
Dollar Gains on Euro and Sterling
At $1.0943 per euro on March 14th, the dollar stood at its strongest against the European currency since April 2019.

At $1.0943 per euro on March 14th, the dollar stood at its strongest against the European currency since April 2019.

Interest rates in the euro zone remained low through January, the European Central Bank reported on March 3rd. Loans by commercial banks to non-financial corporations averaged an annualized rate of 1.43%, the same as in October last year and only marginally up from November (1.39%) and December (1.36%). The average interest rate on loans to […]

Any major monetary expansion causes inflation. This past year, a combination of domestic restrictions on economic activity, speculation in the headwind of uncertainty, and the overall nature of energy markets, created inflationary pressure where under normal economic circumstances none would have existed.

The ECB has thus far stayed committed to low, steady interest rates. But there is growing anticipation of a rate increase by the ECB during 2022.

The ceremony, honoring Lagarde’s distinction for her “contribution to the renown of France” took place in the winter garden of the Élysée Palace. The event fuelled speculation as to what Macron’s intentions may be.

Reflecting concerns for continued high inflation, a survey of professional forecasters published by the ECB showed a considerable 1.1 percentage-point rise in expected euro-zone inflation for the first quarter of 2022.

The euro itself is only part of the failure. An entire structure of government institutions, laws, and even constitutional provisions were erected around it in order to secure its success. It all looked impressive two decades ago; today, the structure itself, from the European Central Bank (ECB), to the so-called Stability and Growth Pact, is a package of sordid evidence that even under democratic governments, central economic planning is a bad idea.

The common currency was a gigantic economic experiment, an application of political preferences rather than the product of sound scholarly research. As is always the case with grand government plans, for every problem they solve a new one is created.

Spanish political life will polarize around those offering policies that have straightforwardly led to present difficulties, and those whose program has promised to drastically reduce a state whose regional level is notoriously hypertrophic and reindustrializing the country. VOX is the most obviously poised to take advantage of this.

Central banks are recognizing that their own sustained monetary expansion has now awoken the sleeping giant of inflation. The goal now is to avoid trapping us in the same protracted inflation period we experienced 40 years ago.