Advantage, dollar?

Last fall some clever analyst came up with the “FIFO” scenario — the U.S. was the first in to financial institution crisis and recession, so it would also be the first out. Judging from the robustness of the U.S. government response, this is probably a good bet. June could arrive with the ECB still cutting rates and European governments squabbling over additional fiscal stimulus while the U.S. begins to show signs of recovery and talk swirls around regarding when the Fed should start raising rates to offset all that inflationinducing new money supply.

In short, an ECB being out of sync with the Fed has only a temporary Euro-favorable effect. Financial crisis has already morphed into an economic crisis, and the ECB lacks sufficient tools to deal with it.

To be fair, it’s not certain the U.S. action will suffice to pull the country out of Great Depression II. But sitting on your hands and letting the generals fight the last war (inflation) sure won’t do it, either.