The eurozone is just one negative shock away from deflation

www.cnbc.com...

www.moneynews.com...

Germany should have quit the euro zone to help boost its indebted counterparts in the currency union, according to billionaire investor George Soros, who discussed the future of Europe at an event in London on Wednesday.

"(This is) endangering the European Union from what it is meant to be, namely a voluntary association," he said. "(It's changed into) something that is radically different, into a creditor debtor relationship."[

Meanwhile, Financial Times columnist Martin Wolf says the eurozone faces a high risk of deflation.

In the year through February, eurozone inflation totaled 0.8 percent. "This is hardly close to 2 percent," the European Central Bank's target, Wolf writes. "It is also highly dangerous. . . .
he eurozone is just one negative shock away from deflation

If you are wondering why deflation would be such a bad thing








What do in house economists think how the whole Ukraine crisis and Sanctions threat on Russia will effect Europe ?

reply to post by maddy21


Egads! The euro isn't decreasing in value fast enough, if we aren't careful it could actually become more valuable!

Oh the humanity!

Solution to deflation: PRINT PRINT PRINT

Solution to inflation: STOP EFFING PRINTING


There, I just solved the world's financial problems.

When is this happening? I need a new guitar, today would be great.
But seriously, Germany would never quit the idea of an united Europe, after what we did and stuff, you know... We earn about half of what we got before the euro was invented and you won't hear us complain (very loudly). Germany and France are the beating center of Europe and trust me, there is still a lot of room for things to get worse. South-Italy has still children working instead of going to school. And if I remember correctly, there were discussions about how a big crash would be necessary to create a real balance between the involved economies. So the problem is: they try to drag this out, way too long.

The fall is coming, it shall start in UK, PIIGS, France and then USA before infecting worldwide.

Hey, thats what my channeling partner said.
Go Oz and Gold!

reply to post by maddy21


That one negative shock might very well come in 5 days... on 18th of march, when the GCC rules whether or not the ECB's OMT (Outright Monetary Transactions) is compatible with German law... and it is not.

The ECB is engaging in fiscal instead of strictly monetary policy with the OMT... which makes it illegal (violate German law) and invalid (beyond the ECB mandate and against our treaties), and the GCC will judge accordingly and might very well blow up the €urozone.

**ETA: Also, this is no conspiracy. This is real... but no one cares.

Well, while my money is still worth something, I am buying, mostly food, and seeds, plus rain butts, clothing, toilet paper!
Something else to think about, I once read that, since 1945, money has lost 50% of its value every eight years, from auto and house prices, I think that is about right.

I need to leave the UK before it turns into that scary police state I always see in movies and in comics. Being on an island kinda sucks when the government realises nature built them the best prison ever.

greencmp
reply to post by maddy21

 

Egads! The euro isn't decreasing in value fast enough, if we aren't careful it could actually become more valuable!

Oh the humanity!

Banks like FED/IMF cannot destroy money in Ponzi schemes if you have deflation instead of infaltion. This means that people in fact are getting the value of their work but the ponzi scheme falls apart since money is being drained from the system and in the end no money exists in the system only debt.

Bellor
I need to leave the UK before it turns into that scary police state I always see in movies and in comics. Being on an island kinda sucks when the government realises nature built them the best prison ever.

It's either that or start studying how to build a rickety raft out of any junk that comes to hand. Look at the bright side - the channel between the UK and France isn't as wide as the waters between the islands and Florida.

Several MSM sources are playing up the possibility of a quantitative easing type response to the Eurozone deflation threat.

I read it first in Arab news.

www.arabnews.com...

Now Bloomberg is picking up the story.

www.bloombergview.com...

This has serious implications such as lower interest rates in Europe and a stronger US dollar.
Also gives the US Federal reserve bank some leeway to take a turn later and lower interest rates if a slowdown occurs in the US.