Euro inflation at 2% and stable

Via Eurostat, Euro area annual inflation is expected to be 1.9% in November 2010 according to a flash estimate.  Eurostat is the statistical office of the European Union. It was also 1.9% in October.

Some people think that inflation is good for indebted countries like Ireland and Greece.  The opposite is really true.  Inflation raises the interest rate which raises the cost of funding your debt.  If you are short funding as most countries are, that means you have a lot of debt that you need to rollover and since you have higher rates, you pay through the nose. 


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