Thursday, September 8, 2011

Trichet Joins the 'Let's Inflate' Crowd

European Central Bank President Jean-Claude Trichet said threats to the euro region have worsened and inflation risks have eased, giving officials the option to take further action should the debt crisis worsen, reports Bloomberg.

The economy faces “particularly high uncertainty and intensified downside risks,” Trichet also said at a press conference in Frankfurt following the ECB's monetary policy meeting.

The remarks resulted in the yield on German 10-year bunds falling to a record low of 1.828%.

Unless there is a major new crisis before November 1, always a possibility in the current eurozone, Trichet is merely easing the way for Mario Draghi to cut rates once he takes over as ECB president on 11-1-11. Then the ECB will get in step with the serious money printing going on by the Federal Reserve, and it will for the first time ever be pretty close to mad money printing on a global level.

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