Monday, 28 September 2009

So The ECB Has An Exit Strategy...

"It would be premature to declare the crisis over,” Trichet said. “Now is not the time” for the ECB to unwind its stimulus measures. “However, at some point in time an exit strategy will have to be implemented. The ECB has an exit strategy and stands ready to put it into action when the time comes."
And so here is my scenario in few "silver" bullet point in a random fashion...
  • The stock market rally extend until end of the year.... to fall to an historical low within the 2010-2011
  • End of 2011 the ECB exibit its exit strategy by increasing its interest rates by 8 fold within the following 12 months
  • The housing market collapses and reach a low in 2012
  • The Finnish parliament is dissolved at the turn of next year ...not because of election corruption but of incompetence and inability to deal with the current situation.

3 comments:

Anonymous said...

Thanks a lot for the sensible prediction.

I try to understand the prediction more. Here are a few questions:

"The stock market rally extend until end of the year.... to fall to an historical low within the 2010-2011"

-- Does this mean there will be a significant "profit" deflation and people's income deflation during 2010 to 2011?

"End of 2011 the ECB exhibit its exit strategy by increasing its interest rates by 8 fold within the following 12 months"

-- Does this mean that ECB will continue directly injecting huge amount of money into the banks and markets until sometime in 2011?

-- Does this mean there will be rather high inflation in EURO zone already by end of 2011?

-- Does this mean that ECB will be forced to increase interests drastically?

"The housing market collapses and reach a low in 2012"

-- Does this mean the housing market in Finland will be partly kept floating by the high inflation in 2010 and 2011, where people would put their money into housing market to prevent the loss caused by the high inflation?

---------- In brief, will we have a stagflation starting sometime in 2010?

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