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SF wrote "than an Italian desperate to prove he's German underneath.".
The last Italian who tried that, died trying as well as backing the wrong side. I hope history does not repeat itself for his sake.

Will the Finns prove to be the ice on the road when loans to Portugal finalised?
Perhaps Weber is being prescient and planning to lead a Northern EU when all this blows over/up?

That they are unable to use simple,clear, unequivocal and unambiguous language that does not require huge sophistry to understand probably illustrates that they are part of the problem rather than part of the solution. How they enjoy their games ! Nero fiddles, Rome burns , nothing changes until disaster befalls.

Blogs just aint what they used to be....

Interesting. Still doesn't convince me Trichet is dove-ish, we ony need to remember the damage he inflicted at last month's meeting, see the analysis on my own blog on this:



Since then, the data that has been coming out from the eurozone and internationally confirms they moved too early last month, hence todays seemingly dove-ish remarks.

With the stress tests next month likely to show serious fragility among European banks next month in light of looming restructuring of Greek, Irish and Portuguese debt any further rise in 2011 could prove suicidal for the eurozone. But the ECB can always hide behind its mandate, ignore financial instability and the collapsing economies of the periphery, and continue to worry instead about certain German housewives. If so, Draghi's term of office could well prove a lot more turbulent than Trichet's and will certainly test his inner German, if indeed there is one, to his limits.

'Lest we forget, the eurozone - particularly the periphery - is relying on an export-led recovery ....'

With the world and his wife wanting an export led recovery it begs the question of who will be doing the importing. Lest we forget, the UK exports - or should that be exported - more to Portugal than China in the very recent past.

Shows how weak the Euro economies are. Relief for those consumers who just cannot bear to stop buying and carry on borrowing - just like us in the UK.

ECB carries on as before.

Krugman blog, July 23, 2010, 'Jean-Claude And The Invisibles':

"And Jean-Claude Trichet will clearly be among the main protagonists.

His column in today鈥檚 FT is almost a caricature of the austerity genre. Trichet鈥檚 explanation of why we must fear the invisible bond vigilantes would be funny if it didn鈥檛 have such serious consequences:


'In extraordinary times, the economy may be close to non-linear phenomena such as a rapid deterioration of confidence among broad constituencies of households, enterprises, savers and investors. My understanding is that an overwhelming majority of industrial countries are now in those uncharted waters, where confidence is potentially at stake. Consolidation is a must in such circumstances.'

Ask yourself, what evidence does he present in that passage? None, because the reality is that bond markets don鈥檛 look at all worried. What model does he refer to? None; the vague reference to 鈥渘on-linear phenomena鈥� is a giveaway that there鈥檚 no there there. So what are we to rely on for his definitive judgment that 鈥渃onsolidation is a must鈥�? His 鈥渦nderstanding鈥� that 鈥渃onfidence is potentially at stake.鈥� This is a basis for policy that affects hundreds of millions of workers?

Meanwhile, I don鈥檛 know whether I鈥檓 reading too much into this, but Trichet seems to be backing down a bit on the claim that fiscal contraction is actually expansionary 鈥� maybe because the alleged evidence for that proposition has been pretty thoroughly debunked, with everyone who鈥檚 looked at it seriously realizing that all of the alleged cases involve either an export boom, a sharp fall in interest rates, or both, which makes them irrelevant to our current situation.

But the message is now free-standing, relying neither on theory nor on evidence: austerity now now now."

Both the UK and large parts of the eurozone economy are essentially becalmed or seeing slight headwinds - hoping that a fair breeze will rise up from astern allowing us to glide into the smooth uplands and out of debt. However the longer we wait the stronger the likelihod that any stern breeze will evapourate and the headwinds will increase to gale force. If we all just keep drifting along like this the ship will founder at the first sign of trouble. We should in fact be pumping out the ship like billio so we have some margin to cope with adverse conditions

Scottish Speculation?

Let's assume that Scotland voted in a referendum for independence will they scrap sterling and join the Euro zone - it would make economic sense to break away from the City of London after all. Then perhaps rather than the 5 comments this matter has received in the first day of a blog entry because the British people will be more interested in who heads the ECB.

Of course, my standpoint is that the whole of the UK should be bothered as the ECB will become our central bank as soon as we break away from the disastrous and crippling banker centric Bank of England that runs the whole British people for the sole benefit of a very few City banker friends. [They got it wrong on interest rates for the 26th month, indeed the 150th month running this week!]

I think that the debate on the significance of Mr.Trichets words was put well here.

"So if you believe that Mr.Trichet was responsible for the fall in the Euro you have to believe that a change of maybe only one month in the ECB鈥檚 plans to raise interest-rates is that material."

Whilst I was wondering how much one month matters I noticed a much more significant point. This comes from America.

"Now we only have one days evidence so care is needed, but it does allow me to illustrate why I have felt that a new round of Quantitative Easing which would no doubt be called QE3 is not only quite possible but even probable."


That would be really something to discuss.

Top German Politicians Want Portugal To Dump Its Gold In Exchange For A Bailout

Twelve comments in a day.

I'm not sure what SF's point is, to be honest.

Better analysis here鈥�

Ten reasons for thinking the world economy is turning soft

"4. At 20:19pm 5th May 2011, ciderwithdozy wrote:

Blogs just aint what they used to be...."

A bit of an unfair comment. Would you care to justify your comment or have you chosen not to bother visiting again ?

BTW, miy blog is !

European Central Bank - what is that exactly?

'Trichet's pointed comments about the dollar suggests a concern for the rising Euro as well. Lest we forget, the eurozone - particularly the periphery - is relying on an export-led recovery as well. '

But the euroland is in external balance and has been for years. I don't see how EZ as a whole could adopt german model, which is runnig trade surpluses against other EZ members and in the process basically bankrupting everyone.