Lagarde’s inflation fight at ECB makes Fed’s job look simple

Bloomberg/Craig Stirling/9-4-2022

“That binary choice of either a half point or an unprecedented 75 basis points of monetary-policy tightening masks an ever-expanding litany of challenges for the president and her colleagues in Frankfurt as they manage a fragile currency area with a war raging next door.”

USAGOLD note: The Telegraph’s Ambrose Evans-Pritchard summed up Lagarde’s dilemma neatly. “The European Central Bank can either bail out Italy,” he says, “or save its credibility in Germany. It will struggle to do both.” Likely, Lagarde, like Jerome Powell, will steer the middle course, and in so doing, further undermine the credibility of the euro. There might come a point when Germany seriously considers its place in the European Union and whether or not it might be in its best interest to resurrect the Deutschmark.

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