From one crisis to another

The ECB is staving off a public and corporate debt crisis by buying massive quantities of this debt and thus by keeping long-term interest rates extremely low. A debt crisis will therefore probably be averted. But with this policy and the resulting excess money creation, the ECB is going to give rise to a bubble in residential real estate prices, leading first to a social crisis, as Europeans find it increasingly hard to access housing, and then to a financial crisis when the bubble bursts. The prospect of replacing a debt crisis today with a social crisis and financial crisis tomorrow does not fill one with enthusiasm. But there was no other choice.