Interest rates are falling

The current standard of discussion at AAM (my bold):

Noone was particularly quick to clarify this misunderstanding.

ETA link

some fairly blunt replies to this thread now I see

From a Pinster :wink:

Got a link?

But interest rates are definitely coming down … because german wages are increasing !

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Proof: German wages are increasing by 5%, this leads to
A complete erosion of big German Business profits, because they are already working on very tight margins, this leads to
More borrowing, but because of the Credit Squeeze and the Banks reluctance to extend extra credit at current interest rates (interest rates on the inter bank market is too high); there is added pressure on the ECB to Lower interest rates.

I knew that I would figure out your thought process, but did not think that I would arrive at the solution so quickly. I had visions of the FED and the Chinese Economy coming into the equation and possibly a hiker at Ayers Rock breaking a trig resulting in vibrations of the surrounding air etc.

Hi Mr_Anderson. First I’d like to thank you for your honesty and dedication to this site - you are one of my fav posters.
But I have to disagree with your post above and suspect that you might be taking the michael. Wage increases in Germany will most certainly not cause lower interest rates. The ECB are concerned with inflation and have been cribbing lately about wage inflation which would cause an inflation spiral effect (high prices = high wages = high prices…). The German wage agreement has been apparently lower than they expected, but nevertheless it’s an increase over inflation, so I see no change to interest rates, especially not down. My thoughts are: lower growth + higher prices\wages = no interest rate change.

2nz, Mr A was only taking the ‘Michael’ - as you put it. On the substantive point the Metal workers deal at 5.2% (4.5% net of once off items) is above the ECB secondary inflation threshold of 4%. With the likelihood of the metal workers deal placing a benchmark for other Eurozone agreements then the pressure is back on interest rates.

Well, nobody had taking him to task on this, or maybe I’m more techy today than normal…anyhoo, yep higher than inflation rise there and apparently there was fears that they wanted 8%

He was being ironic

Tough crowd. :cry:

Just for you 2nz.

No, its just good to see the gnarly bears back in the woods.

Grrrrrr :laughing: :laughing:

That chart is a bit misleading., it makes it look like the prices only dropped back a small amount compared to the increase. Where as if they dropped 50% then well over half the gains would be gone surely?

I was taking the michael.
Prior to being an estate agent, I was a stockbroker. :wink: