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Claus Vistesen » Comments » CEE

  • Communication at the ECB: Lost at Sea? [View article]
    "tell me more of the "principle of falsification." this interests me"

    Well, this is how it goes ... (in my opinion). I am arguing that some economies will be perpetually stuck in deflation on the back of this which means that global monetary policy won't go back to "normal". These economies would be (in the first instance);

    Japan
    Spain
    Key economies in Eastern Europe
    (possibly) Germany

    Basically, I think that we may be fighting (the prospect of) deflation for much longer than we are currently willing to admit and that more countries will now be dependent on exports to achieve growth. This can easily be falsified I think since if we get domestically induced inflation in the economies above (i.e. demand pull inflation) and strong domestic demand growth I will be wrong. Of course, headline inflation will live a life of its own and stagflation is not off the table yet.

    Claus
    May 02 03:35 am |Rating: 0 0 |Link to Comment
  • This Weekend's EU Summit Lacked Proper Teeth [View article]
    Hi Mad(...),

    You are bang on with most of your points; especially this.

    "Germany has the smallest loan exposure, but has the most to lose, with 25% of its exports headed east."

    The thing is, you have no idea of how many people did not see this coming because they simply did not bother to look at the real exposure Germany has to the CEE in terms of exports. Actually I would think that the 25% you mention understate the actual exposure since on the margin the growth in German exports have been primarily driven by growth in the CEE (well I would imagine, I don't know).

    "It looks like the headlines in Europe are about to get uncharacteristically sensational."

    Well, let us hope that the sensations will be in terms of historical measures taken to avert the crisis rather than the sensations you are implicitly referring to. I mean, I have not lost hope here. In particular, I would emphasise the measures to let the currency board economies into the Eurozone.

    Yet, I agree wholeheartedly with the SA editor's re-write of my headline ... it lacked teeth. Let us hope it will have more bite next time they meet.

    Claus
    Mar 02 16:28 pm |Rating: 0 0 |Link to Comment
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