Yes, the ECB has been a very responsible central bank.... so
far. I don't think that will change, unless Trichet is out.
That's why the Euro is up more than 50% since its inception.
This is IMHO, of course, not that Europe has no bubbles.
The priority of the ECB seems to be stable currency, not
anything else. The priority of the Fed, on the other hand,
seemed to be blowing bubbles under Alan Greenspan. Ben
inherited those, and I think the jury is still out there on
what he will do. I think Ben is a very smart man. He knows
stuff. He listens to everyone. He will try to choose an
optimal path to navigate inherited turbulent waters, but...
the storm tide is approaching, and it won't be easy. It is
very easy to criticize the Fed for what it's done, which is
right, but I still wonder why the housing bubble peaked
exactly when Greenspan retired? A coincidence? Nope. Ben broke
it by raising. He was also trying to gently devalue the
dollar to address the current account deficit. I don't doubt
1 second Ben knows exactly what he is up against. He would
like to devalue the dollar further, slowly, to address
the current account deficit. Ben will raise if the dollar
gets into real trouble... IMHO. |
