Disinflation in the Eurozone – an international, intersectoral phenomenon

Ernst Labruyere has a longread about disinflation in the Eurozone with some magnificent graphs which show beyond any doubt that disinflation is an Eurozone wide, intersectoral phenomenon. Much more of these graphs at the linked source.

Inflation in the Euro-zone from 2011 – 2014 Category: Health Chart by: Ernst’s Economy for You Data courtesy of Eurostat

In the past months, Draghi had so often announced that he would act decisively when the inflation rate would keep on dropping, that the whole financial world – and Draghi himself – felt that the ECB would lose all credibility, had Draghi again stuck with ‘words and warnings’ in June. And now Draghi’s bazooka should force the banks to lend more money at especially private households and SME companies – almost at-gunpoint. Draghi hopes (probably against his better judgment ) that these measures will be effective, where previous measures with respect to the interest rates and the money supply all failed … With the following charts, based on data from Eurostat, I will show that the risk of deflation in the Euro-zone is not an imaginary risk, but a very vivid one.