Master

Cual Master y Commander, Trichy va dando lecciones magistrales por el mundo. Ayer, hoy, mañana... Hoy en London School of Economics, donde se permite decir cuarto nonadas mientras el euro se le escapa.
En otros foros más libres, le ponen a parir, por ejemplo Beckworht en "fiddling-while-eurozone-burns", del que selecciono:

So why then is the ECB pushing so hard for monetary policy tightening?  From the New York Times we learn the answer:

With Germany, the euro zone’s largest economy, growing so quickly that some economists fear overheating, the E.C.B. has been trying to nudge interest rates back to levels that would be normal in an upturn.

Silly me, I thought the ECB's mandate was for the entire Eurozone not just Germany.  Now Germany is the largest economy in the Eurozone and so its economic conditions have a large influence on the the Eurozone aggregates that the ECB targets.  So maybe I am being too hard on the ECB here. Still, if the ECB really desires to save the Eurozone in its current form then tightening monetary policy is a move in the wrong direction.  

Here is why. If the ECB were to ease monetary policy, it would cause inflation to rise more in those parts of the Eurozone where there is less excess capacity.  Currently, there is far less economic slack in the core countries, especially Germany.  The price level, therefore, would increase more in Germany than in the troubled countries on the Eurozone periphery.  Goods and services from the periphery then would be relatively cheaper.  Thus, even though the fixed exchange rate among them would not change, there would be a relative change in their price levels.  In other words, there would be a much needed real depreciation for the Eurozone periphery.  This  would make Greece, Portugal, Spain, and other periphery countries more externally competitive.

Again, the relative price level change would not be a permanent fix to the structural problems facing the Eurozone--it is not an optimal currency area and there needs to be debt restructuring--but it would provide more flexibility in addressing the problems. Tightening monetary policy, on the other hand, would only make matters worse. It would force all of the needed real depreciation for the periphery on wages and prices in the troubled countries.  That only increases the pain for them and makes it more likely they will leave the Eurozone.  This seems so obvious to me.  Why isn't it obvious to ECB officials?  Why are ECB officials fiddling while the Eurozone burns?

En fin, Trichet domina la situación, está claro. Sobre todo cuando dice

  Elsewhere in his lecture, Mr. Trichet repeated his familiar dictum that the ECB must not allow the commodity-fuelled rise in price indexes this year to create expectations that inflation will be higher in the medium term. Failure to do so, he said, "could trigger second-round effects on wages and prices."

Santa Lucía le conserve la vista. Lo de los efectos de segunda ronda, cuando nos estamos hundiendo en la m... ¡qué cansino!
Ah! y el análisis de Beckwroth a través de los cambios en los niveles de precios, magistral.