Reports of the survival of the eurozone may have been greatly exaggerated

Just when you thought it was safe to go back into the water… Last week’s surprise interest rate cut by the European Central Bank(ECB) may have been taken as good news by the markets, but it was largely a response to the looming danger of deflation in the eurozone. And that is not good news at all.

It is a severe problem of economic forecasting that if you manage to identify a major force that is going to have significant effects, you are rarely able to see quite when these will occur. You can give up, retire or die before the forecast events finally come to pass.

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