Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan
Gold Price Back Below $1,800! - 10th Sep 21
The Inflation/Deflation debate wears on… - 10th Sep 21
Silver Price seen tracking Copper prices higher - 10th Sep 21
The Pitfalls of Not Using a Solicitor for Your Divorce - 10th Sep 21
Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
This Boom-Bust Cycle in US Home Ownership Should Give Home Shoppers Pause - 9th Sep 21
Stock Market September Smackdown Coming Next? - 9th Sep 21 - Monica_Kingsley
Crazy Crypto Markets How to Buy Bitcoin, Litecoin for Half Market Price and Sell for TRIPLE! - 8th Sep 21
Sun Sea and Sand UK Holidays 2021, Scarborough in VR 180 3D! - 8th Sep 21
Bitcoin BTC Price Detailed Trend Forecast Into End 2021 - 8th Sep 21
Hyper Growth Stocks - This billionaire is now using one of our top strategies - 8th Sep 21
6 common trading mistakes to avoid at all costs - 8th Sep 21
US Dollar Upswing, S&P 500 and Nasdaq Outlook - 7th Sep 21
Dovish Assassins of the USD Index - 7th Sep 21
Weak August Payrolls: Why We Should Care - 7th Sep 21
A Mixed Stock Market - Still - 6th Sep 21
Energy Metals Build Momentum; Silver & Platinum May Follow - 6th Sep 21
What‘s Not to Love About Crypto Market Fireworks - 6th Sep 21
Surging US Home Prices and Gold – What’s the Link? - 6th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Germany’s Bad Economic Numbers Are Great News For All Of Us

Economics / Germany Oct 08, 2014 - 08:38 AM GMT

By: Raul_I_Meijer

Economics

Something’s happening in Europe that I would like to cheer and encourage at the top of my lungs. While only yesterday, most European leaders, the ECB and the IMF were busy chiding Germany for not lowering taxes or increasing government investment in its economy, today’s release of German economic data should either shut them up or drastically change their tune.


Then again, they are to a (wo)man too self-obsessed and -important to keep their traps closed, and they know only the one tune. That should lead to some serious bitterness, of which I’m also full-heartedly in favor. For everyone’s good but that of the self-absorbed politicians, the eurozone should be demolished, and entirely new, far more modest treaties between the nations negotiated.

If we can agree the single currency, and the legal settings it is caught in, have already done great damage to the over 50% of young people in Spain and Greece who may never find jobs at all, to the Italians and Irish who were keelhauled in the name of the greater good, and and and, and to all the millions in all the other eurozone member nations, if we can agree on that, things are going to get much worse if the euro project is not abandoned as soon as possible.

The good thing about Germany’s bad, make that awful, numbers is that they will raise the voices of euroskeptics across the country. If there is to be a change in view or politics from Angela Merkel and her people, it’s not going to be what the rest of Europe wants, a softer stance on Mario Draghi’s ABS junk paper purchases. Quite the opposite: Germans will increase their calls for Deutschland first, and Merkel can no longer ignore them.

Berlin will have to turn to protectionist policies, sort of like the antithesis the the entire European project that has seen so much support from these very Germans. Merkel cannot accept looser financial policies in Brussels, which carry the risk – bordering on certainty – that her taxpayers will be on the hook for losses incurred in the ECB’s last ditch attempts to save itself and the currency. Merkel’s – existing and potential – voters will not accept it.

That de facto means she must turn her back on Europe. It will not be advertized that way, at least not in the beginning, but it is what it all comes down to. Whether you agree or not that Germany’s own points of view and actions have contributed to the misery large parts of Europe are in, the fact remains they’re miserable and slip sliding into worse. Something needs to be done, but no-one can agree on what.

Draghi’s highly expensive and highly disputed buy buy buy plans can’t actually solve any problems, neither the ones countries already had nor those the euro straightjacket added. What the plans may do is buy a bit of time. Time that will be used to further tighten the euro noose around everyone’s neck.

Central banks can’t solve problems, but they sure can make them worse. This may sound strange when you look at what many see as a recovery in the US, but just wait a few more years and then look at what $10+ trillion has bought Americans, or $25 trillion has done for China.

In the end, it’s all just more debt piled on top of debt, and nothing but a huge blind spot in the range of vision of economists, edged on by those who seek to profit from a nation’s taxpayers being dragged down further towards servitude. That you could boost a broke economy be making it more broke, or even risk doing so, is insanity squared, but it’s also what every economics textbook says should be done.

In a few days, another fake Economic Nobel (Fauxbel) will be awarded to another clown or comic troupe with some utterly useless theory, their field lauded as a science without ever obeying even the most basic scientific principles. And some day people will ask: ‘what were they thinking?’, but they’ll have to ask their questions from cardboard shovels and corrugated shanty towns.

The fast rising right-of-Merkel Alternative for Deutschland party will grab onto today’s bad bad data (25% plunge in new car sales, 8.8% less capital goods (machinery etc.) produced, factory orders down 5.7%, overall industrial production down 4% MoM) to demand protection for Germans, and less, not more, Berlin involvement in the EU and eurozone.

At the – well, ok, arguably – worst point in euro history, with all other ‘solutions’ failed and debt levels higher than ever, Mario Draghi wants to raise those levels even more. Merkel doesn’t have the political room to allow him to, because she doesn’t have the economic room anymore. As soon as she announces some, any, cut in domestic services, the AfD and other voices will clamor: cut the Greeks first.

France is gasping for breath, Italy is on life support, Greece, Cyprus and Spain are in the emergency room, and Europe’s German engine has just quit. A 500+ million ‘union’ with no steering wheel and no engine is on its way to the brink of a deep cliff. Someone’s going to jump ship, no question about it. The Germans themselves might be the first.

Nobody in Europe has anything to lose from the demise of the eurozone, at least nothing that they wouldn’t lose anyway, but every single European save for a cabal of power brokers and narcissists has a ton and a half of happiness and self-fulfillment and independence to lose from the continuation of the failed project. Luckily for them, the German data promise to bring the merciful end that much closer.

What’s wrong with the EU is the same as what’s wrong with NATO, the IMF, the World Bank. They are institutions that start with noble ideals, but soon start to gobble up ever more power, and with no-one to hold them to account. That kind of structure in turn attracts a certain kind of people, the ones who don’t like to be held to account.

And though I’m a little hesitant to include the US in all this, since it”s so much older, I certainly wouldn’t discard Washington offhand as a place where the wrong kind of people have gathered far too much power.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2014 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
Raul Ilargi Meijer Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in