But that is possible only if, this time, the big bazooka really is put in place.

Its presence is enough to support a benign self fulfilling prophecy. In other words, Draghi s bazooka has anesthetized markets, impairing their ability to assess risk.

Thus, markets remain calm because they expect the bazooka not to be needed. In that case, the fact that it cannot be triggered easily does not pose a significant problem.

So far, the bazooka represented by the ECB s outright monetary transactions program has had the desired effect without having to be used. Eurozone financial markets have stabilized, and the euro has appreciated against the dollar and the yen.

In fact, the focus on speed and force the essence of what US economic policymakers now call the big bazooka has prompted an insidious mutation of the Japanese disease. The liquidity injections of quantitative easing (QE) have shifted monetary policy transmission channels away from interest rates to asset and currency markets.

According to this logic, it follows that only a formidable countervailing power such as massive official intervention can halt the ravenous dynamics of financial markets. Widespread use of expressions like aim a bazooka at the eurozone, and it s them or us, demonstrates a pervasive Manichean view of financial market behavior vis à vis governments.

Although investors believe that the backstop is unlikely to be used, its mere presence dissuades them from betting against Italy. In other words, the outright monetary transactions (OMT) scheme announced by ECB President Mario Draghi last July has served as the proverbial bazooka a gun so powerful that it does not need to be used.