European Central Bank considering cutting overnight rate to a negative number...

Quasi Socialism is working out so well for Europe...

Via The Telegraph:

Mario Draghi, the ECB’s president, said the governing council had discussed a cut in overnight deposit rate to below zero for the first time, and was "operationally ready" to do so if needed.

The comment sent the euro into a nosedive, dropping from $1.3075 to $1.2950 in just two hours. "A negative deposit rate is the mother of all sell signals for a currency," said Hans Redeker, currency chief at Morgan Stanley.

"You only do it if your purpose is to drive down the exchange rate to help exports. We know from Japan’s experience that you lose control of monetary policy if you go that route. We don’t think it will happen because the cost is too high, so we expect the euro to rebound."

Mr Draghi struggled to explain why the ECB held its main interest rate at 0.75pc, even though it expects economic contraction of 0.3pc next year, with inflation falling below its 2pc target. He said there had been a "wide discussion", a code term implying that several members pushed for a cut.

Obama is trying to model out government and economic system after Europe....