Daily Pfennig: Eurozone Inflation Falls To .3%
caseyresearch.com / Chuck Butler / September 30, 2014
In This Issue.
* Dollar is back in charge.
* Euro gets whacked on inflation news.
* Is Commodity Bull Run over?
* Bears Stearns revisited.
And Now. Today’s A Pfennig For Your Thoughts.
Eurozone Inflation Falls To .3%…
Good Day! . And a Tom Terrific Tuesday to you! Monday was a day without baseball. UGH! Yes, I know at the end of Rocktober, baseball will be over for this year, so I had better get used to it. But I don’t want to get used to it! And yes, I’m whining just like a 3-year old. I don’t want to take a nap, I don’t want to take a nap! Funny, how that changes as I grow older. Now, it’s “I want to take a nap, I want to take a nap”! HA! The local weather-person told me last night that it’s been 19 days without rain here. Of course that’s small shakes compared with California and their drought. Oh well, I know we need rain, but I truly enjoy these umbrella blue skies, full of sunshine and warm temps!
The rain is falling on the euro this morning. And no, the rain isn’t going to help it grow! Instead its melting the euro away, just like the Wicked Witch of the West when she met up with a bucket full of water thrown on her by Dorothy in my all-time fave movie. Yesterday, the euro was attempting to add to its value throughout the day, which seemed strange to me, given that there’s all this uncertainty of what the European Central Bank (ECB) meeting this Thursday is going to bring hanging over the euro like the Sword of Damocles.
But it was what it was, I guess. However this morning, the euro is getting whacked, as the other currencies seem to be holding ground. The September estimate of Eurozone inflation printed this morning, and Consumer inflation slipped further to .3% from last month’s .4%… This is going to put ECB President, Draghi in a foul mood, folks, and who knows what kind of temper tantrum he’s going to throw when seeing this, but I’ve got a secret. Do you want to know a secret? Do you promise not to tell? Oh, that’s OK, go ahead and tell whomever you care to tell. Chuck is going out on a limb here and saying this right here, right now, that this will be the cyclical low for Consumer inflation in the Eurozone. So, there’s no need to go hog-wild on stimulus, Mario.
But I’ve come to the conclusion that he probably will go hog-wild in announcing stimulus measures to up the ante of inflation in the Eurozone. And that’s what has the euro on the slippery slope this morning. Here in the U.S. we don’t have that problem, yet. that is. because right now, Consumers are willing to go deeper into debt and spend, spend, spend. Yeah that’s right go buy that $85,000 car and finance it out 84 months! Don’t get me started on how the average monthly car payment in the U.S. is now nearly $500 which, many of us, remember when our house payments were not $500!
