The following letter has gone to the president of the European Central Bank:
Dear Mr Trichet
What does the ECB plan to do to address effectively the most severe recession in the countries of the eurozone for more than three decades?
Your financial system languishes in intensive care with little prospect of restorative medicine in the foreseeable future, business confidence is plunging, and unemployment is rising so fast it can be said to be out of control.
Only the fall in inflationary pressures offers any real mitigation. But even that may prove to be a hostage to fortune if the injection of new money beyond the growth of wealth stores up huge inflationary pressures for the future.
What is the ECB's strategy now?
Ashley Mote
An Afterthought:
One of the most obvious points about economies seems to be lost on all those fulminating about the current state of the world's finances. It especially applies to possible UK membership of the eurozone, which is why, perhaps, it gets ignored by the FT in particular.
It is simply this: when national economies are out of kilter, they can help one another to stabilise. A booming economy buys more from a fragile one, and the currency differences tend to stabilise both.
Bear in mind, also, that currencies are not just a means of exchange. They are a store of wealth and a measure of collective assets.
When the US was in the doldrums two decades ago, the then booming Japanese economy baled them out by buying more. The internet boom developed on its coat-tails.
Both sides benefitted, although the Japanese then over-stretched themselves and went too far the other way. But that was an error of political management, not of economics.
That's why the trend towards globalisation and huge economic blocks is so dangerous, as we are seeing now. There is no great powerhouse elsewhere to drag the rest of us back on our feet.
We need more diverse economic activity, and more currencies doing there own thing, not less.
But political correctness says otherwise, however dangerous it is.
The headlong rush to globalise everything is a road to disaster.
Dear Mr Trichet
What does the ECB plan to do to address effectively the most severe recession in the countries of the eurozone for more than three decades?
Your financial system languishes in intensive care with little prospect of restorative medicine in the foreseeable future, business confidence is plunging, and unemployment is rising so fast it can be said to be out of control.
Only the fall in inflationary pressures offers any real mitigation. But even that may prove to be a hostage to fortune if the injection of new money beyond the growth of wealth stores up huge inflationary pressures for the future.
What is the ECB's strategy now?
Ashley Mote
An Afterthought:
One of the most obvious points about economies seems to be lost on all those fulminating about the current state of the world's finances. It especially applies to possible UK membership of the eurozone, which is why, perhaps, it gets ignored by the FT in particular.
It is simply this: when national economies are out of kilter, they can help one another to stabilise. A booming economy buys more from a fragile one, and the currency differences tend to stabilise both.
Bear in mind, also, that currencies are not just a means of exchange. They are a store of wealth and a measure of collective assets.
When the US was in the doldrums two decades ago, the then booming Japanese economy baled them out by buying more. The internet boom developed on its coat-tails.
Both sides benefitted, although the Japanese then over-stretched themselves and went too far the other way. But that was an error of political management, not of economics.
That's why the trend towards globalisation and huge economic blocks is so dangerous, as we are seeing now. There is no great powerhouse elsewhere to drag the rest of us back on our feet.
We need more diverse economic activity, and more currencies doing there own thing, not less.
But political correctness says otherwise, however dangerous it is.
The headlong rush to globalise everything is a road to disaster.
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