Saturday, October 04, 2003

It Takes a Fool to Spot One, I Suppose

With Chief economists like this who needs a court jester. I mean what is he talking about. The US has growth of between 3 and 4% and Greenspan is firm on holding rates down for a considerable period. The eurozone is still more-or-less in recession, may be coming out, or may be going in deeper, and Otmar Issing is talking about raising rates. Brad often sounds off about the incompetence of some of the people running things in the US, he should come over and take a look at just who exactly we have running things here. My vote for what it's worth is that the rates should be down more.

The European Central Bank's chief economist on Wednesday warned that interest rates could soon rise in the eurozone if money supply growth started to drive up prices. Otmar Issing's comments came as a rise in purchasing managers' data for manufacturing boosted hopes of an upturn across Europe. Speaking in Zurich Mr Issing, one of the ECB's leading policymakers and a renowned anti-inflation hawk, said money supply growth might become a problem when the recovery started. "We are watching M3 [the broad measure of money supply developments] closely," he said. Economists said the timing of his remarks, just hours before the ECB's rate-setting meeting in Lisbon today, was puzzling. The ECB is expected to hold rates steady at 2 per cent, a postwar low. Neville Hill of Credit Suisse First Boston said that it was "an odd moment" to be concerned about money supply growth as the eurozone economy was only just beginning to show signs of life.
Source: Financial Times

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