The financial world is back on a familiar precipice: A giant
global-regional economy is on a cusp, all waiting to see if its
government will intervene. This time it ain’t us — it’s Europe, again —
the shock waves for the moment beneficial to the U.S.
Mortgages are on their 2014 lows, near 4 percent, taken down by the U.S. 10-year T-note now 2.31 percent, itself taken down by a new low on the German 10-year, 0.845 percent. One more inch down and long-term U.S. rates can fall another quarter-point quickly. Not a prediction, but a middling probability.
The immediate push toward this edge has been a new European recession, this time including Germany. Euro foolishness has been clear for several years, poor-productivity nations bolted to the uber-productive German hive and its Deutsche-gelt standard.
The others so love having German money in their wallets that they’ll tolerate 50 percent youth unemployment and German demands to adopt German behavior.
In return, Germany has done everything possible to ruin the experiment: It runs a trade surplus more than 6 percent of GDP (double the treaty maximum), and has this year balanced its budget.
The gap between U.S. performance and the outside world has never been greater — not since World War II. Not after the war, in it. Prices of imported goods fell a half-percent just last month. Commodity prices have tanked. U.S. inflation is going down, not up.
Watch Europe for now, not this sit-and-shake Fed. If Europe does not save itself, our Fed can be right back in deflation-fighting.
Read more: Gathering storm overseas taking mortgage rates down | Inman News
Mortgages are on their 2014 lows, near 4 percent, taken down by the U.S. 10-year T-note now 2.31 percent, itself taken down by a new low on the German 10-year, 0.845 percent. One more inch down and long-term U.S. rates can fall another quarter-point quickly. Not a prediction, but a middling probability.
The immediate push toward this edge has been a new European recession, this time including Germany. Euro foolishness has been clear for several years, poor-productivity nations bolted to the uber-productive German hive and its Deutsche-gelt standard.
The others so love having German money in their wallets that they’ll tolerate 50 percent youth unemployment and German demands to adopt German behavior.
In return, Germany has done everything possible to ruin the experiment: It runs a trade surplus more than 6 percent of GDP (double the treaty maximum), and has this year balanced its budget.
The gap between U.S. performance and the outside world has never been greater — not since World War II. Not after the war, in it. Prices of imported goods fell a half-percent just last month. Commodity prices have tanked. U.S. inflation is going down, not up.
Watch Europe for now, not this sit-and-shake Fed. If Europe does not save itself, our Fed can be right back in deflation-fighting.
Read more: Gathering storm overseas taking mortgage rates down | Inman News
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