Euro zone lending contraction compounds ECB headache

The ECB has cut interest rates to a record low, pumped extra liquidity into the banking system and announced a fresh government bond purchase program, but the measures have so far not managed to unclog lending to the real economy. 

Euro zone inflation is also running at only 0.8 percent - far below the ECB's target of just under 2 percent. 

Loans to the private sector fell by 2.2 percent in January from the same month a year earlier, ECB data released on Thursday showed. That compared to a contraction of 2.3 percent in December.

DYI Comments:  No doubt deflation is on its way for Central Europe and after that the U.S. as well.  U.S. Interest rates will remain low until the early 2020's arrive with our huge government liabilities [Social Security & Medicare] that will need to be paid.  At that time the inflation genie will come out of the bottle but until that time "the terrible teens" will be marked by mild deflation of -1.0% to -2.0%.  Making it very likely that the yield on 30yr Treasuries and 10yr Treasuries will be under 2% and 1% respectfully.

DYI