The wage-price spiral is now underway in core Europe as German wages are on the rise. The ECB will surely act as it has no other choice with inflation now the dominant economic concern across the Eurozone.
Today, German daily Der Spiegel has highlighted that German wages are rising at a rate not seen since [...]

Oil prices aren’t high because of greedy oil companies or backstabbing middle eastern countries. Oil prices are high because of easy money. That is the message of David Uren in today’s Australian. I subscribe to his view but add in peak oil as yet another factor.
Uren says:

THE price of oil is unlikely [...]

Mervyn King correctly assessed inflation risks to be temporary and the downside to come from the real economy. It sounds like he is not hawkish. Chances of a rate cut are down now. I believe the BoE wants some inflation to help do the dirty work of reducing the huge debt [...]

Below is the inside scoop according to famed Washington insider Robert Novak (It remains to be seen whether his sources are reliable). At the bottom is a link to an article from the Telegraph quoting Morgan Stanley’s economic team suggesting the Fed and the ECB may be working at cross purposes.
The Fed’s Rates Dilemma
By [...]

No! The Fed is not crazy. Market participants are forgetting that the U.S. economy is still not out of the woods. Moreover, many financial institutions are drowning in writedowns. None of this should be expected to change anytime soon. Yet, the market now expects the Fed to actually raise rates. [...]

It has been my assertion for some time that writedowns and the attendant unraveling of the financial system is the most troubling problem during this credit crisis. This process is deflationary by its very nature because credit contracts. Ambrose Evans-Pritchard at the Telegraph has written a great article highlighting just this fact. [...]

Today, the Home Builders Federation came out to ask Mervyn King and the BoE to cut rates 50 beeps. The Telegraph reports:
Housebuilders are urging the Bank of England to cut interest rates when it makes its monthly decision tomorrow, warning that the market is slowing at a faster rate than it did during the [...]

Global financial institutions are deleveraging because they can’t build enough equity capital any other way except by going to Asian and Middle Eastern sovereign wealth funds, cap in hand. So, the Fed and the Bank of England (BoE) have both cut interest rates. Yet, LIBOR remains stubbornly high. The TED spread is [...]

The term deleveraging is one bandied about a lot in the press recently. But, what does it actually mean? De-leveraging is the process by which financial institutions and investors reduce the relative size of their assets to equity ratio. Generally, it means shedding assets in the financial sector, thus reducing credit and [...]

Caroline Baum was asking in her column today: “How can a 2 percent funds rate be appropriately calibrated to promote moderating inflation when inflation is currently rising at almost 4 percent?” The answer: it can’t. The Fed is all about easy money.
Look, we have a huge debt problem in this country. Have [...]