DUFF & NONSENSE!: Round and round it goes and then disappears down the plughole!

Round and round it goes and then disappears down the plughole!

A long but chrystal clear summary of euro woes and German wails can be - and should be! - read in Der Spiegel online. I just hope and wish I live long enough to read some sort of detached historical record of what is going on because this is not some arcane dispute over financial and fiscal policy. This is the equivalent of the sort of mass madness which took place at the Kaiser's court in 1914. The Germans are like a skier finding himself in a valley with not one, but two, landslides threatening from both sides depending on which direction they step. Today the 'Kaiserin' must be asking herself, Hamlet-like, 'to bond or not to bond, that is the question?' Today's news that Germany's output for the last quarter was as flat as a witch's tit (as they say around here) can only serve to heighten the tension.

According to Der Spiegel, the European Central Bank (ECB) has already sold its soul by stepping down from its pedestal of monetary purity and now finds itself mired in the mud of yet more futile efforts to prop up profligate, European national debts. Old German hands, steeped in the knowledge of what happened to the Weimar Republic and trained in the post-war tradition of strict monetary policy guarded from any contamination by mere politics, are outraged at where Germany is being led.

In a nutshell, if the ECB goes ahead and issues a European bond which will swallow all the debts of those naughty, Mediterranean, big spenders then Germany, with a tiny bit of help from Holland and Luxemburg, will carry the can. Even worse, such an arrangement will provide the 'big spenders' with immediate relief and the chances of them mending their ways, let alone their owings, will be nil! If German funds prove insufficient to back these bonds, the ECB will simply start printing euros to make it up and, hey-ho, we'll all be off to the inflationary races!

It is not clear to me whether it will be the German people who will erupt in fury first, or the Mediterranean peoples who will have austerity rammed down their throats with no vote with which to express their dissent. We have all seen in Yugoslavia what happens when the iron shackles are broken from a non-nation which only existed by forcing together independent countries with a variety of cultures and ethnicities. Like an atom under pressure, nuclear fission occurs and it is wise not to be standing too close to the resulting explosion.

The Spiegel report is a 'must read'!

Posted by David & Son of Duff | Permalink