ECB Chief Jean-Claude Trichet Will Be Sitting On His Hands For A Long, Long Time

trichet euro ecb

It wasn’t long ago that we thought Ben Bernanke and ECB chief Jean-Claude Trichet were playing a high-stakes game of chicken.

Who would blink first? Who would raise rates, and send the other’s currency tanking?

The market — obviously — figured Trichet had the upper hand.

Wrong.

With Ireland, Greece, and Spain all the subject of serious sovereign default concerns, and with Austria now nationalizing banks, the idea of a rate-hike seems utterly laughable. Add in the fact that the continent’s manufacturing base was screaming bloody murder over all the jobs moving to the US, and you’ve got a recipe for a long, long period of low itnerest rates.

And that explains why the dollar is on such a tear.

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