Trichet says rigor and austerity lead to economic growth.

Yet another sign that we are an inflection point in the mentality of the general public, and that a secular change is underway — with the extremely beneficial consequence of killing dead Keynes once and for all — Trichet is now preaching for austerity by governments in order to foster growth. Remember that just 6-12 months ago, everybody was preaching fiscal deficits as the only way to not only get economic growth (although merely a statistical growth masking a deeper crisis down the road) but also as the only way to save capitalism. They also forget to mention that NO SOCIETY on the plant is currently FREE in the economic sense of it, nor capitalistic. The only difference between Greece and France and the USA is the degree of government planning, although the US have almost finished catching up, after 8 years of Bush and just a couple of Obama years...

Although all the non-sense about confidence is just political speak, the fact is that he's now pushing for austerity. This is also yet another proof that deflation is here to stay.

(Bloomberg) uropean Central Bank President Jean- Claude Trichet pressed governments to trim their budget deficits, saying such action would boost economic growth by improving confidence of consumers and investors.

“We are in a period where we have to manage budgets very tightly,” Trichet told journalists in Aix-en-Provence, France. “I have no problem with austerity, rigor. I call this good budgetary management.”
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“Confidence is key for growth, and if you cannot have confidence in the sustainability of the fiscal policies then you have no growth because you have no confidence,” he said. “The two things are complimentary.”