8th April 2011
"The eurozone formally committed itself to a two-speed economy on Thursday after the central bank raised interest rates on the same day Portugal joined Ireland and Greece in officially requesting a bail-out."
gresham comments: "As Greece, Ireland and now Portugal have gone down the monetary tubes is it not time the centimo dropped with our glorious leaders that the whole monetary union fiasco is just that. It don't work and it ain't ever going to work. How many people across Europe have to suffer from the political dogma of these idiots."
"The European Central Bank on Thursday became the first monetary authority in a major developed economy to raise interest rates since the global financial crisis struck-a sign that the long period of extraordinarily easy credit is beginning to come to a close."
JAMES WRIGHT writes:" Inflation caused by rising energy prices cannot be tamed by raising interest rates. This inflation is demand-pull inflation. Prices for commodities rise because sufficient quantities of the commodities are not being produced. The deficient supply of energy is a direct result of government policies that limit the use of abundant resource (coal, oil, nuclear and natural gas) supplies. The other source of inflation is from expanding money supply in excess of GDP growth. That occurs because governments stifle the growth of the private secure (excessive regulation, tax rates,) and fund welfare programs (transfers of wealth from the productive to the non productive) buy borrowing or printing money.