Where is He? The Mysterious Dissapearance of Jean Claude Trichet

Well this is a rather frivolous post about a fairly serious issue. Has anyone seen Trichet? (No, not Kelly, Trichet). I imagine the financial markets would like to know what he thinks. Or rather, maybe they wouldn’t, but they need to.

Basically this isn’t a case of quietly fiddling while Rome burns (and Q2 GDP, and September retail sales) but it damn nearly is (burning I mean, or was that Paris), and the Reichstags won’t be far behind. Meantime hardly a flat or house is being sold in Spain.

So with all eyes focused on US data while the eurozone economy is visibly tanking, or rather wilting by the day, where the hell is Trichet? Hasn’t anyone else noticed how he has suddenly gone missing? Strong vigilence is obviously over, but when the hell is he going to start explaining that he might have to lower interest rates, and when he finally does this how will the financial market activists respond? I mean some of them seem to have very little idea about what is actually going on at the moment. Over at DailyFx, for example, they seem to be under the impression that the eurozone is a country or something:

“As an export dependent nation, the Eurozone has a lot to lose if the Euro continues to rise.”

I think they meant Germany there, since France certainly isn’t dependent on exports, and Spain has a whopping trade and CA deficit which puts the US one really in the shade.

Actually the general tone of what the DailyFx analyst has to say isn’t so far from the mark:

The Euro made a new record high today despite larger than expected drops in German business confidence and import prices. Economic data out of Europe continues to get worse and if the Euro does not stop rising, the European Central Bank will be forced to verbally intervene in the currency. Don’t forget that the Euro topped out in late 2004 after Trichet called the moves brutal and he may have to do so again as German business fell to a 19 month low in September. This is a result of deteriorating credit conditions, a strengthening currency and tight monetary policy. As an export dependent nation, the Eurozone has a lot to lose if the Euro continues to rise. The only major benefit of a strengthening currency is lower inflationary pressures. We are already seeing the initial impact with import prices falling for the first time in nearly 2.5 years. Less inflationary pressure means less pressure on the ECB to raise interest rates. If we see a material slowdown in economic data, softer inflation may actually give the central bank the flexibility it needs to begin talking about lowering interest rates.

So this is the point. We are soon going to be into declining rates at the ECB, and then what is going to happen to euro/dollar. I ask you? Are the markets ready for this?

Even ECB-adviser and hawk Joaquim Fels now has the current ECB rate as neutral, and of course, if the fundamentals are deteriorating, neutral quickly becomes “overtight”. No wonder Trichet is hard to find at the moment.

If you are looking for more serious analysis of all this, Claus Vistesen has some over at Alpha Sources.

As for Trichet, after a long search I have finally located him, he has been in Holland, talking about the importance of demography for Europe’s future. Obviously he is rather more focused on the longer term right now. I can well understand why.

This entry was posted in A Fistful Of Euros, Europe and the world by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

20 thoughts on “Where is He? The Mysterious Dissapearance of Jean Claude Trichet

  1. Dollar-DMark is now DM 1.397/$ versus an all time dollar low (April 1995) of DM 1.35. So we’re about four pfennig or two euro-cents from the likely floor. I’m not in the markets enough (ok, at all) to say whether they’re ripe for a new story (falling German confidence and euro weakness could be it) and thus a turning point, but it looks like a strong possibility.

    Unless you think there’s a reason to go below the all-time dollar low?

  2. Hi Doug,

    I am sure you are right and that the story is about to change. This has all been about relative yield. So the only question is it going to come to pass. We could certainly see a new low (or various new lows)on the dollar before we start the long march off the other way.

    Downside risk in the eurozone is very large at this moment. Italy is probably already in recession IMHO, Germany may well be following, and the new part of the picture – since it has so far help prop up the average growth rate during weaker moments – is Spain, where I now feel the slowdown will be pretty severe. How severe is impossible to say at this stage.

    The thing is, this isn’t about interest rates in Spain any more, it is about lending conditions. What does this mean? Well consider the typical young first time buyer couple who want a flat. The current entry level in the big cities is now around 300,000 euros. The thing is, during the boom, the banks would lend 100% or even 110% on this valuation. Now no one will go above 80%. This was the immediate response to the US sub prime issue.

    So now, to buy a flat of 300,000 euros you need to put up 60,000 euros deposit, plus notary fees and furniture. No young people have that kind of money saved any more.

    Worse, their parents, who would have helped them before, have also sunk their money into property.

    So we have to wait while youngsters on 1,000 euros a month save 100,000 euros or so between two. This is a major sea change, and won’t be resolved overnight. And remember all that saving will mean less consumption. So you can forget Spain driving the eurozone for a few years I would say.

    Which leaves us, ironically, with France, which is the remaining engine, although Trichet is quarreling fiercely with precisely the people who can help him out, which is, afaiac, a measure of the severity of the situation.

    On other fronts the FT just reported that the ECB had to pay out €3.9bn – the largest sum since October 2004 – from the emergency lending fund yesterday. So the worries even in the banking sector, let alone the real economy, are still important. This is also reflected, as I report here for those interested in the more technical side of things, in the fact that the 3 month euro libor (inter bank) rate is still way above the level it should be, having shot-up 50 bps in August and having stubbornly refused to subsequently come down.

    Compared to what we are beginning to see in Europe the US economy looks to be a veritable ocean of calm and tranquility. Which is why I think the dollar is about to move up again. But this will await Trichet’s clarification. So like I said, where the hell is he?

  3. “Are the markets ready for this?”

    Of course not. In all of economic history, markets have never been prepared for any of the changes that have come. Not once. Economists always base their projections of what is going to happen based on what has happened in the past. Unfortunately, history never repeats itself (it’s historians who repeat themselves :)), and so their projections are invariably inaccurate. Nevertheless, markets have always managed to adapt, and of course the economies have always managed to survive one way or another. And in fact, after some transitional period, inevitably do better. Just as they will this time.

    As an American, I have to disagree with the contention that compared to Europe, the US seems to be a “veritable ocean of calm and tranquility”. On the contrary. The EU and the Euro seem quite reliable and stable to me, while the dollar seems about to collapse entirely. People are vastly underestimating the degree of chaos in the American political and economic scenes, not to mention the corruption. I personally see a major collapse coming, comparable to that of the Soviet Union during the 80s. The dollar will not do well, to put it mildly.

    I also have to disagree with the contention that a rising Euro hurts Europe. It may hurt a few people, but it also helps other people. I know as an American, I have converted some of my dollars to euros, and in doing so have saved/made a considerable amount of money over the past couple of years. In other words, Americans are investing in Europe rather than America. I can’t see how this would hurt Europe or the Euro.

    I also think that as people move away from the dollar as the international reserve currency, and the euro increasingly becomes one of the replacements, Europeans also stand to benefit in a lot of ways.

    “So now, to buy a flat of 300,000 euros you need to put up 60,000 euros deposit, plus notary fees and furniture. No young people have that kind of money saved any more.”

    I don’t know what salaries are in Europe these days. But This chart at finfacts.com indicates that the average per capita income for most EU countries is considerably over 30,000 euros:


    So 60,000 euros is less than a year’s pay for the average western European young couple. So saving that much doesn’t seem out of range to me at all. On the contrary.

    Just my thoughts. But I’m not an economist, so what do I know (except that the US is in big trouble, that’s for certain.)

  4. to Mike, the 300000 € price is in Spain, and here salaries are mostly under 20000€, and young peoples earn rather less, these last years the expression “mileurista” has a frequent use. It means peole whose earnings are under 1000€/month.


  5. I disagree that this, if true, is any problem:

    “The thing is, during the boom, the banks would lend 100% or even 110% on this valuation. Now no one will go above 80%.”

    If people wait and save a bit longer before buying, that is all to the good. Otherwise both they and the unscrupulous banks deserve to suffer.

    I myself bought my first apartment in Vienna in 1999, and had saved a third of the money beforehand, another third was contributed by my parents, and the rest is all paid off by now. I would never have bought with less than 30% of the total saved up, and neither would anybody I know, we want to sleep soundly at night and not worry over the mortgage. Most of my acquaintances are quite debt-averse, in fact many of my parents’ generation hesitated for years to even get a credit card, some have never done so.

    Moreover, with smaller families, a lot of people inherit or receive parental help enough for the first investment, and if not, renting is no shame.

    With no current debt, now I am already saving for my own children’s future homes. My main worry is not lending conditions, it is rather that the banks entrusted with my savings could default. It happened twice in my grandparents’ generation, after all.

  6. Hi Mike,

    Well first off I will diplomatically avoid commenting on the current state of the US economy, other than to say that I think the US economy is a lot more robust than many seem to imagine.

    I think there has been far too much attention paid to the current account deficit issue, and to the trade balance with China one. All this sort of thing makes for good headlines, but often for this very reason can be quite misleading.

    Now, the housing issue is something which some Eurozone economies share with the US. The most affected are undoubtedly Ireland, Greece and Spain (the UK note is not in the Eurozone, nor is Sweden).

    The first two are not especially important for the aggregate data (unless you happen to be Irish or Greek that is), but Spain is strategically important for the headline eurozone data due to the relative size of its economy and the fact that in recent years the Spanish economy has had over-par growth while Germany and Italy have had (what is now, with the big exception of 2006, congenitally sub-par growth).

    In this sense the most *stable* economy in the zone is undoubtedly the French one, since it maintains a line of more or less 2% GDP growth year in year out.


    My problem isn’t especially the high euro one. That is a simple consequence of having the single currency at a time of dollar weakness, and were the underlying economic position sound, we could doubtless learn to live with it.

    But the underlying economic position isn’t sound. That is my whole point. The German and the Italian economies are moving towards recession more quickly than the US one (the latest German retail sales data out today simply confirm everyhting else we are seeing) and thus normally, and logically, the ECB ought – like Bernanke and the US Federal reserve – to lower rates to soften the landing.

    A landing which can be all the harder since this time Spain is also falling, and quite fast.

    Basically the so called financial turmoil of last August only reflected European bank exposure to sub-prime lending in the US, although with the Northern Rock affair we have the first signs of this starting to happen – mortgage defaults I mean – here in Europe.

    I link to some information on the problems the small outfit Llanera have been having here in Spain since this gives us an indication of what is still to come.

    Basically, since the ECB started raising one year after the fed (more or less) we can expect the mortgage delinquency problem and the housing starts problem to be running at a similar or worse level to the current US one in Spain, Greece and Ireland when we get to the summer of 2008. ie we have a long road ahead of us on this one.

    The lastest data from the Bank of Greece is for June, but construction was already at that point down some 8% year on year.

    So the ECB needs to come up with a new story. That is what this post is about. We have, up to now, had the so-called “decoupling” thesis out there. This story is IMHO about to come to a sudden and abrupt end, as it becomes obvious there has been no decoupling. Japan GDP has shown a 0.71 correlation with US GDP since 2001 , this is the highest level ever. Turkey, which only sends some 5% of its exports to the US even has had an amazing 0.74 correlation with US GDP growth over the same period, and it has this strong relation with US ups and downs since it is “coupled” via Europe, which is in its turn “coupled”, principally via German export dependence (if you doubt this please check out my longish post on the topic on Bonobo Land which is linked to in the post here).

    So in many ways things have never been so tightly coupled. This phenomenon is aka globalisation, and I don’t know which world the “decouplers” are living in here.

    Of course there is “re-coupling” of the train going on, as some new engines move nearer the front, but here we are talking about places like China, India, Brazil, and, of course, Turkey here, not the old gang of ever more old and weary “usual suspects”.

    So basically we are now in for what the late lamented Jean François Lyotard would have called a change in “metadiscourses”. And this is where the difficult moment comes, since no one really knows how the markets will respond to the fact that they have been getting it all wrong, and this is, I think, why our poor friend Jean Claude Trichet, god bless him, is being so media shy right now.

    And that, is the point of this post.

    Since you admit you don’t know much economics, I hope some of this at least was helpful.

  7. Hi Austrian

    “I disagree that this, if true, is any problem:”

    Well, for better for worse, it is the case I’m afraid (I imagine you are not questioning my veracity here). Bit then since you don’t consider it to be a problem I will try and explain why it might be.

    The thing is, morally you may consider saving a good thing. You are entitled to that view, which as I say is a moral, and not an economic one, but this is one of the reasons I am not especially in love with Austrian economics, since it seems to me to be a set of ethical beliefs rather than scientifically founded economic theories.

    In this sense I am much closer to another well known Austrian – Ludwig Wittgenstein (who was incidentally a good friend of Keynes) – who said it was better not to speak about things we know nothing about. This is of course a philosophical view on the nature of ethical judgement.

    As a “mere” technician here though, I can tell you what some of the economic – as opposed to ethical – consequences of all the additional saving will be: a big drop in current consumption.

    I have just, for other reasons – been going through the data on the age structure of the Spanish population, and Spain has just touched the ceiling with an incredible 40% of the population in the 25-49 age group. This is the highest of any society anywhere to date – Germany “maxed out” in this group at about 38% in 1995.

    Since these are societies prime consumers, then this helps explain the almost unique strength of the Spanish housing boom (Ireland is perhaps the other society that comes nearest to Spain). This group is now set to decline as a % of the total population while at the same time elderly dependents will rise as a share. Thus naturally consumption will weaken. Add to this the fat that many in the over 30 group have 100% plus mortgages on property whose value is now falling and likely to continue to fall, while those who are in the 25 to 30 age group are likely to have to start to do some serious saving, and you can see that the Spanish economy may well now limp along for some years.

    Latin America would seem to be the big possible plus in the Spanish account book.

    At the end of the day, I wouldn’t disagree with you that the borrowing in Spain has been excessive. It has, ironically, been the by-product of the existence of a single interest rate monetary policy from the ECB. The thing is, this process is now over, and sharp corrections are never a good thing. This is my point.

    Which do we want, a soft landing (if that is still possible) or a hrd one?

    Incidentally, Antoni Jaume, how are you? Thanks for the mileuristes point. I mean, I think it is very important to understand that virtually noone crosses the 1,000 euro a month frontier before 29 or 30, and these are the years when people are going to have to save, bye-bye bars, bye-bye restaurants, bye-bye small car market.

    Meantime the older brothers and sisters who bought before the crack will be stuck with an enormous quantity of almost useless debt.

  8. “So 60,000 euros is less than a year’s pay for the average western European young couple.”

    I suppose that is BEFORE taxes and social security? Otherwise that would mean that on average people in Europe are making 2500 euros net… No way, not on average.

    The following link, giving disposable income figures per European city, is much more realistic:


  9. Mike, here is one example, from Asturias: 11,626.8 net disposable income per year or about 1,000 euros per month.

    I am not an economist, but GDP doesn’t seem to be a very good indicator of median household spending power. The average income per capita based on GDP is in some way more an indication of what employers have to pay. Including both taxes, social security and the actual wage (what the employee takes home to spend).

  10. to Edward,

    “Incidentally, Antoni Jaume, how are you? ”

    rather overweight… otherwise fine, if with a lack of creativity. I’ve been a long time without reading AFOE due to some bug that rendered the blog in a unreadable way.


  11. Just to update a bit. Standard and Poor’s (you know, the ratings agency that everyone wants te see getting more strict) have just published a report on the mortgages sector. According to the FT

    Subprime mortgage lenders have been pushing up their interest rates and tightening lending criteria in recent weeks, meaning borrowers will be unable to find loans on similar terms.

    In addition, many subprime lenders, such as GMAC, are now asking borrowers to put down a larger deposit of 25 per cent rather than the 10 per cent required just a few weeks ago.

    So the question of increasing deposits is becoming more general than just Spain.

    and In its report, S&P sets out how the squeeze, in which lenders have struggled to securitise mortgage assets into the capital markets, will lead to borrowers paying more each month. This could trigger growing numbers of home repossessions as borrowers struggle to repay loans.
    “The likely scale of this upcoming effect, and the potential subsequent impact on borrowers’ payment behaviour is relatively severe by recent standards,” said S&P.

    Furthermore, borrowers are facing “one of the largest payment shocks witnessed since the 1990s”.

    Peter Tutton, a social policy officer at the National Association of Citizens Advice Bureaux, said this put continued pressure on consumers: “Some borrowers may not be able to refinance easily and are on a tight income and may see a whopping big jump in payments.”

    All of this is, of course, likely to trigger a significant downward correction in home prices in the eurozone housing boom countries. One of the most likely mechanisms in Southern Europe is via the second homes sector according to Michael Ball, a professor of real estate at Reading university and a housing adviser to the UK government.

    As an example of what might happen we could look at Florida where some resorts have seen double-digit drops in the past year alone. The number of home sales in Florida dropped 43 per cent between the first and second quarters.

    As I say, in Spain we are still about a year away from this, and closing fast.

    So as I said at the beginning of this post, where the hell is Trichet. He still hasn’t been out making any relevant comments on the latest Eurozone data, and this in now Saturday.

  12. Stupid question, but why would falling house values be bad for those who don’t have a house? You get them cheaper, after all.

    Secondly, if this was a bubble, wouldn’t it become worse if it were allowed to go on longer?

  13. Hi Oliver,

    “Stupid question, but why would falling house values be bad for those who don’t have a house? You get them cheaper, after all.”

    In and of themselves obviously they aren’t. They are bad for those who have already bought. Really if you are a houseowner in Spain, if you bought before 1998 you are fine, becuase when all this is done your house should still be worth more than you paid for it.

    If you bought between 1998 and 2007 then you are “exposed” in the sense that depending on how serious the contraction is, you may have a house (or flat) that is worth more than you paid for it, or you may not.

    Why might this affect those who didn’t buy, well it depends whether you need a job or not, or what sort of salary you want. I mean we really don’t know at this point how far any of this will go, but if those who have bought are affected badly enough, and if you are busy trying to save, then aggregate demand may contract, and this means less jobs and lower wages. It depends. Bad weather normally isn’t good news for anyone except the carpet bagger.

    Macroeconomics is a complex topic, but I would like to emphasise that at this point we have no idea how serious the situation in Spain is. I would also point out that Spain is not the only problem. It is simply and ADDITIONAL one in this downturn. The big issues are still Germany and Italy, I think.

    “Secondly, if this was a bubble, wouldn’t it become worse if it were allowed to go on longer?”

    Well of course. But you need to look at the whole picture here, and how having a single interest rate for everyone works out in practice. Also, most central bankers agree that it is better not to burst them abruptly. The “liquidity crunch” has thrown everything out of control a bit. That is the airplane is losing height much more rapidly than the piot should be confortable with.

    And thirdly, there is no possibility that this “bubble” is going to continue having – if you’ll forgive the pun – set light to the building, it is now a question of how to extinguish the blaze with the least collateral damage possible.

  14. Well, so you are saying that interest rates are too high. Isn’t that an almost constant complaint?

    Or are you saying that a common interest rate for all Europe doesn’t work? If so, what could be done? The costs of disestablishing the Euro would be by far higher.

  15. “Well, so you are saying that interest rates are too high.”

    I’m saying something a little more subtle I think. I’m saying that Trichet knows they are too high. The same as Bernanke did. The reason he is in hiding is that he is apprehensive about what will happen when he tells everyone the plain truth. Given what he has been saying for the last year and a half I can well understand how uncomfortable he feels at this moment in time.

    But I want to emphasise, the problem Greece, Ireland and Spain are having at this moment in time (and it is interesting to note that a big part of the construction boom in all three of these has been second home, in the West of Ireland 40% of the newly built properties are estimated to be unoccupied) is not to do with interest rates per se, it is to do with fear. Fear in the banking system about the consequences of having too many risky loans on the books.

    I am simply saying that given that this problem exists – Austrian would probably say serves them right, let them suffer for their failings – then the ECB needs to do something, and quickly.

    Whether interest rates were too high for some parts of the eurozone much earlier than now is a different question altogether which you lead into with this.

    “Or are you saying that a common interest rate for all Europe doesn’t work?”

    Yep. Probably I am saying this. I have argued this from the start, but…..

    “The costs of disestablishing the Euro would be by far higher.”

    Yes, so we have one almighty mess now. And we have to make and mend as best we can. What works for Germany won’t work for Spain and vice versa. We simply have to be pragmatic, and do the best we can under the circumstances, which is far from optimum for everyone.

    Except possibly for France, since France given that it is between the extremes, probably has the most appropriate monetary policy of anyone. Which is why I think Trichet is particularly ill advised to be quarreling with the one country which can help him out of his mess right now. The irony is of course that Trichet is himself French, and everyone was worried before his appointment about undue French influence in Frankfurt. He who laughs last last best, evidently.

    See next post coming later today.

  16. Well, it’s Monday morning, and there’s still no sign of him making any public statements. With the ECB due to meet on Thursday, and a press conference inevitably to follow, perhaps it is now unlikely we will hear from him before that.

    The man is incredibly “wrong-footed”. He was in Salzburg over the weekend, and as luck would have it, his topic was “transparency”. His view was that lucid analysis, speedy action, and consensus between experienced heads is the best way to minimize contagion. Would that, Jean Claude, would that!

    “In hectic times, when fear dominates, the absence of transparency fosters herd behavior and amplifies considerably the initial shock that triggered the turbulences”

    “Transparency vis-a-vis investors and savers, transparency vis-a-vis surveillance authorities, appears to be the best vaccine against contagion.”

    “It is always a recipe for additional difficulty to over-assess the gravity of a particular situation and therefore to over-react. But it is equally dangerous to misjudge a particular situation by underestimating its gravity and the risks that are at stake”

    As I suggest above, my principal concern here is not an over-high euro (although I do think that in some specific countries, like Italy, this is already presenting problems), my worry is the danger of an excessively strong reaction in financial markets to a change of story here in Europe. The euro closed at $1.42 in US trading on Friday, largely because people anticipate a weaker US economy and more interest rate reductions from Bernanke.

    But what about the eurozone economic performance, and interest rate policy at the ECB, this is the part of the story that people don’t seem to have clear yet. Bloomberg had a useful summary of the situation this morning.


    Central bankers from Europe’s Jean- Claude Trichet to Canada’s David Dodge may follow Federal Reserve Chairman Ben S. Bernanke in an about-face, shifting toward supporting economic growth and away from fighting inflation.

    Economists are scrapping forecasts for higher interest rates in the euro area, the U.K. and Canada as prospects for expansion weaken, and some even say inflation will soon recede enough to permit cuts. A similar change in outlook may delay expected rate increases in Japan.

    Evidence may come this week as the European Central Bank and the Bank of England each hold policy meetings Oct. 4. While economists don’t expect rate cuts this soon, ECB President Trichet and Mervyn King, the U.K. governor, may use the opportunity to signal greater unease about growth.

    What’s changing is the view of where the ECB and Bank of England go from here. Just weeks ago, the consensus was that they would only pause in their drive to push rates higher. That view was reinforced by anti-inflation rhetoric from central bankers themselves. Now, as credit-market turmoil in the U.S. spreads overseas, the pause looks more like a peak.

  17. Pingback: French and German Deficits In The Light Of Comparative Demographics | afoe | A Fistful of Euros | European Opinion

  18. I am surprised that the ECB is not following the Fed’s inflationary policy of low interest rates.

    I was always under the impression that Europe was just lucky with the Euro rising against the dollar. And it would only be a matter of time that the ECB would follow the cheap money policies of the FED, destroying the euro in the process, in order to keep our economy competitive for exports.

    Now that I see the inverse. The ECB consciously following a policy of tight money as to keep inflation down, I must say I start to believe again in Europe and am less inclined to convert my too valuable euro’s to somewhere else.

    Thank you Mr Trichet. You are Europe’s savior.

  19. Oeps, I made a mistake about Mr Trichet.

    Interest rates are ofcourse not the only toy central bankers have to influence the economy and inflation rates. Money supply growth is the best indicator on predicting future inflation. Money supply growth for the euro is, just like the US dollar and most of the other fiat currencies in the double digit rate, the euro, for 2007 at 12% ! That means every year there are 12% more euros in circulation. Now that is a guarantee for future price IN-STABILITY and a perfect foundation to get hyper inflation.

    So Mr Trichet is acting like he tightens the market by keeping interest rates ‘high’. In reality he is opening the gates of liquidity more year by year.

    And I was thinking we had our own Paul Volcker rising from the masses. I should have known better …

    In the end, Mr Trichet or any other central banker/planner can only – really – start fighting inflation and bringing down pain on the masses when the masses are also – really – tired of inflation and willing to accept the pain.

    Are the europeans ready to stop kricking up the enonomy with loose monetary policies? Or do they prefer to be cheated a little bit as long as everything continues to go ‘up’?

    Central planners, have mercy with them. Their job was impossible to start with.

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