by John Galt
June 14, 2012 19:30 ET
Tonight’s commentary and analysis by Mr. Pritchard via the U.K. Telegraph is another home run:
Dutch disease
The terrifying start of the article is enough to make this piece required reading because it compliments my earlier writings about Austria, Switzerland, etc. and the issues hitting those nations along with the idiocy of the EU/ECB policymakers:
As if matters were not bad enough already in Euroland:
Dutch retail sales collapsed by 11pc in April, even worse than the 9.7pc drop in Spain. (Royal holidays cannot explain this).
As you can see from today’s chart by Lombard Street Research, it is a sight to behold.
Charles Dumas from Lombard says the results of Europe’s “fiscal suicide pact” are becoming all too clear.
This is not contagion from Greece or any such nonsense. It is the result of the eurozone’s destructive policy mix.
All three levers of EMU policy are set on contraction simultaneously.
Monetary policy is too tight (Nomura has just called for a rate cut, €500bn in QE, and massive intervention to cap Italian and Spanish bond yields).
Bank deleveraging to meet the EU’s 9pc core Tier 1 capital targets by July has become absurd. It is pro-cyclical. It is causing a credit crunch and a contraction of the EMU money supply. The architects of this policy are a danger to the world.
I STRONGLY advise everyone to click on the link at the title and read the remainder from the Telegraph immediately. Events are moving as fast if not faster than they did in August to October of 2008 and this time the Central Banksters will have little if any impact on world economies with their pathetic games.
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