With several of its member states in trouble, how long is it before the ECB goes into full-on printing money mode?
A few months ago there was talk that its chief Jean-Claude Trichet might actually beat Bernanke out of the gate and start raising rates again, but that was when the conventional wisdom was that the dollar was doomed and the Euro was the new dollar.
Now everything’s turned around (perception-wise), as Bernanke is normalizing, and the ECB is dealing with the reality that several of its member countries are in recessions, and desperately need cheaper money.
SocGen’s Albert Edwards has been warning of global competitive devaluations for sometime, so when is it going to happen? When does the ECB start printing like crazy, and in the process call Bernanke’s bluff (just watch the dollar soar when it becomes apparent how divergent the central banks on the opposite sides of the Atlantic have become)?
Spring, summer… what’s your guess?