"Re. "What Ptolemy tells us about Germany and Greece". Higher than (Eurozone) average inflation in Germany and lower than average inflation in PIIGS for some years to come is exactly what's needed to unwind the internal disequilibrium at the heart of the Eurozone crisis. In fact, I doubt that there is any workable alternative solution. Natural market forces are already moving to resolve the problem as historically low unemployment in Germany begets aggressive wage demands in that country and as historically high unemployment dictates wage deflation in the PIIGS economies. I fully agree that the key issue is whether policy makers acquiesce to these corrective market forces and to obstruct them would be a profound policy error. On this point I would lean in the optimistic direction. Like the rest of us, Germans are both pragmatic and ambiguous. Although they dont like inflation, they do like higher wages, and particularly so when justified by basic market forces. The potential for Euro weakness is also a very important component of the cure. German companies are in a much better position to concede competitiveness within Eurozone (though higher pay settlements) when Euro weakness is maintaining or enhancing their competitiveness with the rest of the world. In any event unfortunately, it looks like the cure will take years rather than quarters and hence the imperative that policy makers encourage rather than obstruct it. The attached report might be of interest.

"Best regards and still very much enjoying the commentary that you and Eoin provide,"

David Fuller's view Thanks for the feedback and especially for your very good report. What you say certainly makes sense to me and will be of interest to many within the Collective.

(Note: The Ptolemy item was posted last Wednesday.)