Metaphors, Metaphors, Metaphors… The number of metaphors in econ articles is usually inversely related to the value of its content. This one is entertaining:

Draghi’s ‘QE battleship’ sinks the Euro

January
22 2015

Investors will welcome with caution the
ECB’s “shock and awe” announcement and will look to buy eurozone equities –
particularly exporters – and to a lesser degree the Danish Krona and gold.

Tom Elliott, International Investment Strategist at deVere Group, observes:
“The ECB has added its newest €60 billion a month battleship to the currency
wars, which only the U.S.
and Swiss stay aloof from. It is a larger-than-expected quantitative easing
(QE) program, designed to inflict shock and awe on markets.

“Its goal is to severely weaken the euro and so spur exports and
boost imported inflation. Let’s not pretend it will boost eurozone lending,
while the bank sector remains so weak.

“But while this will boost eurozone stocks, by weakening the euro,
investors should regard QE with mixed feelings.  Capital markets are in a
curious and unstable mode thanks to QE from other central banks that has pushed
up all asset prices in recent years with little discrimination over quality.”

Mr Elliott adds: “Many investors will pile into eurozone
export-based stocks. But a broader stock market recovery may happen if, and
when, stronger exports feed through into a broad-based recovery, which is the
intention.

“In addition, investors may look to buy the Danish Krona on the
chance that the Danes break their peg with the Euro, preferring a revalued DKR
and a recession to the risks caused by ultra-loose ECB monetary policy. The
current peg has resulted in a large and destabilising current account surplus.
This would echo the Swiss franc move last week, though in the case of Denmark the
significance would be greater given the duration of the peg with the
deutschmark and then the euro.

“If the idea of the Danish National Bank breaking the euro peg is
a step too far for investors, a small position in gold to hedge against the
whole global QE experiment ending in inflationary tears must be a reasonable
step for a long-term investor. If not, we can throw all monetary economics text
books away.”