Wednesday, January 23, 2008

Silver And Gold

The Irish Independent, none of whose owners or staff have any vested interest in the property market at all, claimed today that '[h]omeowners are poised to benefit from the first cuts in interest rates for four-and-a-half years, as a direct result of global stock market turmoil', which is an interesting attitude to take to a potential world recession.

Anyway that notion was knocked on the head even before most people would have had a chance to read the paper. Why would anyone be surprised? The only weapon against inflation is higher interest rates, and inflation is way too high in Europe. The Indo tries to cover itself with the frankly ridiculous statement that '[t]he European Central Bank (ECB) is expected to begin cutting rates as soon as April'. That's some definition of 'soon', considering the Fed reacted to a stock plunge in a matter of hours.

We'll see.
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