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PR Newswire
08-09-2022, 10:24 PM
Europe will suffer from prolonged inflation because the bill for staying warm through winter is going to be expensive. This is the price Europe has to pay in order to protect Ukraine and prevent Poland, Czech and Slovakia from being the next to disappear.'
This means Europeans will have less disposable income for other goods. Investors should start to consider the second order effect of a smaller discretionary income. What will Europeans cut from their household budgets? One I suspect will be travels and two, will be on food delivery and Netflix.
ECB has just delivered a 75 basis points hike. However, i think this is going to continue further. Similar to US Fed, they are worried of doing QT as it will impact the PnL of its companies especially the tech giants and large data centre industry there. Again, this is not a good strategy. In fact, curtailing the tech companies from their money is more benefical- reduces both inflation as companies close down and wages are surpressed as well as less tech companies means less energy consumption
This means Europeans will have less disposable income for other goods. Investors should start to consider the second order effect of a smaller discretionary income. What will Europeans cut from their household budgets? One I suspect will be travels and two, will be on food delivery and Netflix.
ECB has just delivered a 75 basis points hike. However, i think this is going to continue further. Similar to US Fed, they are worried of doing QT as it will impact the PnL of its companies especially the tech giants and large data centre industry there. Again, this is not a good strategy. In fact, curtailing the tech companies from their money is more benefical- reduces both inflation as companies close down and wages are surpressed as well as less tech companies means less energy consumption