Key Statements
Blanchard on inflation in both, Europe and the USA
“There will be good news on inflation fairly soon. […] I am fairly optimistic that we will see a substantial decrease in inflation on both sides of the pond.” (However, it will not come all the way down to 2% .)
„In the US, the economy is very strong. […] Unless the Fed really steps on the breaks it’s not going to slow down.”
“In Europe, the economy is not as hot as in the US. […] It could be that in Europe, without the ECB doing a whole lot […], the inflation will slow down."
Blanchard on a possible Euro crisis
“There is a risk. It is not very high, but it is there.”
"Spreads of 100 or 200 basis points are not a big deal."
But: “Investors might worry, maybe because of not much, but if they worry, they ask for a spread […]. And if investors think TPI may not work, they will just attack.”
Blanchard on the odds of a global financial crisis
“I dont't think so.”
“At least the advanced economies' financial system can take the hit. […] Most banks pass the stress tests with flying colors.”
“Some emerging markets may be in trouble. But it is likely to be trouble for them, not trouble for the global financial System.”
Blanchard on Germany's economy
“Germany will have a hard time if the supply of gas stops.”
“Agreeing to reductions and to transfers of gas from one country to the other, especially with Germany, which hasn’t been very generous with transfers the other way, is going to be a very serious issue.”
“In the medium run, say one or two years, I suspect German manufacturing will do fine. But this winter I worry.”
