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Russian Sanctions Leading To Economic Contraction... In Germany?

Tyler Durden's picture




 

It is no secret that the gist of western thinking has been that sanctions against Russia would pressure its economy enough to force Putin to finally crawl to the negotiating table, tail between his legs, and beg for western forgiveness. Call it the law of unintended consequences striking once again, because while Russia's economy continues to hum along (if only for now, something that can't be said about Ukraine's) and has forced the Kremlin to seek a variety of deals with China to avoid western isolationism, one other country may have been crippled far faster than Russia: Germany.

As Germany's Bundesbank reported overnight, in its latest current monthly report that was widely ignored due to the blanket media coverage of events in the Ukraine, if not so much in Gaza, "Germany’s economy may have stagnated in 2Q."

Who is to blame? Why the ongoing Ukraine conflict of course, and more specifically, the western response to it. As Deutsche Welle reported, "the institution said in a monthly report released Monday that second-quarter growth in Germany had likely slipped due to turbulence in Ukraine and Iraq and a number of public holidays which led to shorter work weeks."

More from Bloomberg:

  • “Economic growth in Germany markedly lost momentum in the first two months of spring,” the Bundesbank says in its monthly report.
  • “Activity in the construction industry declined, as expected, from very high levels in the winter that were bolstered by mild weather"

Yes, in Germany the "winter weather" was actually a boost to the economy. Sure, why not.

  • Says manufacturing activity declined, partly due to geopolitical tensions and timing of public holidays
  • "Considering that the services industry probably kept expanding, seasonally and workday-adjusted gross domestic product in the second quarter may have remained at the level of the first quarter."

Incidentally, nothing the Bundesbank has said is new, considering both hard and survey data coming out of Germany in the past few months have been abysmal. Yet one wonders: if indeed it is the Western, or rather make that American, response to the Ukraine crisis that is pushing Germany into yet another recession, how long until none other than Merkel says "Genug."

If nothing else, it certainly provides some context about the topic of conversation of this World Cup picture taken one week ago.

 

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Mon, 07/21/2014 - 13:24 | 4984302 TeamDepends
TeamDepends's picture

Angela's having contractions?

Mon, 07/21/2014 - 13:35 | 4984365 booboo
booboo's picture

Yep, she is finding out what giving birth to the worlds most powerful illegitimate negro baby is like.

Mon, 07/21/2014 - 13:38 | 4984377 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Satan's spawn?

Mon, 07/21/2014 - 13:58 | 4984464 BuddyEffed
BuddyEffed's picture

Seems like you can find people willing to blame just about anything for contraction, both good weather and bad weather, russia, etc, except the most obvious reason being declining inputs directly correlates to declining outputs. 

Mon, 07/21/2014 - 14:18 | 4984552 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

Should have flushed that turd in kenya

Mon, 07/21/2014 - 14:31 | 4984609 Victor999
Victor999's picture

That turd just won't flush....

Mon, 07/21/2014 - 16:49 | 4985171 Kirk2NCC1701
Kirk2NCC1701's picture

Technically... "Mulatto baby".  Dual Citizen, but still loyal only to one.

Mon, 07/21/2014 - 13:25 | 4984314 pods
pods's picture

Uh oh, Germany is the fastest horse in the glue factory. Does not bode well for the future.

Must be a war is on deck to cleanse the system.

pods

Mon, 07/21/2014 - 13:39 | 4984378 Professorlocknload
Professorlocknload's picture

'War on deck?'

Already financed, and ground breaking ceremony underway.

GD up!

Mon, 07/21/2014 - 13:27 | 4984319 Eyeroller
Eyeroller's picture

So ultimately, it doesn't matter how many planes get shot down (by whoever).

Any response that hurts a country's economy will be taken off the table.

 

 

Mon, 07/21/2014 - 13:31 | 4984343 Winston Churchill
Winston Churchill's picture

300 per day die in US hospitals from dyslexic presciptions.

Not as sexy as a SAM up the tailpipe, sure.

What makes the passengers on that flight so special ?

Your point was what again ?

Mon, 07/21/2014 - 18:37 | 4985548 disabledvet
disabledvet's picture

"All part of the plan" dude. You and I and Angela and Barak and Putin et al are all just part of the programming.

Mon, 07/21/2014 - 13:38 | 4984375 JustObserving
JustObserving's picture

Obama has killed more than 2400 in illegal drone strikes including women, children and wedding parties.  And American citizens. But, apparently, the Nobel Prize Winner has a license to kill:

More than 2,400 dead as Obama’s drone campaign marks five years

http://www.thebureauinvestigates.com/2014/01/23/more-than-2400-dead-as-o...

Mon, 07/21/2014 - 14:30 | 4984602 Victor999
Victor999's picture

Someday perhaps you will learn - it is ALWAYS the economy. 

Mon, 07/21/2014 - 14:30 | 4984603 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

"So ultimately, it doesn't matter how many planes get shot down in a war zone (by whoever)."

 

Fixed that for ya.   You will be receiving my invoice shortly.

Mon, 07/21/2014 - 13:27 | 4984321 JustObserving
JustObserving's picture

Germany has to hire a few economists from the US BLS and never have a contraction again.  Truth is so overrated:

Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams (www.shadowstats.com) provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware.

A reasonable correction to the understated deflator gives a much higher first quarter contraction. The two main causes of inflation’s understatement are the substitution principle introduced during the Clinton regime and the hedonic adjustments ongoing since the 1980s that redefine price rises as quality improvements. Correcting for excessive hedonic adjustments gives a first quarter real GDP contraction of 5%. Correcting for hedonic and substitution adjustments gives a first quarter real GDP contraction of 8.5%.

http://www.paulcraigroberts.org/2014/07/08/deteriorating-economic-outloo...

Mon, 07/21/2014 - 17:52 | 4985405 omniversling
omniversling's picture

Jim Willie on Germany's shift East: http://news.goldseek.com/GoldenJackass/1405540920.php

Mon, 07/21/2014 - 13:27 | 4984324 Winston Churchill
Winston Churchill's picture

Who says its unintended ?

Mon, 07/21/2014 - 13:30 | 4984337 youngman
youngman's picture

the Russian billionaires love the Mercedes Benz....bullet proofed of course...all black

Mon, 07/21/2014 - 13:44 | 4984397 Bioscale
Bioscale's picture

With a decent remote control and advanced features of the car computer... so called third party upgrades. The must love it.

Mon, 07/21/2014 - 16:29 | 4985097 Kirk2NCC1701
Kirk2NCC1701's picture

Upgraded by AMG, of course.

http://www.mercedes-amg.com/home.php?lang=eng

Mon, 07/21/2014 - 13:35 | 4984360 Dubaibanker
Mon, 07/21/2014 - 13:42 | 4984393 Herdee
Herdee's picture

I get the funny feeling that after all the propoganda has settled down and the press has had its fill then the U.S. will be forced to admit that it was actually Ukraine that hit the plane.It'll end up being another complete blunder by the State Department and Victoria Nuland's gang of nazi supporting morons.Putin is always one step ahead on diplomacy as you see.The Russians keep silent and release very important military information at a specific time.What you see from Obama is a quick few words on how dead bodies were treated and more direct threats and warnings to Russia.This goes to show how the U.S. will lose respect after the real information comes out.What's the CIA got to hide?Lots.You don't see U.S. military officials doing what the Russians do.

Mon, 07/21/2014 - 13:48 | 4984412 Abitdodgie
Abitdodgie's picture

"another complete blunder" They will NEVER admit to that , lets just get the nukes flying and get the reset going.

Mon, 07/21/2014 - 14:11 | 4984525 BorisTheBlade
BorisTheBlade's picture

Crazy talk. If current administration had the balls to start nuclear exchange then by virtue of their cluelesness it would've been done by now. Instead, they hide behind empty talk and hope the rest of the world doesn't notice. The scarriest part, they want to look relevant, they want to seem noticed and they have nothing to offer.

Mon, 07/21/2014 - 14:12 | 4984527 demoses
demoses's picture

Does CIA / US really need to hide? They control the MSM and with that they control the public opinion. Just today I was at work minding my own bussines as I everheard two collegs behind my back talking about stuff going on in Ukrain. I always thought they were not just two morons but the conversation just went "and did you see what they are doing to those corpses", "and the russians shoot them down... who will stop them?". I just took a deep breath and put my headphones on and played some music. It is just not my role to enlighten ppl. I'm not sure for myself that what I belive is real but hey you just need to keep an open mind and not just follow the MSM memo... Is this world mad? Are we the lunatics? Should I even care about others?

Mon, 07/21/2014 - 14:35 | 4984627 TheReplacement
TheReplacement's picture

Sure stay out of the conversation.  What does it matter that the majority of Americans are being propagandized to support an eventual war with Russia/China/Iran?  It's cool.  Just go along to get along.  Don't ask questions.  Don't make waves.  You probably aren't into "politics".  You probably aren't into determining how YOU will live in the future either.  That is someone else's decision.  You'll just get up each morning and do what they tell you.  Yeah, that's the spirit.

Mon, 07/21/2014 - 15:38 | 4984886 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

Is he asking for a nail gun?

Mon, 07/21/2014 - 15:37 | 4984880 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

Why stop with not caring for others?   Take it all the way and just hate yourself

Mon, 07/21/2014 - 16:34 | 4985115 Kirk2NCC1701
Kirk2NCC1701's picture

You COULD gently point out that > 80% of US media is owned by 6 corporations, and if they want a more balanced perspective on what's really going on in the world, that they check out some Alternative Media -- including and especially ZH.

Remember... "Evil prospers when good people remain quiet".

Mon, 07/21/2014 - 18:40 | 4985558 Monty Burns
Monty Burns's picture

When you see the MSM drop the story like a hot potato you'll know that the evidence clears Putin.

Mon, 07/21/2014 - 13:45 | 4984405 Circle of DNA
Circle of DNA's picture

This is insane! Watching Washington throwing its "allies" under the bus without slightest regard for their economies. In fact, ruining Germany economy is one of the objectives here. Following Polish example,  more free blow jobs are coming from EU...What a freak circus

Mon, 07/21/2014 - 13:50 | 4984428 Abitdodgie
Abitdodgie's picture

After the second world war Germany was and still is under the compleate control of America ( go look up the treaties) and so it nust di whatever we tell them to do , they are not soverigen.

Mon, 07/21/2014 - 14:31 | 4984615 trader1
trader1's picture

probably not for much longer.

Mon, 07/21/2014 - 13:57 | 4984469 Quinvarius
Quinvarius's picture

Soem people believe Obama has a masterplan.  But he is just arrogant, stupid, and lazy.  He thinks everyone is ganging up on him to ruin his plans every time he does anything.  It isn't his fault everything he does is a catastrophe.

Mon, 07/21/2014 - 18:42 | 4985568 Monty Burns
Monty Burns's picture

I'd say he actually has a master plan.  But it was written by his puppeteers and he probably hasn't read much of it.

Mon, 07/21/2014 - 20:07 | 4985899 silvermail
silvermail's picture

Washington has no allies. Washington has only vassals.

This is not a war against the terrorists. This is classic genocide of civilians, on a national basis:
http://cs616026.vk.me/v616026968/1b58d/SJ2fgUdxEuY.jpg
http://img7.tempfile.ru/13199/00306fdac2/3db765b77ecd66494d031ace.jpg

Mon, 07/21/2014 - 13:48 | 4984413 Shizzmoney
Shizzmoney's picture

Of course it affects Germany; Russian businesses don't buy shit from the US (unless its real estate so that they can skirt EU tax laws and money laundering).

Mon, 07/21/2014 - 13:52 | 4984435 alexcojones
alexcojones's picture

Germany better ask themselves:

Russia (gas) or NATO (False Flags by US & Israel)

And the Plot Sickens.

Whistleblower: U.S. Satellite Images Show Ukrainian Troops Shooting Down MH17

  "Award winning former Associated Press reporter Robert Parry has been told by an intelligence source that the United States is in possession of satellite imagery which shows that Ukrainian troops were responsible for the shoot down of Malaysian Airlines Flight 17."

Merk? Your move.

Mon, 07/21/2014 - 16:54 | 4985195 Kirk2NCC1701
Kirk2NCC1701's picture

+2.  For "And the Plot Sickens" (clever!), and the link.  Thanks, AlexJonesCo.

Mon, 07/21/2014 - 18:03 | 4985439 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

tatzechlich, You chose Germany;

Russian Oil

Or

Western Intermediary Turmoil

 

One keeps you warm on a cold Russian night, the other vaporizes you out of sight

Mon, 07/21/2014 - 14:03 | 4984448 BullyBearish
BullyBearish's picture

Russia, China, Germany...quite an assemblage to put a serious dent in the Luciferian's plans.  If only we could join them as well.

Mon, 07/21/2014 - 14:17 | 4984550 Fuku Ben
Fuku Ben's picture

Not

They're all on the same team. And they're hoping you'll follow any one of them for the change they believe in.

http://new.euro-med.dk/wp-content/uploads/Putin-datan-horns1.jpg

https://mindcontrolblackassassins.files.wordpress.com/2011/10/aaaamjmerk...

Mon, 07/21/2014 - 16:37 | 4985126 Kirk2NCC1701
Kirk2NCC1701's picture

And don't forget London (The City) as part of the equation.  The rise of Frankfurt as the natural hub for European banking is a Zero-Sum game for London.

Mon, 07/21/2014 - 14:06 | 4984507 Fuku Ben
Fuku Ben's picture

Just more global contractions in the birthing of the beast

Mon, 07/21/2014 - 14:16 | 4984537 novictim
novictim's picture

There is no doubt that sanctions are a two edged sword. 

But the unintended cut to the German economy is probably for the best.  After the Berlin Wall came down and the Russians pulled back due to economic collapse, the Germans did "the Christian thing" and started deliberately pumping investment money and aide into Russia. 

Was this more "Stockholm syndrome" or Christian "cheek-turn"?  Probably both.  I mean, the Russian troops who invaded at the end of WWII were forced to keep RAPE DIARIES to prove they had brutalized the German Population after their victory in 1945.  Germans in the West, hearing the stories of these Russian Animals gang raping their way around Berlin, made no significant protest.  They were guilt wracked after having the full details of the Jewish Holocaust exposed to them. 

Germans felt "We deserve this".  Which is sick as there is no such moral or ethical validity to group punishment (such as what is happening in Gaza) or ideas of “racial guilt”?

But this sense of collective guilt for what Hitler and their Reich did to Russia and the Jews has lasted until this current time.  How strong an impulse is this?  I think it is on the wane today with most Germans feeling they are not personally responsible for the past.  And of course they are not.

Yet there have been business opportunities in Russia as well and the astute German Oligarchs took advantage of the mood to help steer their investments this way as Russia embarked on the path to democracy.  Russian potential as a great European economic engine is real and the Germans have known that and helped foster this.

But now Russia has turned away from the democratic path.  It now has an influential  kleptocrat class that sees an elected dictatorship as being a viable "3rd Way".  Now its news media pretends that Russia is not part of the West, that it has no stake in the growth of the idea and realization of democracy with popular elections and the meaningful expression of the popular will.  This is most evident in the entire shutdown of discussions regarding CORRUPTION.  It would appear that Putin's cult of personality has branded anti-corruption groups as "Western Traitors"

So now the German oligarchs have to wonder whether investments in Russia will go the way of western investments into China.  A rich capitalist who "owns" a factory in China really owns nothing but a IOU that he might get it back when hell freezes over. 

Capital controls and the breakdown in the legal system in Russia leave all foreign investors vulnerable to extortion and the loss of legal ownership rights. 

So pulling out of Russia may hurt Germans but it will help Germany more in the long run.  The smart money will continue to flee Russia much as it has been doing in China.

Mon, 07/21/2014 - 15:23 | 4984833 Bioscale
Bioscale's picture

A very long bullshit.

Mon, 07/21/2014 - 18:50 | 4985593 Monty Burns
Monty Burns's picture

Germans felt "We deserve this". 

Yes, which was the main justification for concocting the Holocau$t fable. Tens of billions were extracted from that unfortunate devastated country and the shakedown goes on to this very day as new 'survivors' keep emerging.  The good news is that more and more people are doing their own research and no longer accept the Prescribed Truth.

 

Mon, 07/21/2014 - 14:20 | 4984559 Fix-ItSilly
Fix-ItSilly's picture

Yeah, yeah... because it can't be European economic stagnation and decline in the PIIGS and France. Nor the high Euro value. It has to be... sanctions.

Mon, 07/21/2014 - 14:21 | 4984564 Canucklehead
Canucklehead's picture

Nothing says Russia is on their own like reading these comments.  Imagine, sharing a room with these mental midgets...

Mon, 07/21/2014 - 14:27 | 4984588 HamRove
HamRove's picture

Prediction - Germany removes itself from the EU, it signs uber deals with BRICS, tells IMF to walk off a cliff.

France does the same.

NATO = Toast 

Mon, 07/21/2014 - 14:50 | 4984701 HamRove
HamRove's picture

Swiss, Chinese Central Banks Enter Currency Swap Agreement

http://www.nasdaq.com/article/swiss-chinese-central-banks-enter-currency...

Mon, 07/21/2014 - 15:09 | 4984786 novictim
novictim's picture

It is always funny to watch folks fantasize about a future that will never come to pass. 

But I recommend you now focus on getting democracy back on track in Russia.  Come on, you are embarrassing all of Europe with your nonsense.

Start by getting State news services to do real jounalism and start critisizing government.  Corruption is your biggest enemy, not Ukraine.

Mon, 07/21/2014 - 16:43 | 4985147 Kirk2NCC1701
Kirk2NCC1701's picture

If it were me, I'd move the UN to Switzerland. 

Geneva?  Geneva is great any time of the year.  Know this first-hand.

Mon, 07/21/2014 - 14:29 | 4984595 surfsup
surfsup's picture

Just as in the early century Germany IS a target of this...    Shut down German industrialism or _____  superiority "might" be diminished...   (Hint: not a nation but an "interest) 

Typical monkey mentality still holding sway as this atttemped synarchy in Ukraine was/is not only meant to slow Russia's industrial might but was/is also targeted at Germany also.

VolksWagon DID come out with a sporty 300 mpg car no?  http://www.extremetech.com/wp-content/uploads/2012/12/VWXL1-1024-640x426...

Not allowed in the US (cough cough)    Oh you didn't hear about that with the ball game on?  

They even whipped up a single seater for export to China!  258 mpg!  

http://www.examiner.com/images/blog/wysiwyg/image/supermileage.jpg

China IS in a shit storm smog wise... 1+1 = ?     

Ukraine was/is an easy syncarchy target as WW2 battles did not end there until 1952.  Fact.   Long standing division ready to be artificially "enhanced..."  

But since the regular troops under Porky are getting their assess handed to them by the east, it won't be long until their foreign handlers start to appear as manipulators for purposes other than expected.   Think Vietnam in terms of "no clear directive."    Half life of a few months tops as the killing just doesn't make sense after a while to the grunt on the ground.

Especially when they find out no one actually gave the order for the shootdown but an order through the interior did come through -- how strange the Spanish air controller thought that the order did not originate through military channels as he began tweeting these strange events he was witnessing?   Or was that a man in the middle attack? A false command inserted into the command structure by design?  Clearly would not be the first time...   hmmm...

http://slavyangrad.wordpress.com/2014/07/18/spanish-air-controller-kiev-...

 

 

 

 

Mon, 07/21/2014 - 21:41 | 4986244 goose fat
goose fat's picture

"It will start in Europe.

Your banking system will be the cause and Germany, once again, will be involved in this tragedy as it was on the last two occasions.

When it commences, much will be over saving the economy, and catastrophe will affect Greece, with much fallout in France.

The Middle East will also be involved with Israel and Iran at war and Syria will play a serious part in the downfall of Egypt."

http://www.thewarningsecondcoming.com/second-seal-world-war-3/


Mon, 07/21/2014 - 15:30 | 4984818 Sauerkraut-Opinion
Sauerkraut-Opinion's picture

ZH: "If nothing else, it certainly provides some context about the topic of conversation of this World Cup picture taken one week ago."

....it's not that wrong: Transmisson time was very late (until 02:00 o'clock in the morning), people were permanently tired (partys & red eyes everywhere), many took vacation days, some others closed their whole business on matchdays (e. g. I experienced closed doctor offices, short note on the door: "closed during German matchdays") at least overtime hours were reduced to a minimum. World Cup and constantly sunny weather went side by side....this is a pretty dicay mixture for GDP but excellent precondition for a successful barbecue season...

Mon, 07/21/2014 - 15:42 | 4984900 HedgeHammer
HedgeHammer's picture

Doesn't Russia have a Central Bank? Is that Central bank not controlled by the IMF? Whom do you suppose has controlling shares in the IMF? Tthe question everyone should be asking is, is this not going according to plan from both sides? You cannot usher in a new monetary system and gov withought first discreditting and destroying that which is already in place.

Mon, 07/21/2014 - 16:44 | 4985139 atthelake
atthelake's picture

Everything Obama does is to destroy America and Americans. The intent is, not only to weaken Russia, but to weaken America, as well. Apparent unintended consequences are, really, intended consequences.

Mon, 07/21/2014 - 19:45 | 4985799 novictim
novictim's picture

Obama is not about anything but Obama and the advancement of his family.

If you start with this understanding then the logic of what he does and does not do tends to make more sense.  Oh, and of course, realize that the USA is run by, and for the interest of, wealthy oligarchs and corporations now.  That is the other key to making sense of the USA in 2014.

But is it worse in Russia today?  Clearly yes. 

Let's work on fixing Russia and the USA, k?

Mon, 07/21/2014 - 16:57 | 4985200 Racer
Racer's picture

4m

UNITED STATES OPPOSES FRENCH SALE OF AMPHIBIOUS SHIPS TO RUSSIA -SENIOR ADMINISTRATION OFFICIAL"

 

WTF, what with the US bully complaining about Chinese ships in international waters and now that? The US bullyboy tactics are getting far far worse than ever. They think they own the world.

Clear off bully, the world doesn't want or need you

Mon, 07/21/2014 - 17:07 | 4985247 Kirk2NCC1701
Kirk2NCC1701's picture

So, unless Germany stops trading with Russia and China, Israel will stop buying German cruise-missile subs for its navy?

Is zat vot zey are sinking about?  https://www.youtube.com/watch?v=gh5xu35bAxA

Mon, 07/21/2014 - 17:55 | 4985408 viator
viator's picture

If you liked Cold War 1.0 you'll love Cold War 2.0. Already people are ecstatic about it.

Tue, 07/22/2014 - 06:51 | 4987073 AdvancingTime
AdvancingTime's picture

 Europe has reason to be unexcited about a possible long and expensive conflict. While still trying to recover from a recession Europe would face fuel shortages and a massive spike in the price of natural gas. Germany the main growth engine of the Euro-zone would be hit the hardest.

Currently Russia supplies much of the gas used in Europe, this gives Putin a great deal of leverage. If an actual ground attack were to occur few see the Russians as likely to rollover as other armies have when America approaches. In reality America has few military options in Russia's backyard unless it has the backing of a full and enthusiastic NATO and that is very unlikely. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/07/putin-holds-all-cards.html

 

Do NOT follow this link or you will be banned from the site!