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Europe Follows US In Demanding Germany Explain Its Exporting Ways
As we discussed two weeks ago, it would appear Germany's lack of willingness to throw itself on the pyre of self-sacrifice and not adopt a global Fairness Doctrine - as engendered by the US Treasury's (and IMF's) bashing of the core European nation's for maintaining its export strength and daring to keep Europe in tact and thus a periphery-damaging strong Euro - is gathering steam. None other than Europe itself is now 'probing' Germany's trade surplus, using enhanced powers over how euro nations manage their economies with the IMF urging German Chancellor Angela Merkel to curtail the trade surplus to an “appropriate rate” to help euro partners cut deficits.
As we previously noted, Jack Lew (and everyone else) appears surprised at the following chart all of a sudden...
It is also a complete shock to the US Treasury that the current layout of the Eurozone - the same Eurozone that the Fed has stepped in on numerous occasions to bailout, common currency and all - was simply to facilitate German exports to fellow European countries.
Which is probably why, after years of saying nothing, in its semi-annual currency report released yesterday and "employing unusually sharp language, the U.S. openly criticized Germany's economic policies and blamed the euro-zone powerhouse for dragging down its neighbors and the rest of the global economy."
And now - it's the Europeans jumping on the 'Bash Germany' bandwagon...
Via Bloomberg,
European Union regulators began a probe of Germany’s trade surplus, using enhanced powers over how euro nations manage their economies.
The decision to step up monitoring of imbalances in the German economy follows criticism that the country’s current-account surplus -- which at 7 percent of gross domestic product is the second highest in the euro area -- is limiting exports from other euro countries by adding to the strength of the single currency.
The opening of an in-depth review into the imbalances in Germany’s economy comes after the U.S. Treasury blamed German surpluses for draining European and global growth. The International Monetary Fund also reprimanded Germany for its surpluses, urging German Chancellor Angela Merkel to curtail the trade surplus to an “appropriate rate” to help euro partners cut deficits.
“Crucially, a rise in domestic demand in Germany should help to reduce upward pressure on the euro exchange rate, easing access to global markets for exporters in the periphery,” EU Economic and Monetary Affairs Commissioner Olli Rehn said in a blog post on Nov. 11. “Removing the bottlenecks to domestic demand would contribute to a reduction in Germany’s external trade surplus.”
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Imagine if Germany had oil.....
They could invade the rest of Europe?
So Germany, which is working hardest for those exports and the highest productivity in the world, is being condemned by America, which believes in creating prosperity by printing more money.
When in history have i seen this scenario play out before? Where the hard workers are condemned by those who wanna get rich by printing currency>
The Germans have an export advantage because southern zooropa is tied to their Euro; if those countries could devalue, the fat lady would be singing a different tune.
And you can put DB and some other Commander Klinks on that list of printers of prosperity, if you were being honest.
Retirement with full pay pension at 55, 6 hour workdays, and you believe only an overvalued currency is the cause of the Periphery's suffering? I bet you studied in the US Universities' Economic Depts
Dunno where you got that from. I'm just explaining that the German export vunderkind is flying on Icarus wings. When the follies of the PIGS catch up with them, Germany will be hitting the skids right alongside them.
I bet you don't know your ass from a fucking hole in the ground, chump.
"When the follies of the PIGS catch up with them, Germany will be hitting the skids right alongside them."
You seriously need to get out of the lab and see the real world. Go to Germany. Visit their schools and factories, and you'll see the difference between earning(Germany) and borrowing(PIGS).
There are fundamental differences between cultures of Germany and PIGS
And, if you say an overvalue currency is causing the Periphery's problems, i bet you'd agree with Bernanke and the QE charade?
EXACTLY! Germany's trade surplus in spite of a strong Euro. Perhaps if the PIGS had the same work ethic they'd not be in the shithole they're in.
Don't forget trade is zero sum; for every surplus there is a deficit.
Unbacked fiat central banking is allowing the spreads between surplus and deficit to be stretched to epic proportions.
Gold-settled trade will put a stop to that shit ...
Regards,
Cooter
Read my comment below, before showing the shit you have for brains, asshat.
Germany also has an uncanny ability to use government help to undercut anyone in the export arena. Even with the highest cost of production in the world Germany will underbid anyone because of government subsidies of exports. The U.S. could learn a lesson.
Clearly you have not heard of Tax free export zones on the Gulf Coast for the Big Refiners...
What kind of indirect subsidies does Boeing get? John Deere?
Out here in FEMA region X, I can tell ya' that Boing (I spelled it that way intentionally) just won some huge tax concessions from the State of WA, on just a threat of moving more production out of the state.
and racing your currency to the bottom....
our government also provides the greatest (military) subsidy of all - cheap oil
Well articulated I_G.
I've been on business to Germany in the past and it's no small wonder why they are and have been the singular economic force within Western Europe since the end of WWII. The worker in every vocation and professional level of business is treated with respect and is a valued commodity that has incentives through training and education that is paid for. The worker grows with his business and gives it back to his/her employer because the incentives are clearly there to be productive. Thus making the business a success is mutual and assured from the very top to the very bottom.
Where do we see this in the U.S.? After an engineer graduates with an undergraduate degree all the specialization and additional training comes out of his or her own pocket which in this economy starting 10 years ago is a gamble at best.
The only reason why the U.S. Government is doing this to Germany right now is because of the latest imbroglio over the spying scandal which has more to do with our inability of paying our debts because of that (massive printing) and because our corporations made the decision long ago that profit was the only necessity and more important than tinkering with the labor at home.
No, that is not what you said. You said "The Germans have an export advantage because southern zooropa is tied to their Euro; if those countries could devalue, the fat lady would be singing a different tune."
Who retires at 55, specially with full pension? The only one I know is former head of IMF delegation to Portugal (just to then be hired back), which demanded retirement age increased (for the poor)...
And for the record, the common point between the consistently most productive factories of (German) VW, Continental, Leica, (among others), is that they're all located in Portugal...
It's Colonel, not commander.
Cut him some slack, he works at GM.....
Time to split the Euro into two currencies: Northern and Southern
It may be more than 2 parts.
<salutes and then goosesteps stage right>
Ah yes, if only those southern economies could wreck their respective currencies once again in spending power-destroying devaluations.
People advocating these policies obviously lack any knowledge of post-war economic history in southern Europe, i.e. an unending series of devaluations to avoid painful reforms.
Also, they've never lived in any of these countries pre-EMU. If they had, they'd know that devaluation is very painful to both consumers and savers.
It always amazes me how economists purporting to care about Main Street can seriously advocate these worn-out policies of periodic currency debasement. Of course they're mostly Americans, so they're used to exporting their inflation to the rest of the world. Well, the rest of the world can't do that because they don't enjoy 'exorbitant privilege'.
Reserve currency myopia.
our biggest export is the dollar, and demand is shrinking.
along with our penis
They could invade the rest of Europe?
Why not just say fuck it and go back to the Deutche Mark? Deutche Bank would get hosed on the bonds they own but with a currency that would be second to none on the contenent (world?) I think it would be a good move for the German people right? Of course the German oligarchs with substantial interest in said bonds would likely be pissed...
Should remind Euroland that Germany is paying all the bills......maybe they should just shut the hell up.
Old saying "If it ain't broke, don't fix it." IMF saying "If they ain't broke, we can fix that!"...what a bunch of meddling twats. Those organizations should be disbanded and the members shipped off to Vietnam for trial.
IF the government had mechanics, they would send them to a NASCAR track to tweak the vehicles to get just a bit oh, so much more speed out of them.
And by next February, the cars at Daytona would be running slower than rush hour at 285, and 75, the new home of the Atlanta Braves.
That's if they run out of that premium fed gasoline.
They have a ton of "manufacturing". There's got to be a chemicals weapons plant in their somewhere. I vaguely remember an aspirin plant getting bombed a couple years ago. Bayer makes aspirin, right?
Take econ101 to learn that a government cannot steer a country's external account. Flows of capital and of goods and services depend on purely private decisions.
That's a great point, Herb. I was going to make a similar one myself from a different angle: What does it tell you that other countries are telling Merkel to curb her country's exports? She can wave a magic wand and make that happen?
Or an even scarier question: what if she can? What would THAT say about how the world operates?
There's another side to this, as well.
Knowing how Britain obtains its figures for these types of industrial stats (for example, relying on businesses to self-report sales and trade etc) and knowing how a lot of businesses essentially make the stats up because filling out the forms accurately would be someone's full time job and considering the same is probably true for Germany, I find it concerning that so much policy suggestion comes out of analysing -- what are essentially -- overall guide figures that could be out by a lot.
And how exactly is Merkel supposed to grow domestic demand? Have you seen the IRs in the eurozone? Somehow I don't think a free Spiderman towel with every new Mercedes is quite going to cut the senf.
About time to start the engines.
http://www.youtube.com/watch?v=Bi3Rh4TDDlo
You mean like this?
http://www.youtube.com/watch?v=E9c8C2K-TtE
Uh.....
Because people elsewhere decide to buy German things?
Duh....
Precise Greek engineering.
Words I have never seen in the same sentance.
Add anal to that, and maybe....
...Precise Greek Engineering...
A real world example would be the Sony Brand. Their televisions once were held in high esteem.
They make that product in Spain and Slovakia and watch the world beat a path to the door, any door...
I actually know some young Greek engineers. They all either work in Germany or Britain mind, and you can only tell they are Greek by their names, but still. Weirdly, in my experience, Greeks tend to be rather good at maths, which probably helps. S'pose they had a head start, though: Pythagoras an' that.
Greece's problem is that it just doesn't hold onto its best students. It has little for them. Too much of a left/right divide that causes mayhem for an decent industrial policy.
Because the price at which those things will be bought by those people is set by the EU?
Tell us more on this, please!
Ah, the old days...when two people entered into a transaction at a price that was mutually agreed to.
Than God we have government to force us to participate in transactions that are not mutually beneficial.
Like Obamacare....
Shirley it can't be that simple? Its almost as if people want their goods then buy them. That defies economic principles as laid out by the IMF and US.
recent events have even defied physics principles as laid out by the US
No, because people elsewhere in Europe are declaring war on us again.
Dear Germany: You really need to lay off some workers, get those strong unions of yours out of management, start importing more cheap shit from slave wage countries, and go into more public debt. How do you expect us bankers to make any money if you're building quality shit and exporting it instead of just borrowing from us and gutting your middle class so they are forced to do so as well? Thanks in advance. -IMF
Not to mention going green with Solar-panels.
Not to be overlooked, but when you have a bureaucracy that has not suffered Regulatory Capture, you can make shit work..
Consider the following: Germany has cut oil imports by almost 50% since 1980 and produce nada. They import 25% of their coal and 90% of their NG...
http://mazamascience.com/OilExport/
Select Germany
The next thing you will be claiming is that workers who are well compensated can participate more fully in the economy at large and add bouyancy and rapidity at which money exchanges hands. If you swallowed your ounce of good ole' US dogma like a good boy each day you would know that velocity and participation mean nothing when compared to the full flowering beauty of propaganda and welfare.
Moron.
/s
and quit recycling your beer bottles
Germany lost the war but won the battle.
When you have next to nothing for raw materials, you have to play the game very astutely...
Strange (/s) timing as it looks like the new German coalition has decided not to go with Commission and ECB proposals for banking union or to allow the ESM to recapitalise the EU banks
In other words, Germany is more likely to come off the top of Europe than Greece to fall off the bottom...
How dare you run things without your first concern being bending over to central bankers Germany!
This aggression will like, not stand, man! This aggresssion will not stand, Man. - YouTube
Oh, this is about EU problems. I saw sow-teets and got excited. Thought there might be a free phone or something inside.
Over.
It's possible that Angela will sell her soul.
Regret to inform: slight inventory control problem on that front, sir.
To Prove that Bipartisan International Political Cooperation works, I intend to play a round of Golf on every "A" rated Course across Europe, because, "They built that, That foreigner could have been my Son,and If You already have a slut, You can keep Your slut". Golfer, Community Leader of the USSA Barack Mulligan Obama
Brazil is exporting more to the Eurozone than the US. Congrat USA! You really need the shale boom.
Shhhh. You're breaking our concentration. We can only do one thing at a time.
Perhaps that's because inflation in Brazil makes buying a Yugo prohibitively expensive, thus preventing them from burning all their exportable resources in giant dipshit under-powered, gas-guzzling deathtraps while towing Jetskis and listening to Sarah Palin on the Ray-dee-oohhhh.
Do you know that if you count all imports and all exports of all countries in the world you do not get the same numbers. Exports are much bigger. I like to make my own math.
Don't say we export to mars, please.
Turn those (manufacturing) machines back off!!!
Tell the Germans to get back in there and buy! buy! BUY!!!
The germans are only able to save, save, save. And then give the money to the PIGS.
The PIGS are only able to grow food and then sell it to the Krauts, Krauts, Krauts. Those clever bastards!
That was a good one.
Dear EU,
Go to hell. We are Germany, you are not.
Sincerely,
Angela
PS: NSA, Go to hell.
you mean NSA return home ?
Zhey don't like us? hmmm, time to bring out ze panzar again.
I'm sure controlling exports is a job made just for Maduro or Kirchner. Latin America to the "rescue"!
Kirchner also fits the german language standard.
And she's a real lady.
Looking at exports alone doesn't tell you a lot. Germany also imports more as a % of GDP than the other countries mentioned here. The reason for that is that the German industry has outsourced a lot of simple tasks to Eastern Europe among others and imports this stuff prior to domestic production. So, you should look at trade deficits and not exports as a % of GDP.
Second, the trade deficit per se is also not the only aspect to consider. As a lot of foreigners work in Germany and transfer much more money back home than Germans living abroad do; as Germans are one of the largest group of tourist spending much more abroad than foreigners do in Germany; as Germany is one of the largest contributors to international organizations (UN, EU etc.), Germany needs a trade surplus in order to manage a balanced current account.
And finally, if the foreigners want a lower German trade surplus they may buy their own cars. Oh, wait a second... http://ericpetersautos.com/2013/11/05/french-cars-best-forgotten/
Pssst, don't tell. Sell the news and lough later.
Central Planning Genius.
1. Extend ridicuous amounts of credit to the periphery so they can buy German goods
2. Watch German companies grow like mad until the periphery collapses under unpayable debt
3. Blame Germany for making too much stuff
Germany makes the best in the world currency printers....that is what they are exporting...lots of fiat printers....
So, by tapering at home the US can reduce the German trade surplus? Sounds like an adequate response to those claims.
Heidleberg, bitchez.
Although I'm not sure how that would fit into the strategy.
Close but no beemer, Koenig & Bauer, KBA, is the currency/engraving press meister...
https://www.google.com/finance?cid=670642
Who in the hell are they to determine what the "appropriate rate" for a trade surplus is? Fuck those criminals. Maybe if the other countries made anything that was actually worth a shit they wouldn't have these problems.
Germany! See to it that u start import a lot of gold from the EU countries and US and ur trade balance won't be as good anymore:)
@Aktiedealern
That may take 7 years...............or more to action!
Okay, if no one else does it, I will mention the elephant in the room myself: TARGET 2 , bitchez! (Trans-European Automated Real-time Gross Settlement Express Transfer System)
The FED bailing out Europe numerous times? Well, after the US sold Europe 2.4 trillion worth of useless MBS and other crap.
The FED was bailing out the Banking system and Banksters are everywhere.
NO ONE ELSE GOT, OR GETS, BAILED OUT.
Every country should have a currency. And everyone should be able to print as much as they want. The Free Market will keep things in order and we now have computers strong enough to keep track...
The US is criticizing Germany's economic policies?
Blaming Germany for dragging down the glodal econmy?
You have got to be kidding!
Wonder when the Germans will get sick of the bailout game and walk? At some point they will get tired of this...hopefully before it drags them down.
A picture of a Dog chasing it's tail comes to mind or even this
bankers last grasp of an imploding EU. When was the last time it was a bad thing to have a account surplus. Only in the Soverign world this exists.
How retarded is this? Did those politicians completely forget what they have in their own house or garage, when they complain about Germany's exports in their office? Stop buying German cars, buy only Chevys, then you can complain.
Hey they are smart, demand quality, hard working and make the best cars in the world. Something American Unions HATE...heck most unions outside of Germany hate quality, hard work. What are people complaining about?
The irony is, that German auto workers are heavily unionized. I always LMAO when US managers bash unions and then drive away in their Porsche or Mercedes.
The Euro Zone crisis was caused by stupid greedy borrowers (periphery); stupid greedy lenders (the German Banks) and stupid, lame duck regulators (central banks.)
Trying to get this straight, bear with me...
Germany is evil because they make things that people want more than other Euro-members products (if they make them at all) and 'force' the other members to buy them?
And US Govt. are part of the whiners? Really?
Am I 'cuturally insensitive' because I find a certain amount of amusement in this state of affairs?
Germany tried military conquest twice and failed.
The rest of Europe should be grateful that the only things Germany is dropping on them now are BMWs and industrial machinery.
Economic conquest ftw.
How dare they compete with us!
germany needs higher taxes or the 1%ers, higher public spendings would close the gap...
So Germany bails out European countries by giving them lots of German moneys. They in turn use that German money to buy German imports, thus making the german economy continually pump out more...stuff...to sell to the European countries that are borrowing money from Germany to buy that stuff?
... and in the topsy turvy economy getting stuff that provides you with satisfaction is actually a bad deal, while getting bills with promises on them is the best thing in the World. Also, it's always great to break some windows.
I just don't get it anymore. I mean...supposedly these are smart people working on this stuff ... supposedly....
Dear Barry and Family,
Fuck off and die.
Love, Merkel
'The best engineers come from Germany'