Video

Kim Cramer Larsson
Areas covered in this webinar by Saxo Bank technical analyst Kim Cramer Larsson include EURUSD, USDJPY, GBPUSD, EURGBP, gold, silver, S&P 500, the Nasdaq, the Dax, the FTSE and the Dow Jones.
Squawk / 08 March 2018 at 12:52 GMT
Head of FX Strategy / Saxo Bank
Denmark
ECB statement drops the easing bias, sees euro firming in kneejerk reaction. The following sentence from the prior ECB policy statement: “If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the asset purchase programme (APP) in terms of size and/or duration”.

That elimination appears to remove the ECB's intention to grow QE if inflation doesn't arrive - and the implication is that it doesn't believe expanded QE would get it where it wants on inflation anyway. The language leaving a "soft" September deadline for ending QE purchases (soft because they reserve right to extend if necessary) remains unchanged.

Draghi presser up shortly at 1430 CE
08 March
Jim Earls Jim Earls
What is inflation? True monetary inflation is the debasement of money. In this case, there is merely credit inflation. The question is why there is the necessity for any inflation-be it in the form of credit or monetary-there can not be real economic growth minus all forms of inflation?
08 March
fxtime fxtime
Jim you are correct. well said. The benefit of inflation however in a measured arean say 2% inflation permits the devaluation of debt over time to keep the credit cycle fueled. Hardly sound economic policy I know but government debt devaluation is beneficial however small.
08 March
Jim Earls Jim Earls
Well thanks-however, in reality long-term devaluation has merely resulted in the further necessity to perpetually increase debt to the point of reaching the dangerous critical mass area of 80%+ Debt:GDP ratios around the world. Production-trade-savings should ultimately be providing the source of credit to avoid the inevitable economic imbalances that result from a system solely dependent on increasing levels of debt.
08 March
Carletto Carletto
Jim, you would be right if there was a base to debase. Cash isn't convertible to anything. It's value is more ephemeral. Its lies more in its cross border acceptability and its circulation is a delicate balance which central banks need to achieve. Of course overprinting will lead to inflation (see Zimbabwe), but underprinting will cause recession and social unrest.
08 March
Jim Earls Jim Earls
You can not convert your cash to real physical Gold-Silver-Platinum?
08 March
Carletto Carletto
You can buy it. But not convert it. What I think Jim was refering to, is a physical standard as opposed to a fiat currency.

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