Friday, November 14, 2014

Last week Mario Draghi, President of the ECB, said that the central bank’s Governing Council would “closely monitor and continuously assess the appropriateness of its monetary policy stance”, noting that this could change if the outlook for inflation worsened.
Luigi Speranza, an analyst at BNP Paribas, said that the survey’s findings signalled “that investors have started to have doubts on the ECB’s resolve or ability to push inflation back”.
He suggested that the ECB's analysis of risks from low inflation must be "flashing amber, if not red".
Prices rose by just 0.4pc in the year to October, edging up from 0.3pc in the preceding month.
The survey "challenges the ECB's credibility and its commitment to achieve its mandate, and as such, increases the pressure for additional monetary policy easing, in the form of full-blown quantitative easing", Mr Speranza said. .. Mr Draghi has previously warned that inflation must not permanently fall below 1pc "and thus into the danger zone".   Analysts also slashed their forecasts for eurozone growth for every year from 2014 to 2016, cutting their estimates for 2015 from 1.5pc to 1.2pc. 
The euro area as a whole may have entered its third technical recession since the financial crisis in the third quarter of this year.  The ECB wrote that "the balance of risks has become more clearly titled to the downside", as respondents noted geopolotical tensions in Ukraine, Russia, and the Middle East as posing risks to the euro area... I have been spouting for a while that surely credibility in the €Z/ECB must be osmosing away and Louie Hope agrees - an Italian working for a French bank, I presume. 'Luigi Speranza, an analyst at BNP Paribas, said that the survey’s findings
signaled “that investors have started to have doubts on the ECB’s resolve or ability to push inflation back”.  He suggested that the ECB's analysis of risks from low inflation must be "flashing amber, if not red"'   But I bet EU Daltonism continues, not because Mario is being obdurate because the arsenal is totally empty apart from 'Cypressing'....And here I was thinking low inflation was good. Silly me, I should know that inflation erodes debt. To savers and those on fixed incomes though its a disaster because it forces interest rates to be low. Thats good for borrowers, who can hike up their indebtedness beyond their ability to pay it back. So at some point in the future the governments can tax the savers to bail out the reckless borowers, who also happen to be the government as well. So thats all right, as this government has given itself the powers to just empty my bank accounts at will, with out having to get any judicial approval or prove I am guilty of anything. A savings tax and Ihvae control over it. 

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