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Will ze Germans finally calm down now?

Posted Tuesday, August 30, 2016 by
Skerdian Meta • 2 min read

To make it clear for anyone who doesn´t know, due to their accent, when the Germans say "the" it usually sounds like "ze" so the English usually use this when talking about anything German. Not to make a mockery of them or anything, it´s just harmless national humor. 

Jokes aside, the German regional inflation numbers are just coming out and they´re showing that the inflation took a dive last month. The inflation in Hesse only grew by 0.1% against 0.4% expected, while in Bavaria and North Rhine Westphalia it was expected to grow by 0.2% but remained flat. That´s not the worst though, in Bavaria the prices declined by 0.1% and in Brandenburg they declined by 0.3% which makes it deflation, although officially there should be two quarters of negative inflation to be considered deflation.

Do you remember a couple of years ago when ze Germans opposed the ECB (European Central Bank) QE programme with whatever means they could? They sent the ECB decision to the German constitutional court. What´s more dazing, is the fact that they still continue to fight it; they threatened to take to the court the additional QE steps that the ECB took this year. 

Imagine if the ECB didn´t start the QE programme, Germany would probably be in deflation for years now with the rest of the EU. The worrying thing is that the inflation is heading lower while the import prices are picking up. You don´t need to imagine what would happen if the imported inflation was negative.

Looks like German inflation doesn´t matter to the Euro

Yet, they stubbornly continue to oppose the ECB actions just because a certain political party came into power in the "30s due to hyperinflation. I guess the fear which has grown in the German national sub-conscience sometimes leads to irrational reasoning. The Euro seems uninterested as the EUR/USD forex pair keeps its tight trading range so far today. 

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