Wednesday, July 02, 2008

It's time to raise interest rates

That's what Angela Merkel thinks. Mr. Sarkozy doesn't agree nor does anyone in Ireland, but let's face it, the Euro is Germany's baby. Germany is the biggest economy and the Germans as a people have a much greater fear of inflation than do other Europeans. So, even though the ECB is independent, I think Merkel is more likely to be happy this week than is Sarkozy (or Berlusconi or Zapatero or Cowen).

I still wonder how bad things will have to get here before people start demanding that we leave the Euro. Now that would be a drastic move, unlike voting 'No' to the Lisbon Treaty.

Years from now when people look back and ask what led to the "Celtic Tiger" the answer will be obvious to all: cheap oil, cheap credit and an undervalued currency. There'll be no drivel like our "well-educated workforce".