Tuesday, May 20, 2008
Ambrose Evans-Pritchard - aka Mr Bear
The Telegraph: ECB’s Trichet calls crisis 'very serious'as troubles reach Europe
The European Central Bank has warned that the world economy is still in the grip of a "very serious market correction" and risks repeating the inflation debacle of the early 1970s if global authorities respond by slashing interest rates too soon.
Posted by sold 2 rent 1 @ 10:20 AM (559 views) Add Comment
4 Comments
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1. sold 2 rent 1 said...
"Yet the ECB is still walking a tightrope. The food and energy spike may prove a short sharp shock that tips the economy into a ugly downturn. Both Société Générale and Dresdner Kleinwort have warned that the bigger danger may prove to be deflation. Since it takes up to two years for monetary policy to work its effects, the ECB will not know whether it has made a mistake until it is too late."
2. letthemfall said...
"The process of debt deleveraging in Spain, Greece, and Ireland has barely started."
Same in the UK. This is the crux of the matter. All the price ramping in the world won't change this; in the end debt has to be repaid, unless a growing section of the population works for the rest.
3. uncle tom said...
The gravity of the problems in the eurozone are immense, yet the politicians seem almost universally silent.
Lull before the storm...
4. plato said...
Trichet's Nightmare :- "The danger of a wage-price spiral should the inflation genie be let out of the bottle."
Too many inflated prices, across too many sectors in too many non-productive countries.
Worried about Inflation ? Stop printing money then !