) stays under the zero on the level -0.4 %. This once again proves that the loans in euros that are selling like hot cakes won’t get cheaper anytime soon. ECB is also not rushing into prolonging the duration of quantitative easing (QE). ECB is still intending to keep buying out 80 bn. euro monthly but only until March 2017.

Did ECB perhaps understand that the flow of mega-cheap money is not the cure for every single European sore? Might we reach the time when the prices of bonds, now artificially supported by demand from ECB, drop? That is hard to believe.

The fact is, that not even ECB can keep closing the eyes to the facts. The numbers are clearly saying that the flow of cheap money is not curing the low inflation, which irritates ECB so much. Its rate is staying 2 % under the ECB’s goal despite all the prognosis.

But if the ECB is really thinking about ending the buyout of bonds many states should set the alarm bells ringing. That applies – (not only) – to Spain. The national debt climbed almost to the 100 % of GDP. It is almost as high as what the local economy produces within a year. The country is for 8 months now missing a government that came from the elections. Now hold tight – Spain with this bad reputation gets a loan with 1 % interest on 10-year-old bonds. That is similar if you were having loans at home for everything from the vacations to Christmas presents, you would be almost fired from a job, your wife would be divorcing you but the banks would push money onto you anyway and with symbolic interest. That simply can’t work long-term. In 2012 the profits of the 10-year-old Spanish bond were reaching above 7.5 %. 1 % profit are not sustainable in Spain.

It is similar for other countries from the southern outskirts of the Eurozone. The problem is that these countries didn’t use the previous years to reduce the debt. Except – as I know ECB, it won’t want to keep these countries in it alone. That’s why I do not believe that it will be strict with the markets in the foreseeable future even if it might seem that way now.