Monday, November 4, 2013

Breaking News: Incompetent ECB is Shocked At Its Own Incompetence

Forgive me, that was cutting, but this is just too much. Last Friday, there was an article in the Washington Post that began with the following sentence:
"On top of high unemployment and sluggish growth, the European Central Bank has a new headache: an unexpected drop in inflation."
Seriously? The drop in inflation was "unexpected?" On the one hand, you've got most Eurozone countries adopting one form of austerity or another--in the case of Greece or Spain, quite severe cuts, while in Germany the cuts are more modest. On the other hand, you've got a staggeringly incompetent central bank that has repeatedly refused to take any additional steps to ease monetary policy in the face of falling inflation and sky-high unemployment

So how this comes as a surprise to anyone is really beyond me. In fact, it should have been all too predictable. Now all that remains is to see if the ECB is actually willing to do something about it. So far, European officials have lulled themselves into complacency since the most immediate crisis was staved off last year. But the real crisis is still very much alive and well, and they ignore it at their (and Europe's) peril.