Comments on: Airbus complains about the dollar http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/ Conservative Party Member of Parliament for Wokingham Sat, 05 Jul 2008 15:47:32 +0000 http://wordpress.org/?v=2.5.1 By: David Whelbourn http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-13433 David Whelbourn Tue, 27 Nov 2007 16:43:22 +0000 http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-13433 Well here comes the stress in the Eurozone. I always said that the real test for the EURO will come when Germany starts to recover. By the Eurozone interest rate has been pretty neutral apart from the effect on Ireland has escaped notice on what a low interest rate has done to their economy and home ownership because it is one of those small side countries in Europe. Now those interest rates are starting to rise in Eurozone, watch the housing market in Ireland! Well here comes the stress in the Eurozone. I always said that the real test for the EURO will come when Germany starts to recover.

By the Eurozone interest rate has been pretty neutral apart from the effect on Ireland has escaped notice on what a low interest rate has done to their economy and home ownership because it is one of those small side countries in Europe. Now those interest rates are starting to rise in Eurozone, watch the housing market in Ireland!

]]> By: mikestallard http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-13059 mikestallard Sat, 24 Nov 2007 19:41:00 +0000 http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-13059 I've just been on holiday to the USA - lovely - everything half price! Meanwhile, I observe, everything possible is being done by this incompetent government to resuscitate inflation. I’ve just been on holiday to the USA - lovely - everything half price!
Meanwhile, I observe, everything possible is being done by this incompetent government to resuscitate inflation.

]]> By: anononeumouse http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-13057 anononeumouse Sat, 24 Nov 2007 19:29:41 +0000 http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-13057 Makes you wonder why the price of petrol is going up at the pumps ( Makes you wonder why the price of petrol is going up at the pumps (

]]> By: Tony Makara http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-12938 Tony Makara Fri, 23 Nov 2007 17:00:25 +0000 http://www.johnredwoodsdiary.com/2007/11/23/airbus-complains-about-the-dollar/#comment-12938 President Sarkozy has certainly expressed his concern that the Euro is overvalued to chancellor Merkel and there is great concern growing in Europe over the ever-widening disparity between the Euro and the Dollar. I am worried that the US is about to open the door to inflation while at the same time the European economies will stagnate. Both need to reverse economic policy but in a measured way. John, what do you consider to be the ideal rate of interest, say, 3 to 6% over inflation? Reply: The real rate of interest needed will vary depending on the state of the cycle. If the economy is overheating and there is no spare capacity we would need a higher rate than if things are cooling and there is spare capacity. The long run rate will be around the rate of growth of productivity - which seems to have fallen from 2.5% to 2% under this government.I think we need to be in slowdown fighting mode now - inflation will subside next year. President Sarkozy has certainly expressed his concern that the Euro is overvalued to chancellor Merkel and there is great concern growing in Europe over the ever-widening disparity between the Euro and the Dollar. I am worried that the US is about to open the door to inflation while at the same time the European economies will stagnate. Both need to reverse economic policy but in a measured way. John, what do you consider to be the ideal rate of interest, say, 3 to 6% over inflation?

Reply: The real rate of interest needed will vary depending on the state of the cycle. If the economy is overheating and there is no spare capacity we would need a higher rate than if things are cooling and there is spare capacity. The long run rate will be around the rate of growth of productivity - which seems to have fallen from 2.5% to 2% under this government.I think we need to be in slowdown fighting mode now - inflation will subside next year.

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