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  • ECB's Holzmann: The Inflation Surge Is Largely Transient

Added at 4:37am

Or so they HOPE!

Just look at all those adjectives: "largely", "transient", "likely", "Slow", "beginning". .........Really????

How "largely"?
How "transient"?
How "slow"?
How "beginning"?

And for all this academic acumen at the ECB, this gentleman is paid what? ....while real workers are out on the street?

And meanwhile, continued progress.........
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Sure Mr. Holzmann, Gold in euros costs now only 400% more as 2002!
Yeah been saying that since inflation sneaked above 1% for the first time. Now its I dont know how much and the mantra is still the same. It could be right but when that time comes all non-asset owners have become significantly poorer. Sadly enough.

Bundesbank has another view on the economic situation expecting inflation significantly above 3% for a longer period.

I am not convinced ECB knows what it is doing. In my book the negative interest was a huge never-tried-before experiment. It could have worked for a short period of time to boost investment etc. but it has been going on for a decade and consequences are now so big that they dont have any idea as how to roll it back in without causing massive market movements and significant losses among private savers who were forced into investing in stock due to negative or 0 interest in the banks. It want be the huge financial institutions losing on this but the orivate savers that maybe check their account once a month.
Sorry Mr. Holzmann but you are WRONG!

Here in the USA they stopped saying transitory because they are full of crap I guess it just takes you European folks a little longer to catch up.

First you are wrong about lockdowns - don't work but you're doing it again!
Second you are wrong about transitory inflation - Please explain how a business that pays 30% of it's overhead in payrolls can reduce that figure, especially now that the same business needs employees and it can't find any!

Stop throwing more and more euros at the problem. Turn off the printing presses
Quoting fxsport
Sorry Mr. Holzmann but you are WRONG! Here in the USA they stopped saying transitory because they are full of crap I guess it just takes you European folks a little longer to catch up. First you are wrong about lockdowns - don't work but you're doing it again! Second you are wrong about transitory inflation - Please explain how a business that pays 30% of it's overhead in payrolls can reduce that figure, especially now that the same business needs employees and it can't find any! Stop throwing more and more euros at the problem. Turn off the printing...
If you pay the same next year inflation is zero. Thats how well-educated economics thinks. But of course you are still 30% down.
Quoting fxsport
Sorry Mr. Holzmann but you are WRONG! Here in the USA they stopped saying transitory because they are full of crap I guess it just takes you European folks a little longer to catch up. First you are wrong about lockdowns - don't work but you're doing it again! Second you are wrong about transitory inflation - Please explain how a business that pays 30% of it's overhead in payrolls can reduce that figure, especially now that the same business needs employees and it can't find any! Stop throwing more and more euros at the problem. Turn off the printing...
Agree with most of the comments on this and the others in this chain, except for one. The idea that lockdowns do or don't work depend on what parameter or goal you have. If you have a health service overrun and people 'dying on the streets', it's not a good look and likely to end with political consequences far greater than the pain of a lockdown, which would have even greater economic consequences. If you take a more hard-hearted line, you could argue that just killing off all the old and vulnerable is an acceptable culling but good luck with selling that. I am not advocating any particular approach as it needs to suit the circumstances of the many variables in that particular location.. It's a balance and a political decision. Democratic Governments' unspoken contract with its constituency is to protect its citizens from all dangers, particularly those that end in loss of life. If a large proportion of citizens have little regard for the safety of others and rate their own interests above everyone else's, or are just plain ignorant about how to take responsibility, it makes the consequences for the government much harder to deal with and even more likely to result in an unsatisfactory result, whichever way they go. It's not always the governments fault in a democracy, when people want the good bits but wash their hands of the bad. Personal responsibilty is becoming an extinct characteristic.
Quoting DaJoWaBa
{quote} Agree with most of the comments on this and the others in this chain, except for one. The idea that lockdowns do or don't work depend on what parameter or goal you have. If you have a health service overrun and people 'dying on the streets', it's not a good look and likely to end with political consequences far greater than the pain of a lockdown, which would have even greater economic consequences. If you take a more hard-hearted line, you could argue that just killing off all the old and vulnerable is an acceptable culling but good luck...
With regards to lockdowns:

1. When the local hospitals are at capacity and overwhelmed then it is permissible.

2. While total cases is increasing the hospitalization rate is down and fatalities even lower.

3. Dealing with Covid-19 should have been a scientific based program; instead it has become a political means of controlling a population thru fear.
Quoting fxsport
{quote} With regards to lockdowns: 1. When the local hospitals are at capacity and overwhelmed then it is permissible. 2. While total cases is increasing the hospitalization rate is down and fatalities even lower. 3. Dealing with Covid-19 should have been a scientific based program; instead it has become a political means of controlling a population thru fear.
#1: We agree on that parameter, then. But it would be a good idea to act before that happens, otherwise it becomes inevitable in populations with less than the required herd immunity ratio. As you say, it should be based on a scientific model.
#2: I'd urge you to check the stats on a per capita basis and the rate curve gradient.
#3: I agree leaning heavily on the science is a very good idea. But science has no answer for emotion or politics. It's a political decision, using as much science-based fact as possible that is called for. I'm not convinced by the last sentence because it's subjective and potentially prejudicial.
Happy trading.
[quote=Banditten;13799377]
"consequences are now so big that they dont have any idea as how to roll it back in without causing massive market movements and significant losses"
Spot on Band Japan couldn't find the "economic climate" to reverse out of the low rate trap into which it moved THREE DECADES ago. And during that time there have been enough clever kiddies gone through the banking machine over there but none have found a solution.
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