Ecomentary.com provides this archive of postings dating from 2011 dating back to 2001, as a resource. Due to the nature of dated material on the internet, we do not guarantee that hyperlinks are current.
May 12, 2010
Who’s On First? To be able to quote both Churchill and Marx in the same Ecomentary must seem quixotic at best…but what could be more quixotic then the reversal by the leaders of the ECB who swore not so long ago that they would “never” use the ECB to buy out the failing sovereign debt of some States who refused to abide by the ‘fiscal rules’ of the EMU. That was, of course, when the house wasn’t burning down. By last Sunday, it was either put out the fire or let the House that the Treaty of Rome built burn down. They lowered their colors and made a quick turnabout. At the end of the day, the Europeans became Lincolnesque and decided to save their Union, for better or for worse. more…
May 08, 2010
Disequilibrium and Disorder The frantic behavior over this week of virtually all markets including currencies, fixed income and equities betrays awkward similarities with the events of 2008. There is a difference, however, this time. The relevant policy authorities in Europe seem unable to marshal sufficient resolve to contend with these unruly markets. That inability resides in the flawed structure of the EU and the EMU, its monetary counterpart. As the European interbank market fragments and spreads blow out, even a flawed policy authority will be forced to confront the current meltdown. The key issues are timing and force. Surely, something significant is now in the cards…but whether it will be sufficient will depend upon markets regaining their trust in policy authorities. For that to happen a substantial show of resolve will be needed. more…
January 22, 2004
Euro Wreckage The doubts about the EU are growing despite the ascension of the Euro. Now, one of the major investment bank analysts, a European, has thrown down the gauntlet and proclaimed the Euro and its parent, the EMU a huge wreck. The fallacy of EMU was that it was supposed to occur as part of a top down process that created the necessary factor and product market flexibility necessary to sustain an Optimum Currency Area. That never happened, but EU policy operates as if it did. How long can the contradiction of a weak internal economy and an (overly) strong currency persist? more…
March 13, 2003
Facts on the Ground The acceleration of U.S. forces into the Middle East set off its own dynamic for both the Administration and its opposition. Is a war the only option, or does the existence of substantial forces in the region give Real Containment another chance? more…
August 24, 2001
The future course of European growth is murky but not as dreary as the worst estimates. What is lacking is enough momentum to help the U.S. much in the short run. more…
May 31, 2001
The ECB is struggling to cope with the slowdown in the European economy while staying on course in its unique experiment in institution-building. The ECB must steer between the adaptability required for successful institution-building, and a course that aligns it with its primary mandate of price stability. Can it accomplish a dual mission? more…
May 12, 2001
The ECB gave us a new perspective today on ‘credibility.’ Dr. Duisenberg took his cue from Humpty Dumpty more…
April 26, 2001
European Macro:? Bubba Rides Again…
- “Monetary policy is no instrument of cyclical economic policymaking,”
- “The ECB differs fundamentally from the U.S. central bank, the Fed, in terms of its task and strategy.”
- “In Europe we have a clear focus on a macroeconomic goal: the stability of the value of money. Price stability is the primary goal for the ECB.”
- “The ECB could never argue in the way the Fed did in justifying its most recent rate cuts, by citing markets and the economy.”
- “The upward risks are not as big as they were a few months ago but they have not disappeared.”
Ernst Welteke, Bundesbank President – April 25,2001 quoted in Die Zeit more…