It is incredible how the European Unions's summit is being misreported. Is this because economic journalist dont understand the facts of the issue, or is it because they purposefully hide those facts? Ignorance seems the simplest answer.What we have here is the classic situation where a society has ended divided into two opposite classes: the owners+creditors vs proletarians+debtors. The creditors are in Germany, Holland, Switzerland; the people that is hopelessly indebted are in Greece, Spain, Italy. Exactly like Greece before Solon, exactly like Rome before Tiberius Gracchus, exactly like Judea before each Jubilee year (49 years). Exactly like then, the creditor class is resisting fiercely any forgiving of debts and fights to keep enslaving the population, forcing proletarians to sell their sons and daughters to pay debts. What else is the migration of young East Europeans to Germany's factories and brothels?
The media is like trying to convince Germans to forgive debts by diverse methods: for example, printing money and inflating the Euro would be a way to delete debts. The Germans say: Only over our dead bodies. Never. Another way is called fiscal union, by which the debts would be guaranteed by the whole community. That "solution" sounds terribly unjust to the creditors: What? I will have pay to HIS debts to ME? Do you think I am drunk or crazy?
In the past, these conflicts were solved by class war (like in Rome) or by a sage like Solon, or by a Jewish God ordering everything to start again from zero. War is improbable, Solon died 3000 years ago (if he ever lived) and the Jewish God... well, he never had much influence on Germans (vide "Small Gods" by Terry Pratchett).
13 comments:
Partially correct assessment.
It reminds me of cartoons. Tom is chasing Jerry. But then we see that a larger more dangerous animal is lurking behind Tom.
Foreign German debt : Germany $5.624 trillion (30 June 2011)
Precise numbers are hard to come by.Modern finance is more magic and empty talk then anything mathematically real.
What their assets are worth hmm you already talked about that. Not much above zero, their managerial ability was found lacking.
The Anglos could crush Germany by financial means in a few days. Without any effort.
I completely agree that DE is doing now precisely what you described. But they are weak and why they behave like being strong is an absolute mystery for me.
The US can do many things which DE can't. Because US Army exists and German one was obliterated.
Why do the Germans imagine they can play in the big league?
It is the path of sorrow for them.
Only pain and humiliation can come out of it.
Excellent book.
IHTG
You seem to be overeducated.
Apart from reading, what else you do?
I don't read nearly as much as I should. Although I am currently reading another Terry Pratchett novel.
He is very ill and his newer books are not written by him.
I wonder what he would made of the illegal chupacabras immigrants.
The European debt crisis would vanish in a puff of smoke if Italy and Spain could pay their INTEREST at much lower level. No need to pay back debt. That would be enough to guarantee that contagion from Greek default won't topple the other dominos. Sovereigns don't repay debt anyway, they roll over and inflate it at snail's pace over many years.
Eurozone was supposed to facilitate free movement of labor. Big unemployment differences between Spain and Germany show that it's not happening. Instead of offering work for Southern European sons & daughters, the germans just want their tax tithes.
In Finland we see private-sector bankruptcy or layoff news weekly, but public-sector job cuts are not there and will not be there as long as other people's money is available to pay the expenses.
Viljo
The Germans need the markets for their exports far more than they need debt repayment. They'll work out something. Now if it were a industrially gutted country like the UK is now, its a different story as they'll starve without their rentier income.
Ivan
What else is the migration of young East Europeans to Germany's factories and brothels?
Eastern Europe has sound finances. Mostly. It is Southern Europe that is on the ropes.
Germany's brothels are full of beautiful slav girls. Southern girls's finances may be on the ropes, but their services are not in demand.
A lot of the whores are gypsies from Romania. On the highway in Poland we passed some people who were selling strawberries and other girls that had something else to sell and it wasn't fruit.
K
I've heard the "Germans benefit because they get to sell stuff" argument before. So if I sell you a car and you "buy" it with money that you have borrowed from me and have no intention or ability of repaying, I have "benefitted"? I don't think so.
K
In economics, I think it is important to look at real goods and services and not paper. In real terms, the Germans have sent the Greeks, etc. tons of stuff - millions of cars, subway trains, steel for bridges, etc. and in return they received next to nothing but worthless pieces of paper. A few Germans got to take vacations. A Martian would be amazed at how stupid the Germans were - you gave away your Mercedes in exchange for a piece of paper?
K
Yeap k exactely that.
And in the mean time german corporations and banks seemed to have a productive activity. But they didn't. like communist economies where production grew and grew and society became poorer and poorer.
Germany produced loss and managed until now to somehow paint it as usefull economic activity. Reality was visible for any observer traveling there in the last decade - have no idea about before at grass level.
"A Martian would be amazed at how stupid the Germans were - you gave away your Mercedes in exchange for a piece of paper?"
Amazingly that is all the German managerial class was able to do.
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