Tag Archive: ECB

ECB Measures Background: How to Reduce German Competitiveness and Talk down the Euro

2014-06-06

In our view, the ECB measures of June 2014 want to increase German lending, spending, salaries and inflation. Finally they target a reduction of German competitiveness. The ECB wanted to talk down the euro but will not succeed. We explain why the measure are bullish for the euro. We expect EUR/USD of 1.40 in the … Continue...

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The ECB interventions in the year 2000

euro trade-weighted index vs ecb verbal and actual intervention

Fundamentals,FX,Gold and CHF:Week November 18 to November 22

2013-11-23

by George Dorgan

2013-11-23

FX Price Movements November 11 to November 15 2013

Fundamentals with highest importance: The HSBC Flash Purchasing Manager Index (PMI) for China weakened from 50.8 to 50.4. In particular, new export orders, output prices and employment started to decrease again, while output increased. The preliminary Markit manufacturing PMI for the United States edged up to 54.3 (vs. 52.3 expected), a 9-month high after the …

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Fundamentals,FX,Gold and CHF:Week November 11 to November 15

2013-11-16

by George Dorgan

2013-11-16

Fundamentals with highest importance: In Janet Yellen’s hearing at the Senate Banking Commission, the future Fed chair emphasized the need to provide support to the economic recovery and to overcome low inflation. Her speech supported equities, gold and US Treasuries. GDP in the Euro zone rose by 0.1% QoQ in line with expectations, but less …

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Fundamentals,FX,Gold and CHF: Week November 4 to November 8

2013-11-09

by George Dorgan

2013-11-09

November 4 to November 8 Weekly FX Rates

Fundamentals with highest importance: The U.S. GDP release for Q3, showed that despite the recent U.S. critique with Germany, the Americans are trying to follow the successful Germans: for the first time since Q1/2012 and Q2/2011 exports rose more than imports. GDP was up 2.8%, but not driven by consumption, it was mostly helped by …

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Fundamentals,FX,Gold and CHF: Week October 28 to November 3

2013-11-02

by George Dorgan

2013-11-02

This week had a focus on – due to the government shut-down – the long awaited U.S. data: Highest importance: The ISM Manufacturing Purchasing Manager Index (PMI) for October came in at 56.4, higher than the 55 expected. The value for new orders and for production remained above 60 despite the government shutdown. The value …

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The European Transfer Union From North To South and from Poor to Rich between 1999 and 2007

cyprus, spain, italy, france, austria, portugal, germany, wealth europe in comparison

Cheap ECB rates and rising home prices helped to enrich Southern Europeans between 1999 and 2007. Germany's middle-class and poor, most of them not owning a home, were the ones that financed it.

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European Wealth Reports: Why “Median” Italians are Far Richer than Germans

Italy home sales business loans 2000-2012

We explain why according to the European wealth reports "median" Italians are more wealthy than Germans. The main reasons are high savings and accumulation of wealth for the average family until the 1990s, often invested in homes and real estate. Low ECB interest rates finally let the value of the home rise strongly.

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The Big Swiss Faustian Bargain: Differences between SNB, ECB and Fed Money Printing Explained

Potential losses due to money printing are for the Fed: 1.2% of GDP, Bundesbank: 5% of GDP, SNB: 12% of GDP.

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Ways to the Northern Euro

Two ways for building the Northern euro, exit of Southern members or slow creation of Northern euro with currency interventions of central banks.

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Because They Knew What They Were Doing: The Parallels between European and SNB Leaders

Similarly as European leaders knew what they were doing with the euro, namely introducing a not feasible currency, Swiss National Bank did between 2005 and 2008, namely the absolutely wrong thing.

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The Fairy Tale of Rising Competitiveness in the European Periphery

2012-12-17

by George Dorgan

2012-12-17

In our post we look on two questions concerning competitiveness for the European periphery: When will local production be cheaper than imported products? Do people have the money to buy these local products? It does not help reducing labor costs if local production costs still more than imported products. The second aspect is: even if …

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Definitions of money supply in the context of the SNB

Monetary Aggregates according SNB M0 M1 M2 M3

Euro Morons: Hyperinflation Successfully Avoided, Stagflation Successfully Created

2012-12-01

by George Dorgan

2012-12-01

Keeping Greece in euro zone, eurocrats or better “euro morons” have successfully avoided a weak drachma and a following Greek hyperinflation. Instead they successfully created stagflation. Currently European HICP inflation is at 2.5%, far above the max. 2.0% official ECB mandate, but the euro is becoming weaker and weaker. German salaries are rising with 2.6% …

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The Eurozone crisis between euro-morons and zombie-bankers

Falling Unit Labour Costs, but Rising Production Prices in the Periphery. Is this Competitiveness?

2012-11-17

by George Dorgan

2012-11-17

Currently European HICP inflation is at 2.5%, far above the 2.0% official ECB mandate, but the euro is becoming weaker and weaker. German salaries are rising with 2.6% per year. At the same time, the ECB cannot hike interest rates, because it wants to provide cheap money to the periphery. The periphery continues to buy German products, even …

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Did the SNB Front-Run ECB Decisions Far Ahead of Hedge Funds?

2012-10-30

by George Dorgan

2012-10-30

We think that the Swiss National Bank invested far more in Italian and Spanish bonds than analysts like Standard and Poor’s expected and was able to front-run ECB decisions. This new style of hedge funds, formerly called “central banks”, can refinance at zero percent and is able to show a lot better performance than the …

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SNB Monetary Data Week October 26

2012-10-29

by George Dorgan

2012-10-29

Seasonal effects, the good months for the SNB and the US economy, but weaker ones for emerging markets and Switzerland Despite the seasonal effects between October and March, the SNB is not able to sell currency reserves consistently. Traditionally the USD gets stronger and stocks rise over the autumn months till January. This year’s stocks appreciation was possibly already anticipated …

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SNB Monetary Data Week October 19

2012-10-22

by George Dorgan

2012-10-22

Seasonal effects, the good months for the SNB and the US economy, but weaker ones for emerging markets and Switzerland Given that the seasonal effects between October to March have started, the SNB might be able to sell some currency reserves. Traditionally both the USD gets stronger and stocks rise over the autumn months till January. This year’s stocks appreciation was …

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SNB Monetary Data Week October 12

2012-10-15

by George Dorgan

2012-10-15

Seasonal effects, the good months for the SNB and the US economy, but weaker ones for emerging markets and Switzerland, have started Given that the seasonal effects between October to March have started, the SNB might be able to sell some currency reserves. Traditionally both the USD gets stronger and stocks rise over the autumn months till January. This year’s stocks …

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