Coelacanth

Will the European Central Bank Cut Rates - It’s Anybody's Guess

The ECB's Papademos got on the wires this morning and said they may have to raise rates if growth picks up or to quell a "wage price spiral". He's a known hawk and it's hard for me to imagine many currency traders (myself included) out there still believe the ECB will raise rates.

At the same time Papademos sounded the cauldron on inflation again this morning....German August reads for CPI came in well below consensus....suggestin... lower oil prices are easing some inflationary pressures. My take is that as growth continues to falter in the euro-zone and inflationary pressure continue to show evidence of easing.....the cacaphony of calls to lower rates from EU business leaders, politicians and consumers will only get louder.

It won't surprise me at all to see the ECB do an about face in the 1st two qtrs. of 09' and start cutting rates.

The U.S. Dollar: A New Accord

Striking isn't it? Since some others have already addressed it from a financial standpoint (which is just as easy for me to do by the by...) I'll offer something else to consider for those who are so ready to kill America and the dollar

If you haven't noticed by now....America appears to be on the precipice of re-inventing itself. They won't admit it, but Europeans sometimes resent our ability to do that.....makes them have to look at unpleasant sterotypes they hold about us like "America is run by stupid white men". Who's more progressive now? Far fewer minority faces in French media & politics compared to us.

America still spends more money on research and development than any other country on the planet and we have the finest universities in the world. Despite all the problems, and I agree there are many, the extreme doom & gloom almost appears chic and IMO is misplaced.