What hyped up disaster do we routinely talk about this week? One of the curious omissions in reams and reams of newspapers is whether Germany should stay in the Euro.
If Germany was thrown out of the Euro, then the Euro could be revalued to a level that was more appropriate for Spain, Greece, Ireland and possibly Italy. The new Eastern Block countries would no doubt benefit too.
My own take is that the current crisis is caused by, ignoring the media, a lack of capital flows back from Germany to the southern states. The southern states bought the German goods and services, but never received the money back, in the form of loans etc. Interestingly enough, the Chinese are not making the same mistake, and keep on lending to the Americans so they still buy their goods.
Were Germany to exit the Euro, German goods would become very expensive and the negative flow of capital out of, say Spain, would be reversed. Spain would become very cheap again, and the Germans would flock back with their beach towels.
Globally, this would be a benefit too, as European food prices would fall.
13 years after the start, the Fourth Reich would end, one year longer than the third.
No comments:
Post a Comment