LONDON (MarketWatch) -- European Central Bank President Jean-Claude Trichet on Thursday said risks to price developments in the 17-nation euro zone are on the "upside" and that "strong vigilance" is warranted. The euro jumped in the wake of the remarks to trade at $1.3944 versus the dollar, a gain of 0.6%. The ECB earlier Thursday announced it had left its key lending rate unchanged at 1%, as expected. Trichet said risks to price developments are tied to rising prices for energy and other raw materials. http://www.marketwatch.com/story/trichet-strong-vigilance-warranted-on-prices-2011-03-03 The wording "strong vigilance" was in the past Trichet´s hidden message for the markets for an imminent interest rate increase.
trichet is doing the same thing he did in 2007-2008. he knew the economic backdrop was unstable (it's even more so with portugal, ireland, greece, spain, etc..but that's irrelevant) yet he knows that by blowing all this hot air about hikes, he'll drive up the euro and offer some bit of protection against oil and commodities priced in dollars. the fact that a stronger euro even makes it harder for the piigs to get out of their situation is irrelevant. die deutchen uber alles! if you look back at 2008, though, you'll see the exact same situation panning out.
I'm listening to this right now on bloomberg, pretty interesting, someone has to move rates, Bubble ben bernanke is oblivious to what is going on, ECB needs to fight inflation while Bubble ben bernanke thinks there is no inflation, just like his foolish ways thought there was no sub prime mortgage mess.
Forget about possible, this has to be done. Bubble ben bernanke is waiting and waiting and waiting, this economy is headed into another collapse as Bubble ben bernanke has no idea what to do but keep rates at historical lows.