Interest in Inflation

By Econ70 | 11/04/2013
A logo of cherry creek mortgage company

With year-over-year inflation in Europe running at just 0.7%, and core inflation at a record low of 0.8%, the European Central Bank should seriously consider an interest rate cut at their meeting this Thursday. While it won’t improve weak bank lending, it would weaken the overvalued euro, boosting exports. It’s better to prevent deflation because…

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Monetary Medicine

By Econ70 | 07/05/2012
A black and white image of the letter g

Things can’t possibly be good when yesterday, in less than an hour, the ECB, The Bank of China, and The Bank of England all offered monetary medicine to the weakening global economy. Problem is, easier monetary policy won’t help much. What’s needed is stimulative fiscal policy. Separately, while US labor market conditions are worse than…

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Irish GDP

By Econ70 | 03/14/2011
A man in a suit and glasses is holding his hands up

The ratio of Irish debt/GDP is now 100% and approaching an unsustainable 120%. Now each 1% point reduction in the interest rate the Irish pay the European Central Bank for their bailout loan cuts their long term debt load by 0.4% of GDP. But, every 10% reduction in unsecured, unguaranteed bank debt equals 1.3% of…

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