Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (25838)	3/17/2005 12:42:22 PM
From: zonder	Read Replies (1) of 116555

The ECB wants to raise rates becasue they think rates are overly accommodative and too low. Why would they think that if, as you believe, economy is not growing and inflation is not going higher? Do you think they are not very bright? That they don't have access to the information that you have? That they don't want what is best for their economy? Since they have started to talk about raising interest rates, could it possibly be that they see inflationary pressures that you don't? Or maybe have better faith in economic growth? At 2% rates, Europe runs high risk of falling into the deflation trap just like Japan Not really. Eurozone inflation at 2.4% is a very normal rate of inflation, one that the US oscillated around for most of the last 70 years, and a level that Euroland is supposed to stay UNDER. As I said, you are being overly dramatic.

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