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Realistbear

E C B : Inflation Is Not A Threat

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http://uk.finance.yahoo.com/news/ECB-Trichet-no-threat-medium-reuters_molt-2751412277.html?x=0

ECB's Trichet: no threat yet to medium-term price stability
13:42, Thursday 3 February 2011
FRANKFURT (Reuters) - Inflation pressures driven largely by soaring commodity prices do not yet pose a threat to price stability over the medium-term, European Central Bank President Jean-Claude Trichet said on Thursday.

I can understand Merv peddling this line as he knows what an IR hike will do to the housing market. But I am not so sure Jeane-Claude Trichet has an HPC agenda going on. Rather, the Elephant in the room is still being observed and the fragility due to debt cannot stand any IR rises.

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JCT knows that any IR increase would send the PIIGS over the edge, and won't touch rates for the foreseeable future.

He hinted at higher rates in recent weeks simply to push the Euro up, to soften the blow of higher commodity prices, since most countries in the EZ are net importers.

Smart move? Only as far as Germany is concerned, since all else being equal the high Euro penalizes the PIIGS economies vs. Germany.

France is kind of stuck in the middle, and should stop pretending it's still some kind of European superpower.

France Pushes for Buybacks to Stem Crisis in Split With Germany

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I perceive people suggesting that inflation is a temporary problem to be just as idiotic as people suggesting that falling off a cliff is only a temporary problem.

Sure, you won't be dropping any more when you hit the bottom, but thats really missing the point.

Inflation at 5% for a few years might be temporary, and it might drop afterwards. But the impact of those years of inflation won't disappear just because the rate of change is slowing..

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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