German joys of inflation
 

Economy just gained strength again - and already is in danger to get set back again seriously.

http://www.spiegel.de/international/...521607,00.html

It should be noted that inflation becomes a problem in most of the euro-zone currently. In Spain it has reached 4.1%. Raising of prices in the Euro-zone was from 0.6% to 3.3%. Also we see first signs that although economy still grow - unemployment also turns for rising again. In spain they expect an economical growth of 3.8% this year. But their unemployment is growing since four months in a row, by 2.2% ovber this period of time.

By tendency, comparable developements can be seen in many european countries.

The burden of many foul spanish credits, a pratcice that compares a bit to the mortgage crisis in the US, is not even seen by many. But it could make the ECB to decide that protecting the fading power of economic growth is a pruiority before proetecting currency stability, making them not raising interest rates.

Which means more inflation.

I expect a downturn in the economies worldwide in '08. Things are sort of in the middle right now though, not heading north or south.

-S