This is the truth, nothing but the truth, and the whole truth, with a waterboard as my witness!

Saturday, April 18, 2009

Channeling Irving Fisher

I have said it before so I will say it again, that the actions ECB has acted too slowly.

In the above photo Trichet channels Fisher to fight inflation.

He rejected allegations that the ECB has been too slow or timid in its response to the crisis, noting that it was the first central bank to begin extraordinary provision of liquidity to money markets during the crisis, back in August 2007..........

"We trust that this solid, medium-term anchoring of inflation expectations is part of our duty to be a solid anchor of stability and of confidence, and we can tell our fellow citizens: You can have confidence in the fact that we are there as a solid anchor and we will deliver what we say we'll deliver - price stability over the medium term - and we are trusted to be able to deliver."


Gold slightly lower as deflation worries continue


HAMBURG, Germany, April 15 (Reuters) - There remains little risk of deflation in the euro zone, European Central Bank Governing Council member and head of the German Bundesbank, Axel Weber, said on Wednesday.

Well let me tell you this, I posted this to point to it later; and very soon.

Dump the Euro as collectivvelly it is more than the French and German industrial output or consumption and Easter Europe is in a mess. Dump Gold, it is not being utilized in manufacturing production and the fear sales are saturated. And finally as a consequence of the ECB decision; go long the dollar.

Now let me point out this, that treating third world economies outside the Euro as 3rd world economies is one thing, treating economies within the Euro in Eastern Europe as third world economies is another~

The concept that the ECB would through costs externalization evoke a recovery, utilizing the argument:

The provision of more social services by governments in emerging Asia, including China, would encourage residents to spend more and save less, and would help stabilize economies that have suffered in the current downturn because of their focus on exports rather than domestic demand.

Is laughable..

I think that by the time that the ECB wakes up to the hard facts that deflation is spreading, and that that deflation will go well beyond oil, metals, and third world exports, that that will spread to Eastern Europe... will leave the ECB as a study in the future as to what not to do in a similar crisis.

God help us... the man is still fighting inflation~ instead of establishing an inflation target.

Weber and Trichet are bankers.. they say that there is no danger of deflation, when was the last time you saw a banker make a bad call?

No comments: