European Central Bank Chief Trichet downplays deflation risk.

The ECB officials continue the nonsense talk about recovery, “negative inflation” and no deflation, while their own actions prove that they are working frantically to reflate the collapsing credit. That is deflation by definition. Also, note that the Sweden’s Central Bank cut its intereste rate in a “surprise” step. The deflation panick is spreading. The Eurozone officials are in denial, but deflation will not be denied.

Eurozone interest rate stays put as expected

July 02, 2009. Euronews.

The European Central Bank has kept its interest rates at the current record low of one percent.

The Governing Council was in Luxembourg for one of its two annual meetings outside of Frankfurt.

ECB president Jean-Claude Trichet said that he was not overly concerned about falling prices, which he said would be “short-lived.”

“The fall of annual inflation rates into negative territory in June is in line with previous expectations and reflects mainly temporary effects,” he said.

The ECB also announced its 60 billion-euro company bond-buying scheme would start next Monday. Last week it lent banks almost half a trillion euros to get them lending to their customers again.

Meanwhile, Sweden’s central bank took the surprise step of cutting its key interest rate from 0.5 percent to 0.25 percent. It has never been lower.

Despite some evidence of Swedes’ consumer confidence stabilising, demand remains low and the Riksbank said that the severity of the slowdown meant the rate cut was necessary.


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