The European inflation rate is “calculated using the weighted average of the Harmonised Index of Consumer Price [HICP] aggregates” according to TradingEconomics.com. That is a fancy way of saying the things people pay for, including the things they need on a daily basis.
Here is the dreaded deflation (of consumer prices) that Europe is fighting. Like the US before it, Europe is operating on a plan that would boost inflation (i.e. the effects of inflation) higher so that people participating in the financialized economy can benefit from rising equities (as we first projected in Q4 2014) and the regular people can, well… get screwed (USA style).
Welcome to the European ‘me too’ QE play!
Yesterday the Euro boinked our target of 105 [1.04935] and all seems to be going according to plan.
But the play (dollar bull, euro bear) is getting extreme now. Extremes can persist but they are what they are, defined as “reaching a high or the highest degree; very great”.
Let’s just assume the extremes have not yet reached the highest degree. That does not mean the risk vs. reward to a stance in line with current trends is not extreme. It is. Time is the thing. Trend followers who momo mature trends and go on autopilot always get burned.
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