Last Thursday, it turned out that not even Mario Draghi is able to string out the foreign exchange market. However hard he stressed that the ECB is far from planning to reign things in, the euro only got stronger. During the press conference the currency added no less than one and a half cents to reach $ 1.2537, which is one-fifth more expensive than it was a year ago.
Draghi had to do something about that advance, but in the eyes of the traders he has failed. What ‘divine’ intervention they had expected is not clear to me. I think he could not have sounded more dovish.
Meanwhile, it’s unclear which forces are behind the euro appreciation. The ECB is still printing money, while the Fed has long stopped doing so and has been on the path of interest rate hikes for quite some time now. According to the law of supply and demand, more euros in the system and less dollars mean that the ‘greenback’ has to rise. Lees verder
Great news for Calvinists last week. On Monday the Dutch Ministry of Finance announced that the Dutch State wants to raise just € 50.5 billion this year, almost € 9 billion less than a year ago. And on Thursday the German federation of taxpayers pointed out that for the first time in over two decades Germany’s ‘debt clock’ is running backwards.
President Reiner Holznagel of the ‘Bund der Steuerzahler’ changes his ‘Schuldenuhr’ Photo: Reuters
Debt is bad and must be repaid, people in the Northwest of Europe love to say. ‘Fortunately, the policy that is at the expense of the younger generations has finally stopped’, president Reiner Holznagel of the taxpayers’ federation stated enthusiastically standing in front of his head quarter in Berlin.
A mile to the south of the German city, the think tank DIW is situated. I think it would be worthwhile if Holznagel takes the time to walk down there to talk to director Marcel Fratzscher. Lees verder