Inflation (and ECB Rate Cut?)

In the moment, everybody in germany is talkin' about prices skyrockin'.

(Like, the price for milk doubled in a year or so).

But, on the other side, i hear people discussin seriously, if ecb will cute

rates in spring.

So, what's your opinion? Can we expect a rate cute from the ecb?

Price skyrocketing in Germany? I thought it was just Russia. Does that mean it will cost more to buy a BMW soon?

If price is skyrocketing, doesn't it mean they will have to raise rate to combat rising price?

From what i know if the price going-up (inflation), the government prints more money and usually they will cut rate. On the other hand, if the government more in debt, they will not cut the rate.

Sorry for my poor english.

Correct me if i'm wrong.

the lluminati dream of ecb wont let them cut rates.
they just wanna position the euro as world most powerful stable and valuable currency so then they can enjoy benefits like free oil, free debt and other stuff usa can do now.

just havent you notice how all their scandal screaming about the euro current value dissapeared with just some private reunions they did?
if there is inflation now, blame the dollar, usa deficit and Bush wars.

Interesting when people say, "BUSH WARS"; as if the Untied States doesn't have the right to defend itself....

Well that ends this thread.

~X~

I will take time to correct you, the opposite is true. When rates are low it means that there is more money in circulation in an economy. THis is often one source of inflation (there can be others), but cutting a rate even lower would only increase the money supply even more and create a bigger rate of inflation.

So to cut inflation, they increase intrest rates.

A quick note, lets not go off topic and bring up derisive political topics.

It would be great if this thread can continue, as it has great potential.

Thanks

Thanks for the correction .

Well, i think politic has a big influence on exchange rate. The US is on war
an i think, it eats up around 1 % of their GDP. That would mean, they would
require lower interest rates. However, they pushed it up till almost 5%.

Just my2cents.

Where have we been? Oh, interest rates, well

i think, for a cut speaks that
- a lot of people in spain have loans with floatin' interest rates (similiar to the US)
- France is highly in dept (more!, based on GDP, than the US).
- A lot of banks have americans mortgages in their Books. Even if they are
fullfilled, they get worthless when the usd keeps on divin'.
- with the us cuttin' interest rates, a lot of products from the us become
cheaper what puts a limit to inflation in europe.

however, there are signs for a rate hike, as there is

- Inflation close to 3% in Germany (the limit the ecb will accept (but for whole Europe!) is 2%, as they said before
- Germanys state budget will be almost balanced (probably in plus a few
thousand euros).
- In some parts of Europe, like Daenemark, Austria, Netherlands the percentage
of workless people is now under! 5%
- If the ecb wants the euro to take over the part, the usd used to play, they've gotta make sure it's worth is steady. They don't have a long history
like the usd, where they can expect people to base their trust on. They have in all case seem to be reliable.


Any comments?

Well we the 13th country within the eu zone has exceeded the muust inflation wanted by the ECB, and have now above 3%, I think its 3.45 %, but not per year base, so we might still catch up,...they are now fighting it actively,..prices are skyroketing,....bread, and evrything has gon up,...rate cut,...no way,...thats not how u fight inflation,....i read an overview of inflation per each eu country, and i think the Spain was way ahead from evrybody it was at 3, ...germany was at 2, but that was information from 10 month ago, so things might change,...but i dont think the german has 3%,...ok. portugal close to 3 thats more likely....so i vote no for rate cut,...especally if 2,3 countries have inflation close to 3, and none of them has inflation way below 2,..thats my 2 cents,...and others??

it's clear that EU fights an inflation wave now, so I don't see any rate-cut any soon.

Ps. even if inflation persist over time and ECB decides a rate-increase, this doesn't necesary means a euro skydiving to 2 dollars. Currency rates can be influence thru monetary and fiscal politics, not just thru interest rate.

To be really honest, I have no clue :-)
A lot can change between now and bring in the world of the financial markets.