The following is a joint effort by me and Edward Hugh and if we are both individually prone to writing long and (sometimes excessively) winding entries a combination is bound to be long and ugly; well, the former at least. Surely, it seems, in Macro Man's words that the ECB may have had one of those Damascene moment as interest rates were cut by 50 basis points yesterday. It was not the actual 50 point cut which was largely expected, but rather the ensuing comments by Trichet. In particularl I took note of the fact that now it is not only falling energy prices (disinflation) being mentioned, but also downward pressure on prices from falling domestic activity.

Obviously, the discussion which we hope to initiate here comes in two phases. First, there is the question of whether or not the ECB should be considering QE at all? I