Ok fascinating to me at least. Not only did the European Central Bank hold rates steady, some members wanted to see an increase due to rising inflation. How dare they. We could always send the US team on "inflation measurement" on a trip abroad to teach them how it's all how you measure. And just like that you can make your country's inflation disappear. Then you can cut rates to help bail the USA out, since your inflation problem is done with. Wait, we solved our credit problems this afternoon in Washington. All gone. So we don't need Fed cuts here either. Wait, no we do need cuts. Wait... ok I am just confused. Whose on first?
Look, even Argentina has figured out the US methodology of inflation measurement - it's simple - tell the people there is no inflation, and inflation will go poof! Magic! Except umm... apparently the people of Argentina are not believing it. Well who said we don't export things in the US - we export measurements of inflation.
- Argentine first lady and presidential candidate Cristina Fernandez de Kirchner defended the accuracy of the government's official inflation data on Monday, while shopkeepers and consumers boycott tomatoes over soaring prices.
As Argentines prepare for presidential elections on October 28, analysts, consumer groups and opposition politicians contend that data reported by the INDEC national statistics agency is about half the actual inflation rate.
"Under no circumstance is the inflation rate what the opposition says. It's the INDEC rate," Fernandez told Argentine business leaders at a lunch gathering, adding that inflation was "more than reasonable" for an economy growing more than 8 percent per year since 2003.
The government expects consumer prices to rise less than 10 percent in 2007, similar to 2006, but critics say actual inflation is as high as 20 percent.
Anyhow back with that insurgent ECB (if you don't stand with our Fed, you stand against it!)
- The European Central Bank left interest rates unchanged as policy makers weigh the risks of accelerating inflation against signs of slowing economic growth. The ECB kept the benchmark refinancing rate at 4 percent today, as predicted by all 62 economists surveyed by Bloomberg News. ``Some'' members in the 19-member Governing Council voted for an increase, President Jean-Claude Trichet said.
Soaring food and energy prices have pushed inflation to the highest in more than six years, just as an appreciating euro and higher credit costs threaten to slow economic growth in the 13- nation euro region. The ECB today raised its inflation forecast for next year and signaled concern that workers would ask for more pay to compensate higher costs. (I believe that's called stagflation; thankfully in the USA we do NOT have inflation - therefore we only have a recession)
Trichet said today the ECB expects inflation to remain ``significantly'' above 2 percent in coming months before ``moderating somewhat in the course of 2008.'' In November, inflation accelerated to 3 percent, exceeding the ECB's limit for a third straight month.
The ECB shelved a planned rate increase in September and has since kept rates on hold after the U.S. housing recession made banks reluctant to lend, driving up the cost of credit. While the ECB has offered banks extra cash to encourage lending, the cost of borrowing in euros for three months jumped to a seven-year high this week.
Not that we have inflation, but I am just saying in theory...
Long 'freedom fighters' such as ECB!