And Here We Go Again ...

OK, OK ... maybe when you have been watching, reporting about and dissecting monetary policy for as many years as I have (yes, I AM every bit as old as I look!), EVERY central banker speech sounds like something you´ve heard before - the simple reason being that you HAVE ...

Of course, every banker´s, analyst´s, self-declared monetary policy expert´s snotty criticism along the lines of "how can they be so stupid?" or "Have they completely lost the plot?" definitely IS something you´ve heard before -- and far more often than you care to remember. The real eye-exasperatingly-towards-heaven-roller, however, isn´t that you´ve heard all the more or less obvious arguments against rate hikes and monetary tightening before. No, it´s that the vast majority of all those expert advice offering bankers, fund managers, high-tech-investment engineers, analysts and economists ... well, how can I put it without it sounding tooooooooooo snotty on my part? ..... Well, to put it biblically: If your slate is clean, you can throw stones, eh?

So why are bankers, analysts (generally working AT banks), ECB watchers (ditto) etc. all baying for lax monetary policy? Because they want to save the economy? .... Ah, what a romantic notion! Because they want to save their jobs. Because ONE major crisis we do have: a banking crisis. Banks and bankers didn´t do their homework, weren´t following the same rules of solid business practices as they are always recommending so easily to everybody else.

And now they hold the rest of the economy -- and especially the central banks -- ransom: If you don´t give us the money we need at the rate we want, you´ll get yourselves a nasty credit crunch an a recession. So hands up and deliver!

European Central Bank President Jean-Claude Trichet
European Central Bank President Jean-Claude Trichet

But now there is an adamant little Frenchman, Jean-Claude Trichet, and his merry band of monetary lawmakers and they simply say: Nope. No can do. And now THEY are the bad guys ... Funny old world.

THEY - unlike many an investment banker or financial engineer out there ins subprime and market land - are doing their job ...

As a European consumer I can only say: Carry on, JC! I rely on you ... And I daresay, I´m not the only one.

Because, believe it or not, a series of opinion polls by the EU Commission has produced a not altogether surprising result: What are EU citizens most concerned about right now? - INFLATION!

Ciao for now!

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