Different shades of Europe...

Article;
Europes money trap the end is nowhere in sight.

Comment;

Europe should not lower interest rate so much that it forces the economy into liquidity-tarp... At very low levels of interest rate people will find keeping money with them more convenient instead of keeping it in banks... And it will have to print money in order to carry-out its policies because it loses control through interest rates (already zero)… The US used QE when they lost control over interest rate because of ZLB and affected liquidity and money-supply through printing money… Unconventional tool… Europe is trying to infuse demand and economic activity by improving money-supply… And that would require no inflation targeting for some so that wages and prices move to achieve full employment… But the problem is that we have to deal with different shades of prices and unemployment throughout the Europe… Therefore Paul Krugman suggested high inflation for countries like Germany will make Spain more competitive in exports relative to Germany… Brilliant idea…  Therefore we can generalize the argument saying, that, countries with considerable trade surplus and less unemployment should try to inflate their economies and others with deficit and more unemployment should deflate, to contain trade balance within the Union… im not sure about the Union’s such commitment… Money-supply wise the former should increase nominal wages and income and the latter should increase real wages and income. Both ways demand is created…