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well, if production capacity utilization has substantial slack then prices
are under pressure, margins are under pressure and stock price mutiples are
under pressure.
the only way to pressure the eurolanders to move rates down is to devalue
the dollar thereby pressuring their domestic prices... and guess what? its
going down.
but then the beggar thy neighbor rounds of devaluation comes in and we are
in the viciuos circle. It's not looking good
> > -------- Original Message --------
> > From: Stephen Roach <Stephen.Roach@xxxxxxxxxxxxxxxxx>
> > Subject: Global Economic Forum: Global
> > Resent-From: globalecon@xxxxxx
> > To: globalecon <globalecon@xxxxxx>
> >
> > Battle of the Central Banks
> >
> > It's hard to figure. The Federal Reserve just eased by 50 bp, slashing
> > its overnight lending to 1.25%. The European Central Bank did the
> > opposite. It held its policy rate steady at 3.25%, fully 200 bp above
> > the Fed's new target. Of course, there's no hard rule that requires
> > central banks to follow the same script. But since both institutions
> > are inflation targeters, this divergence is puzzling. That's especially
> > the case if you believe, as I do, that pricing is increasingly
> > determined in the same global marketplace that Euroland and the United
> > States have in common. Who's got is right?
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