Tag Archives: eurozone

Consumer price inflation still refuses to surge; here is why

The snow has melted and it’s time to make plans for the future again. And like every spring, those plans are likely to include what has become known as “reflation” — inflation increasing again to a level where it can eat away at the mountain of debt the world’s big economies have to deal with.

Will consumer price inflation, rather than inflation in asset prices like property and securities, finally take off? There have been two interesting points of view last week on this issue.

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The first half of the year was full of humbling lessons

What a spectacular lesson the first half of the year delivered for investors. At the beginning of the year, it looked like the UK’s vote to leave the European Union was a great idea: the eurozone seemed on the brink of disintegration.

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Europe’s year of change depends on its voters

Beyond the depressing, backward-looking policies that the Brexit vote and the election of Donald Trump as US president seem to have brought, there is a ray of hope.

People elsewhere in Europe, seeing the first ugly consequences of populism, might find enough motivation to go to the polls in elections just to try to keep populists out of government. I am talking about the decent people who are tired of politicians but aren’t seduced by the populists’ siren calls.

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The UK’s own shaky currency union could give lessons to the eurozone

Among the analysts and politicians criticising the single European currency, perhaps the most numerous (and vocal) come from Britain.

This should be no surprise: the UK itself is a currency union, and those working within it should know a thing or two about why such a regime does not really work.

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Europe is too gloomy for its own good

“You see, no hope’s a dangerous thing.”

— W.A.S.P. “My Tortured Eyes”

Last year’s Brexit vote and the election of Donald Trump as president of the U.S. shook the world out of complacency and sent analysts and experts into a frenzy of attempts to explain what was behind these two events.

For Trump’s election there is the partial explanation of the Russian intervention. For Brexit, the fact that the tabloid newspapers have, for years, portrayed Eastern Europeans as benefit scroungers who at the same time “steal” jobs from the British may have played a role.

But what about the rest of Europe?

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In 2017, the ECB should learn to break the rules

This is going to be a crucial year for the European Union. There are more and more voices predicting its disintegration. With the political events that are ahead, it’s not a possibility that should be taken lightly.

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Bank of England independence is vital post-Brexit

After the vote by the British people to leave the European Union, we keep waiting for the adults to take control of the situation. If they did, this whole process would be much easier. They could sit down and discuss ways to proceed with the separation with minimum damage for both sides.

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This will be a ‘summer of shocks’ or a ‘summer of stocks’

As investors ponder whether to “sell in May and go away,” strategists say we’ll either see a “summer of stocks,” or a “summer of shocks.”

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Investors ‘front-run’ the ECB, rush to buy bonds

If anyone was looking for more proof of how central banks’ actions are distorting the markets, here it is: investors are trying to “front-run” the European Central Bank (ECB) – in the words of analysts at Bank of America Merrill Lynch — by buying investment grade bonds.

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ECB announcement breathes life into debt funds

The European Central Bank helped credit as an asset class, and of course corporate bonds within it, become attractive to investors again.

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