“Giant Wave Of Money” Heads For Sweden, As Draghi Creates “Nightmare” For Riksbank

Early on September 3, we warned that the Riksbank was at risk of making a meaningful policy ‘error’ by not cutting rates ahead of the ECB announcement expected later that morning.
It wasn’t that we were anxious to see Sweden plunge further into the Keynesian Twilight Zone by taking the repo rate further into negative territory. Indeed, we never recommend going full-Krugman as Sweden did starting late in 2011 after marking a sharp policy reversal. For its trouble, the Riksbank has been left with a massive housing bubble and successive rate cuts have had only a minimal effect on inflation expectations.

This post was published at Zero Hedge on 10/26/2015.