"Our staff told us this month that the real economy could be a little bit better, in average, in 2009 and 2010 than what had been projected three months ago – 0.5 % higher for each year.
1- But is means that 2009 will remain very negative and 2010 perhaps only very slightly positive, as an average. I don’t exclude that we could observe positive growth, quarter on quarter, at the level of the euro area as a whole, before mid 2010. But this doesn’t change our main message.
2- Namely, that we have a bumpy road ahead and that the level of uncertainty remains exceptionally high and therefore that prudence and caution are of essence.
3- Now much depend on us, on our capacity to reintroduce confidence in the financial and real economy decision making processes, in the households as well as in the corporate sector. It is what the ECB and the Eurosystem want to do: preserve confidence, inspire confidence, remain a solid anchor of confidence. "
So that was the message from the ECB president, Mr Trichet...the only person that has good track record and inspire confidence...
So the message is clear, we averted a total collapse (by firing up the whole set of measure and stimulus) in order to have a disastrous 2009 and a no growth scenario for 2010.
After that it is X, the unknown ... no possibility to launch any measures and just wait.
At the same time, cross fingers, touch wood and optionnaly read kauppalehti for subliminal messages...
Having said that...at some point there will be a price to pay for saving the financial system (that was past feed by greed)...like the Incas..one will need to be sacrificed ...the poor, the young and the ederly through a ravaging inflation/stagflation..but that is tomorrow battle..maybe in 3-5 years time...in the meantime, deflation is advancing and getting stronger day by day