Five Things You Need to Know: Stagflation

[jk]

chinese curse

i quote that saying often: peak oil?, gold, global warming, terrorism, hurricanes, incompetant governments, iran, iraq, central asia, china, pipelines, trade, debt, russian natural gas, latin american politics, education and its discontents, etc, etc.

so many fascinating events, trends and possibilities with so much room for mischief and disaster. frankly, i fear for the future of my children and the world they will live in.

[WDCRob]

First, thank you Bart. I appreciate the lengthy reply. And understood most of it. It seems to me that Bernake faces an awful lot of personal pressure to raise rates and prove himself. And Bush is only a political factor for another year or so, which could relieve the Fed of some pressure. At least until 2009.

but the mentions of france in the discussion above refer to a putative decision to drop interest interest rates. m. trichet works at the ecb, and france's bank doesn't control rates.

EJ has mentioned France as likely to be the first to break out of inflation-fighting mode and cut rates. I'm in no position to argue either way since I don't fully understand why he thinks that.

My guess was that they aren't AS dependent on the US economy and face greater than normal domestic political pressures to make the general population feel good, even if they are gutting them in the long run. YMMV

[jk]

france's monetary policy

First, thank you Bart. I appreciate the lengthy reply. And understood most of it. It seems to me that Bernake faces an awful lot of personal pressure to raise rates and prove himself. And Bush is only a political factor for another year or so, which could relieve the Fed of some pressure. At least until 2009.



EJ has mentioned France as likely to be the first to break out of inflation-fighting mode and cut rates. I'm in no position to argue either way since I don't fully understand why he thinks that.

My guess was that they aren't AS dependent on the US economy and face greater than normal domestic political pressures to make the general population feel good, even if they are gutting them in the long run. YMMV

france does not have a monetary policy. rates are set by the ecb [european central bank]. france does have a fiscal policy, as do each of the eurozone members. but it doesn't set its own interest rates.

[bart]

First, thank you Bart. I appreciate the lengthy reply. And understood most of it. It seems to me that Bernake faces an awful lot of personal pressure to raise rates and prove himself. And Bush is only a political factor for another year or so, which could relieve the Fed of some pressure. At least until 2009.



EJ has mentioned France as likely to be the first to break out of inflation-fighting mode and cut rates. I'm in no position to argue either way since I don't fully understand why he thinks that.

My guess was that they aren't AS dependent on the US economy and face greater than normal domestic political pressures to make the general population feel good, even if they are gutting them in the long run. YMMV

My pleasure WDCRob, and feel free to ask any questions on areas that were not clear. I may not have an answer, but I'll sure offer an opinion... ;)

I sure don't mean to imply that I have all the answers either, nor have I deeply studied the ECB & France's relationship... but I am reasonably certain (to address jk's point) that the Maastricht treaty does allow for independent actions of the various central banks if and when the Euro area inflation rate gets out of the agreed upon range. That upper range is 2% if memory serves, and its above that now.

And YMMV is certainly the watch word - there are so many counter forces in place today that I'm mostly on the side and only making short term trades.

[Jim Nickerson]

"YMMV" = Watchword?

Is there a glossary for all these abbreviations that keep appearing? I do not understand them.

Thanks.

[jk]

fwiw

jim, try:

http://searchsmb.techtarget.com/gDef...211776,00.html

[Jim Nickerson]

Vmmy ?

jim, try:

http://searchsmb.techtarget.com/gDef...211776,00.html

Thanks, jk, but it is not there.

Do you personally know what it means without going to the trouble to look it up?

[bart]

Is there a glossary for all these abbreviations that keep appearing? I do not understand them.

Thanks.

Sorry - just ask away on any of them. I try to avoid them for that reason but also have no clue if someone doesn't know what they mean.

ECB = European Central Bank
YMMV = Your Mileage May Vary

There's also:
http://www.acronymfinder.com/ that may help.