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Good News: The eurozone is just one negative shock away from deflation.

senheiser

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George Soros: Germany's Failure to Exit Eurozone 'Fulfilled My Worst Expectations'
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Wednesday, 12 Mar 2014 12:47 PM

  • CNBC.com reports.

    Germany's decision to stay in the eurozone "has fulfilled my worst expectations," Soros said. Now the region has little chance to recover and likely confronts an extended period of economic woe.

    "[This is] endangering the European Union from what it is meant to be, namely a voluntary association," he said. "[It has changed into] something that is radically different, into a creditor debtor relationship."

    Right now creditors hold the power, particularly Germany, Soros said. He said Europe has faced "a crisis of ignorance," as neither governments nor markets understood the problems well.

    But that is starting to change, Soros said. "The understanding of the issues is now catching up with reality. . . . It gives me hope."

    Meanwhile, Financial Times columnist Martin Wolf says the eurozone faces a high risk of deflation.

    In the year through February, eurozone inflation totaled 0.8 percent. "This is hardly close to 2 percent," the European Central Bank's target, Wolf writes. "It is also highly dangerous. . . .
    The eurozone is just one negative shock away from deflation."


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the eurozone has now 0.8% inflation and 0.25 % interest rates, what is the ECB gonna do if eurzone has 0% inflation or deflation? it only can remove 0.25% more they cant
 
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if prices decrease you wont spend money and save it,

Actually i would spend less money if prices would increase, not decrease. :lol:

demand for jobs and production goes under, people and the state who owe debt get hurt by deflation as well
True, but your graphs doesnt show a deflation, everything is allright if the Inflation stays aroud 1%.
 
Actually i would spend less money if prices would increase, not decrease. :lol:


True, but your graphs doesnt show a deflation, everything is allright if the Inflation stays aroud 1%.
but it keeps going down
 
euro-area-inflation-cpi.png


eurozone inflation decreases again and so does current gdp growth rate

euro-area-gdp-growth.png
 

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