This quote from a Deutsche Bank report on the differing approaches to rate-setting in the EU and in the U.S. is fascinating and instructive:

Recent and prospective differences between the Fed and the ECB in the conduct of monetary policy have been striking. The ECB has launched a Martian frontal assault on inflation while the Fed has opted for a more cautious and patient Venusian approach.''

The historical experience of deflation and depression in the U.S., and of German hyperinflation and currency reform in Europe, plays a key role in shaping different responses.

I hadn't thought of it that way, but it strikes me as correct. Both regions see the current market problems through the prism of their most traumatic similar economic experience -- and in the U.S. that's the Great Depression, and in the EU that is German hyperinflation. It is a lovely example of path dependency in the economy, with policy approaches differing not on where we're going, but on how we got here.

[DB via Bloomberg]

Having said a few unhappy things about Predictably Irrational earlier this week, here are notes on a few books, new and old, I've liked recently:

• Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. Despite a bad and breathless title, it's worth a read. Surprisingly interesting.
• The Forgotten Man: A New History of the Great Depression. Excellent. A must-read and a fascinating and fresh take on the Great Depression.
• A Liar's Autobiography, by Graham Chapman. One of my favorite made-up autobiographies ever.
• Meditations, by Marcus Aurelius. A classic that I reread on a regular basis, especially when I'm feeling at odds with the world.
• Creative Capital: Georges Doriot and the Birth of Venture Capital. A great and overdue history of the early venture capital industry.
• Where are the Customers' Yachts? The best and most timeless book ever written about Wall Street, with particular resonance today.

I've also just finished reading a pre-release version of Robert Shiller's new book, The Subprime Solution, and I enjoyed it. More on that one closer to the launch.