Double Bubble Trouble

[Dennis R Redmond]

Well, it's official: the ECB raised short-term interest rates to 3%,
despite flatlining inflation rates and 10% European-wide unemployment
(it's true that the EU economy is beginning to noticeably accelerate,
thanks to juicy EU subsidies to the semi-peripheries and a noticeable but
hesitant turn towards Eurokeynesianism). This isn't likely to slow down
the EU much, since EU inflation plus real growth is around 4.5% (meaning,
monetary policy is fairly easy), but things could get very, *very* ugly on
Wall Street over the next few weeks. The EU credit spigot is being slowly
tightened, which is bad news for be-bubbled overseas debtors like the US.

-- Dennis