Very nteresting. Poor Europe. Your note 2. is very important as few commentators make the distinction. Prices in the Futurs Markets are TODAY assessments of prices for forward delivery or settlement, at which traders buy and sell. The really informative piece of information is the structure of futures markets, which may reflect expected oversupply (contango in physical goods) or scarcity (backwardation or inverses in grains)

Expand full comment

Why is inflation in France so much lower than in the rest of the EU? It sounds like they are doing something right.

Expand full comment
Jun 12, 2022·edited Jun 12, 2022

I'm a bit surprised to see the slow wage growth described as a weakness in the EU and equally surprised to see no mention of a major likely cause: the rigidness brought to wage processes by high degree of unionization and collective bargaining.

Taking my native Sweden as an example, many overall salary increases have been negotiated in advance by unions and employer organizations. This means many people will see wage increases within a normal 2-3% range this year even though inflation is above 6%. The governor of the central bank is even encouraging Swedish workers to not push for being compensated for inflation this year.

But isn't this exactly why the US is at higher risk of a wage-price spiral than the EU? I see this as a weakness of the US rather than the opposite?

Expand full comment