The talk of Greece leaving the euro area – Grexit – is back. Will Grexit actually happen? I don’t know, but I do know that more and more people worry that it will in fact happen.
This is what Google Trends is telling us about Google searches for “Grexit“:
And guess what? While this is happening euro zone inflation expectations have collapsed. In fact this week 5-year German inflation expectations turned negative! This mean that the fixed income markets now expect German inflation to be negative for the next five years!
It is hard to find any better arguments for massive quantitative easing within a rule-based framework in the euro zone (with or without Greece). And this is how it should be done.
PS it has been argued recently that euro zone bond yields have declined because the markets are pricing in QE from the ECB. Well, if…
View original post 69 more words
Utopia, you are standing in it! 
Recent Comments