- "Since inflation measures the changes of weighted prices in a basket of goods and services, there is always one price that rises the fastest. But this is of course not the cause of inflation. We want to know what causes those prices to rise. Excessive global demand may be the next element in the chain, but something must have caused that too. At the end of the chain we find economic policies – some combination of undervalued exchange rates in some newly industrialised economies or excessively low interest rates. If that explanation were true, it would not be a bad start if the world’s 15 or 20 largest economies agreed to make exchange rates more flexible and to tighten global monetary policies."
- "In the euro area, I would expect a partial accommodation of higher inflation. The European Central Bank probably does not have the stomach for several further rate increases, which would be needed to get inflation back towards the target of “close to, but less than” 2 per cent. So there is a risk of a moderate, but permanent increase in inflationary expectations."
- "In large parts of the developing world, and in the US, I would expect much higher inflation to be tolerated. In particular, a large number of emerging economies will accept it as a price worth paying to maintain their unsustainable development strategies. Among them will be China. One of the possible consequences would be further volatility in global exchange rates and further upward pressure on the euro."
- "In the US, support for free trade has been falling for a long time, but in the end I would not expect the US to be the main driver of global protectionism, irrespective of who is the next president."

Americas Macro sector headlines

• Today 00:02am
  *(US) NOV MONSTER EMPLOYMENT INDEX: 143 V 150 M/M (The Nov 2007 reading was 183); The index is now at the lowest level since 2004- Only agriculture showed an increase in jobs in Nov and demand for more...
  
• Yesterday 11:15pm
  (JP) Japan extra bond sale bid to cover 2.87X v 3.23 prior- A total of ¥149.8B in 20-yr and 30-yr bonds were sold. - This was auction number 35.
  
• Yesterday 11:13pm
  (US) Secy. of State Rice calls for "robust" action from Pakistan govt against those responsible for Mumbai attack
  
• Yesterday 10:52pm
  Spot gold moving below $770 into negative territory for the session
  
• Yesterday 08:33pm
  (CA) Finance Min Flaherty pledges added stimulus in Jan 27 budget, could try to help credit availability for auto leasing