The ECB

The impact of the actions of monetary policy on the real economy will be newly towards early 2010 (hard to do before). Do you can think that towards the second half of the 2009 rates reference interest both in the eurozone and in England and, of course, from USA?UU. do and Japan, can match on neutral territory? It seems difficult to thinking mainly about the ECB, but now it is a possibility to consider. And if the ECB continues cutting interest rates do one can interpret it as a sign of indiscipline in the inflationary control away from that goal in search of shoring up the economy? Probably that would not be the signal that should be done since the ECB has given clear of even samples exceed the restrictive monetary policy with the aim of controlling inflation. The correct interpretation would be that the ECB would be giving a clear signal that the crisis is more severe that pose even the most pessimistic.

Beyond speculations about the possibility of further cuts in the interest rates, and whereas they will have an impact of little significance in the economies, it is necessary to consider whether these monetary policy decisions involve some kind of risk. In the short term, these cuts in interest rates, are not of risk both for the British economy and the eurozone. But generate risks for the possibility of not conveniently done in time, the reversal of the downward cycle of fees. Probably these risks need to be more concerned to the BOE to the ECB since the latter has made cuts in the interest rate against their will with which the minor sign of recovery of the eurozone economy, terminating the cycle of cuts and immediately begin the growing cycle of fees. The BOE for its part, which should stimulate one economy hit than that of the eurozone and with a banking system in more serious trouble, probably take more account in reversing the policy of rates, stimulating thus inflationary pressures and the generation of speculative bubbles in the price of financial assets. The interest rate cuts do not solve the problems of the economies and increase the risks to future.

Central banks should have worked in a more direct and active manner in the recomposition of the credit to the private sector. Meanwhile, economies continue to deteriorate without finding even a floor to the crisis. And when each time output is more distant, we must do the following question are central banks planting the seeds of the next crisis? This question is no less if we remember that the present crisis was preceded by a cycle of low interest rates, originated in American monetary policy that sought to lift the economy from a much less serious than the present recessionary situation.