Thursday was the most interesting day of the week as ECB president Draghi announced the central bank’s interest rate decision. Not only was the main refinancing rate cut with ten basis points to 0.15%, but, more interesting, the ECB decided that it will charge banks for depositing funds at the ECB. Deflation fears led to this historic policy change: the ECB is the first major central bank to... »
Negative Deposit Rates in Europe: Unintended Consequences?
June 6 2014
Olav Dirkmaat
Game Time: the European Elections
May 23 2014
Yesterday, both the Netherlands and Great Britain kicked off for the European elections. In the UK the anti-EU United Kingdom Independence Party (UKIP) made huge gains, acquiring between 25 and 30 percent of the votes (about 19 seats). In contrast, the Dutch election results were very fragmented, with the anti-euro PVV obtaining an estimated three seats, while the pro-EU D66 party came out on t... »
Olav Dirkmaat
European Growth Horrendous: Politicians Blame the Weather, Again
May 16 2014
After writing extensively about the abysmal US Q1 GDP report two weeks ago ('It’s the Weather, Silly'), this week attention turned to Europe, as GDP figures over the first quarter were released. Although US growth was disappointing, euro zone growth was even weaker. Many countries actually had a... »
Olav Dirkmaat
The Best Inflation Hedge: Gold versus Stocks
May 9 2014
Investors can be divided into two groups: one group strongly believes that gold will protect their savings during a period of rapidly increasing inflation; the other group thinks that stocks are a better protection against inflation. Who’s right? What is the best hedge against inflation: gold or stocks?... »
Olav Dirkmaat
