Is German Anger Finally Coming To A Boil? Even Local CEOs Say Time To Exit Euro May Have Arrived
It would appear that the German public (and political class to some extent) are beginning to see the European project in the same manner as we described back in July. As the increasing burden of saving the eurozone from its own excess falls on the shoulders of every Tobias, Dirk, and Heike taxpayer in Germany, even industry leaders, such as Wolfgang Rietzle, the CEO of Linde, this weekend according to Reuters, are suggesting a line in the sand has to be drawn and that "if we do not succeed in disciplining countries then Germany needs to exit." This has been very much a view we have held for months now that instead of the periphery limping away one-by-one, the very core of the foundation will simply decide enough is enough or as Reitzle notes (among many other critically insightful comments) "the willingness of countries to reform themselves is abating if, in the end, the European Central Bank steps in." This morning Germany's FinMin Schaeuble added to the potential separation chatter with his comments, via Bloomberg:
- *SCHAUEBLE SAYS ECB AS LENDER OF LAST RESORT WOULDN'T CALM MKTS
- *SCHAEUBLE SAYS JOINT EURO REGION BOND SALES NOT A SOLUTION
Hardly reassuring given the dreams of every GGB owner and BTP-exposed insurance company are banking on the ECB cranking the presses to 'secure' nominal returns in the real world. The EURUSD has opened down 40 pips or so on a slow Sunday afternoon as we remind hopeful investors (and the German public) of our comments from last July (which seem even more prescient now with the AAA downgrades and increasing reliance on EFSF and ESM mechanisms placing more burden explicitly on German taxpayers and "in doing so may have jeopardized anywhere between 32% and 56% of its entire annual economic output".
Reuters: Linde CEO says Germany Should Mull Euro Exit
Germany should consider leaving the euro if efforts to impose fiscal discipline upon indebted euro zone countries fail, the head of industrial gases firm Linde (LING.DE) told German weekly paper Der Spiegel.
"I fear the willingness of crisis countries to reform themselves is abating if, in the end, the European Central Bank steps in," Linde's chief executive Wolfgang Reitzle was quoted as saying.
"If we do not succeed in disciplining crisis countries, Germany needs to exit," said Reitzle who was previously a board member at carmaker BMW (BMWG.DE) and head of Jaguar and Land Rover.
Asking Germans to pay more than 50 percent taxes to help fund other euro zone countries will erode the will of the German electorate to support rescue measures, Reitzle said.
Although this scenario is not desirable, he felt that German industry would survive working in a new currency.
"Of course it would lead the new currency - Deutschmark, North-euro or whatever it is called - to appreciate in value. But it would be by a lesser amount than feared," Reitzle said.
"Although this would lead to higher unemployment in Germany because exports would take a hit, pressure would increase to become more competitive."
Reitzle said the euro zone is unlikely to break up completely but Greece is not in a position to service its debt.
"The country is not in a position to restructure itself in such a way that it can remain in the currency union," Reitzle said.
"In the medium term Greece needs to exit. And the writedowns on Greek debt will not be between 50 to 70 percent, but in the end will be written down by 100 percent," Reitzle said.
So long as Greece remains in the euro it needs to be supported. "All in all this is a 500 billion-euro problem," Reitzle said.
Structural reforms need to continue elsewhere in places like Italy too, Reitzle said.
The year of destiny for the euro is not 2012, but three to four years down the line, Reitzle said.
Upon being asked whether Linde has a plan B to cope with a complete break-up of the euro zone, Reitzle said 'no'.
"Even if we had a recession for years in Europe, it would only impact 30 percent of our revenues," he added.
As the ESM is accelerated and deposits/investor-cash flood into German banks and bunds, the risks of subordination of existing sovereign bond holders and devaluation from non-German-euro-holding deposits is perhaps too much to bear for investors/savers and leaves the German politik, CEOs, and public at a critical decision point in terms of extending the socialist empire experiment (at their expense) or going it alone facing pain now for a brighter future - the Linde CEO seems convinced (and Schaeuble seems less than inspired by the euro-bond-based fiscal compact solution).
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Germany needs Obama to pay them a visit ASAP and deliver a hope and change speech!
Greece is what the U.S. will become if Obama and the dumocrats win nov 2012.
Greece is what the U.S. will become no matter which one of Wall Streets puppets win nov 2012.
There, fixed it for ya.
Solid fix.
why the hell did they let a shit nation like Greece into their currency union in the first place??
There is a qualitative difference between the wops and the krauts. They know it and have known it for a long time, no matter how hard the MSM tries to suppress it. All ethnic groups are not equal.
Nobody complained when the EU economy was riding high and Greek big spenders soaked up the output of export nations like Germany. Easy money while it lasted.
Goldman Sachs helped them fix their books to meet EU entry criteria.
http://www.spiegel.de/international/europe/0,1518,676634,00.html
"All ethnic groups are not equal."
How long did it take you to figure that one out?
Some people still haven't figured it out. If you have figured it out - and are foolish enough to say so - that makes you a racist, apparently.
For geostrategical reasons:
Greece = Southeastern flank of NATO
"All ethnic groups are not equal."
Greek Untermenschen, eh, Trav?
You are talking about the ethnic group right at the foundation of your civilization.
Ethnic groups do adopt new cultures, you know.
Really? What about the Republican candidate Romney? Will he not reverse the Obama socialist agenda and return America to free enterprise, low taxes, prosperity and world domination?
Romney is Republican, they can and will save America. Everything will change the day Romeny is sworn in. He is no puppet of "the street" nor will he cave in to all those willfully unemployed bums who refuse to get a job. He will stop the greedy old people form taking all that social security money and instead turn that money to good account in increased military spending.
America is headed for brighter days under the great republican president "Romney".
Romney is 'Obama-Lite'.....Ron Paul is our ONLY hope. Huntsman would be better than Romney...
No, our only hope is that enough of the populace become familiar with the reasons why Ron Paul is so popular amongst learned people.
Until I hear the phrase "fractional reserve banking" on a daily basis in real life we are still doomed.
pods
If I ever hear rehypothecation on a daily basis Ill nut myself.
Mr. Huntsman is now looking for a different gig...
An a new horse is breaking out of the pack and is moving up on MDB fast....................
Good tongue in cheek--dear Gawd thats what I hope it is!!! Milestones
Bwahahahaha...you're joking, right?
The Republicons and Decepticrats are two sides of the same coin, the Leviathan Party.
Jack your kidding, right?
I laughed so hard reading that I nearly crapped my pants. Romney = AFP (Another Fucking Puppet); parts are interchangeable with the Obamatronic '08 model.
I think what you meant to say was: "Greece is what the U.S. will become no matter which one of the Wall Street puppet parties wins in nov 2012 unless it's Ron Paul in office."
Obama wins we become Greece sooner. Romney wins it will be delayed a year or two.
We are already Greece and worse.
We have lots of bombs.
Mittbush Romnobama is a change of pace?
The US, UK, Japan are in much worse state than Europe will ever be.
And this won't change for a long time, no matter what obstacles the american or british financial industry tries to implement for us.
Note, that e.g. Italy is in far far far better state than what is reflected by american and british crowds and media.
Reading knowledge helps, sometimes at least.
Greetings from Vienna.
Who cares about these morons. Let's trade, man. Enjoy this shit: http://t.co/Itk2Q1v8
The Euro is dying an ugly and painful death.. WHO KNEW!!?? LOL!!
He did deliver "Hope & Change" pre-election in Berlin
He didn't deliver "Hope & Change" post-election..
..it was more like "More the Same.... only Worse"
Ho hum, that's politicians for ya
I remember that one. He was very popular over here. He had no achieved anything. Did that matter? But as a Berliner I know what they were hoping for back then. Another Kennedy.
I think Obama could've won the election over here too. Not that Merkel would be the better candidate. That's the dilemma. We Germans don't have a good candidate. At least you have Ron Paul and a choice. Me? Nothing. Just the same crap over again.
I will probably vote for the Pirates. But even in that case I'll gain no hopium in exchange. What a country! Ha! I guess Robotrader would love it. All these record numbers in the MSM now - and they matter nothing and will matter nothing and it will dawn upon the ignoro.
Warning PY !
Pirates party plans to forbid trading of derivatives
... and, of course, Greetings to Berlin from a former FU student
Followed by Timmy to kick ass and get those Krauts in line
Not too tough when you are holdin' all of the Krauts gold.
yeah, whatever Obama touches turns to shit
Fucking Double post.. Or just lend Merkel his TelePrompTer!
Dear ol Wolfgang Reitzle is not exactly the most representative source, he made aquisitions in the UK and is cherishing his contacts with the Guardian. The way he posed it is also telling...
But hey, it's The Guardian, it has to cater to it's reader's tastes and prejudices - one of them is that the diabolical EUR has to die...
Newsflash: The still magnificently productive Germanic people aren't gonna let any more FUBAR foreigners play 'Let's Bury Our Carbunkled Schnitzelgrubens Up Their Heinies' without a hefty reciprocal price. Who in phuck can blame them? That gig's kaput.
Ghordius, have you ever met/read the Guardian newspaper???
a bigger bunch of Pro-EU progressives/Marxists you could never meet
The British version, yes, sometimes, the American version, never.
"Pro-EU progressives/Marxists"? A bit more moderate than this I'd say. The convictions I am writing of are National, though. As I find out whenever I am on dear old Blighty...
great metaphor for the global economy:
http://media.tcm.ie/media/images/c/CostaConcordiaSinking2_large.jpg
That's the collateral backing Italian bonds. Haha.
What the price tag on the Ship?
And which company owns it?
An asset that big will be on someones books, and with hyper-rehypothecation in the City of London its likely to be an asset backing a lot of paper.
Please correct me if I'm wrong and the shipping industry operates differently, As this is new to me. Thank you of MF Global.
Q. Why does the new Italian Navy use glass bottomed boats?
A. So they can steer clear of the old Italian Navy.
Germany being the rock; Satellite nations the ship of fools?
"Shipwrecked off the Island of Ponzi"
You will succombe to German discipline, now where/when have we heard that before.
Meanwhile in Hungary the EUSSR flag gets it.
http://storyful.com/stories/1000018731
LOL - and what kind of reaction is this supposed to cause?
It's not one of the holy ones...
they're shouting "Burn it, burn it, burn it" ...awesome
the EU flag should be Commie red with a fascist Nazi symbol in the corner to be accurate ..Brussels is a toilet of humanity, can't wai for the shithole to collapse
..and I'm down in Budapest tomorrow, hope to burn one myself if the protest is still going
Don't forget to go to the spa baths. Really worthwile.
Will you be spending more time in Buda or Pest?
(sorry, I couldn't help myself. History freak, ya know.)
gnashing of teeth... LOL
ps i just boiled a hungarian flag as an act of cruel revenge!!
you monster!
Germany's not leaving the Euro. The new German currency would be crushed by all of Germany's banks going under, which are very intermingled with the rest of Europe and with the US for that matter. German bankers and politicians are not yet ready to give up control over the printing press.
ThesilverJournal.com
You are mostly correct. The only thing I can see causing the banksters in Germany any grief is if the people rise up. Don't underestimate the masses, especially the German ones......
Much cheaper for the Fatherland to recap their banks and start them off again purged of toxic assets, than to indefinitely backstop the welfare states of Europe.
"Don't underestimate the masses, especially the German ones......"
I'd argue it's irony/sarcasm.
There haven't been any 'German masses' after WWII!
Agree broadly. Moreover, even if the Germans would contemplate leaving the "lazy perifery" on its own, they would never make any unilateral moves. They would co-ordinate with the Netherlands and that would end up meaning a new Euro that would surely include France.
They would sell the move as "temporary" (10 to 15 years?) and promise to create and test the new institutions that a reborn future eurozone would need.
This is the fracturing dynamic that is occuring in the USA as well among the Republican party. The problem for the banking elite is that they do not represent 100% of the elites. There are dozens of CEO's and industry leaders who are finding themselves at odds with the cartel. Ultimately as power begins to consoldate towards the bankers -- there will be an increasing number of non-banker elites who find themselves at odds with a smaller and smaller set of insiders. At which point there will only be two ways to go: Towards singularity (autocracy) or systemic breakdown. Let's hope it's the latter.
WHAT!? That's outrageous! Everybody knows that "elites work together" in complete harmony and secrecy to create the One World Government. They're only self-absorbed, self-serving, egotistical, utterly ruthless prickasauruses to the rest of us. Haven't you been reading the internet lately?
They believe in Social Darwinism. When TPTB roll one of their own it is because He/She was weak and didn't belong.
The globalist "elite" are very small in number, the rest are hangers on, the hired. To clarify what I mean... If a person works for a living, then their the hired help. If your talking TPTB then your talking way less than 0.1% of the population. Its a very narrow pyramid at the top.
Imagine it is endgame and the elites have made it to their life rafts. The Clinton's, Bush's and Obama's among them. Quicker than you can say, "The only good politician is a ..." and those dudes would be shark bait. What the hell use would a new world have for crocked old world politicians? None.
Don't think they will. Germany is the country that has benefited the most from the Euro, and if they leave first, it will be seen as a confirmation of what many Euroskepticists have been claiming all along. Namely that the Euro was just a wealth transfer mechanism from the periphery to the center, and a vehicle for the banks to scoop up liquidity at almost 1% interest rates and lend it back at 5%. There will be a lot of spite, trade barriers and import tariffs will set overnight, and Germany will find itself enclosed by a Europe feeling cheated. Germany is not very AAA when the rest of Europe slaps something like 50% import tax on German imports.
Disagree. Germany managed to be the world's exporting powerhouse prior to the Euro. What's changed? No doubts about it, the Euro has been very very good to them but at he end of the day Germany exports to more than just southern Europe and Ireland and really that's where the contagion lies. Take it down to a pure profit / loss scenerio is it worth watching your economy implode to save a few countries who can't afford your exports anyway?
Agreed Desert Irish - problem is the exposure of the German banks to those countries. Maybe what will happen is Merkel will just back her banks, and let the others go to the wall.
According to German officials Merkel has made plans to recapitilize German banks in case of a Greek default as of early September. The mechanism is already in place. We all here know Greek is going to default and it's becoming increasingly obvious to even the most retarded EU politicians we are not talking a 50% haircut here. Germany's banks are screwed regardless. The pains coming it's just a matter of short term pain versus long term pain.
http://www.bloomberg.com/news/2011-09-09/germany-said-to-prepare-plan-to-aid-country-s-banks-should-greece-default.html
"...Germany managed to be the world's exporting powerhouse prior to the Euro..."
i say bullcrap,
go check the German net exports PRE-EU and come back, i dont even bother to post a chart for you.
It's wrong to believe that we depend entirely on any country or region in the world. Our trading partners in the EU are of great importance - no question about that - but we also export things to the rest of the world and have industry leading companies.
If you think that the ordinary German benefitted - you're wrong. It's absurd but most Germans have lost wealth during that time. Why is that? Well, because they work for less money now. And since they have less money (some lost 22 % of their income since the introduction of the Euro) in their pockets they spend less than what they've spent before (including foreign goods). Our domestic market is in shambles. The little companies are dying and the big ones are getting in their place. You also see this in the UK... (I love to watch the UK and their MSM - we are not that different - like cousins)
The MSM here is applauding over and over and over about this fact (Cheap work = more people are working = winning!). Of course you don't read too many critical articles about the (entirely) export driven country and all the negative aspect of people getting poor while the companies are having the best time in more than thirty years. Remember: Companies are people. Of course, the German ignoro is not that different than his American, English or Chinese counterpart. And trust me, I am German, and there is one thing that is true: It's German anger. Furor teutonicus. You are supposed to suppress anger. If you want to follow the Leitbild and be a good German. And that might work for a time. But beware of the volcano and anger boiling over. And with every day we are getting closer to that.
X-actly, esp. regarding the loss of wealth for "Otto Normalverbraucher" (Joe Average).
Despite consumer prizes that doubled (some tripled), wages seemed nailed to a 1999 level.
WILL RETARDS WHO HAVE NEVER LIVED IN GERMANY PLEASE STOP REPEATING THE RETARDED PHRASE, THAT "GERMANY" (IMPLYING "THE GERMAN POPULATION") HAS BENEFITED FROM THE EUR?
THE GERMAN POPULATION IS NOW 66% OR MORE POORER, THAN PRE-EUR. YES, THAT'S RIGHT.
And this is NOT counting defaults of the nations that got bancrupted by the eur, just so you know!
Got that you fucking retard morons? Yes? Kay, thanks for being "smart" enough, to differentiate profits of multinationals from profits of nationals (kinda high bar in terms of intelligence nowadays, i know!).
P.S.: Yes, i'm pissed. You see, i just read a few "germany has been the biggest benefiter of the euro"-posts/articles a day... and every few weeks, i get pissed enough to bluntly and with a lot of allcaps and bold state the actual facts, to non-europeans..... where instead, i should probably write more of such posts with less allcaps and less bold.... but then again, given the onslaught of MSM propaganda and tools who repeat them, that would become an unpaid fultime job, and contrary to banksters and CEOs of multinational megacorps, i still need to work to pay my rent, you see?
At the expense of raging your retarded perception of the economy in aggregate versus wage decline (read: cheap-er Labor), let me repeat.
German economy was ALREADY fucked up before joining the EU/EUR in 1990s with the collapse of Berlin Wall and financing YOUR BROTHERS' at a time where DM was still strong (FX is all bout relativity, you moron), and GERMAN NET EXPORTS (pun very much intended) were NOT GOOD (read: BAD) on a high unemployment, low productivity and high wages along with HUGE UNFUNDED PENSION LIABILITIED (read: your fucked up future retirement wage, moron)
Come EU, come CHEAPER currency along with GOVERNMENT ENDORSED (read: your effed up GERMAN government imposing on its corporates and labors to not to jack up the wages so that government will guaranty you guys will keep the jobs, in return, cappiche??) and bunch of other policies IMMENSLY helped the GERMAN economy to tremendously improve its NET EXPORTS, lower the unemployment.
Yet, while these were helping German GDP/Economy and relatively lowering German Debt/GDP ratio with bunch of other what have you's, the labor felt poorer and poorer each day, because the cost of living DID NOT change much for the poor labor as most of everything simply had gottn priced with still the same numeric numbers with only a change in the currency symbol, which would be great normally, had it been the case that salaries got adjuted notionally at 1Dm = 1.5EUR, but no, it stayed the same number just like the costs.
Here we are, ten years later and wages never got a bumped while cost of living and inflation had eaten up that said wages
Now go fuck you self!
Irrelevant, because my point was NOT, that everything was wonderful pre-eur, but instead that the eur-phase involved an additional impoverishment so vast, that any historian reading such numbers must think "how the hell did THAT not result in civil war? This is completely insane" (how else would an outsider expect a population to react, that get's it's living standard cut by 2/3 in just ten years???).
Liar. The actual problem behind unemployment has NOT gone down at all! What instead happened, is that together with the introduction of the eur, the agencies that deal with unemployment got completely overhauled, just as the methods of how unemployment is MEASURED (sounds familiar, US citizens? If you thought your gov is fudgeing numbers, then imagine what your gov could do, if it would completely replace the agencies that deal with unemployment, with something else). Secondly, additionaly jobs were aquired by plain wagedumping..... that is: stealing jobs from neighbour countries, by engaging in a price war (what, you thought those PIIGS have such high unemployment just because they don't want to work? You really believe that racist shit?)
So in short: Germany did go for number magicks and becoming a mini-china. Result being, that the overall wealth of the population actually DECLINED..... BUT you have a LOT of ridicuously discounted mcdonalds jobs now, as well as people in practice doing the work of what normally would be distributed across 50 manhours per week. Or in short: We're now working, eating sleeping 7/24 just to make pay existencial living costs..... while the domenstic market has been ruined in just 10 years, just as the job markets of our neighbours. Our overloads have made out nation as a whole behave like turbo-slaves that killed most fair market participants in entire europe! Germany THE destrutive economic force in europe now, racing everything to the bottom.
But yeah, i'm sure you asshole think that this is a good thing! When in fact, it is WHY the rest of europe is broke now, and it is why germany now a nation of rockbottom pseudo-china slaves. WE HAVE SOLD OUT EUROPE TO BANKERS AND MEGACORPS!
Please, for the benefit of mankind GO KILL YOURSELF, ASSHOLE! GO FUCKING DIE YOU PSYCHOPATHIC ASSHOLE!
Slavery is freedom! Impoverishment is wealth! GO FUCKING DIE YOU PIECE OF SHIT!!! And make sure that someone burns your toxic radioactive corpse, and burries it 10km below the surface.
GDP == ECONOMY ?????
AHAHAHAHAHAHHAWAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!!!!!
Go kill yourself already, BANKSTER BITCH!
Tobias, Dirk, and Heike do not have to worry..
The US has Ben to make sure that every Tom, Dick and Harry over here will pick up the slack.
Barry and Timmay have said as much.
Gee, it's great that everybody is on a first name basis.
UST yields to move lower this week, can you believe it? The US had to not go through with the joint war games with Israel because it is broke. This is the first time this admin has uttered the words, especially considering there has not been a budget since Hopey took office. USTs have been getting dumped on the open market for months now. This all seems to correlate but I can't quite put my finger on it?
What is the real reason the US stepped off the pedal concerning Iran? Was it China threatening to dump even more USTs? Is the trap set for a false flag? Maybe the US wants to watch Europe burn a little longer before they usher in a war with Iran, because then USTs will remind priced high.
SO many variables now. The string is epically tight. Anyone care to push on it? Didn't think so. Not yet anyway....but give it a few weeks and we will see how everybody is doing.
Until then, it's all priced in!
2 points made by posters on the thread about this stood out.
1st, the US hasfilledd the ME with military assets in preparation for an excercise. Now they are there, why bother with a magazine depleting exercise? Assets are in place, full of dry powder-job done.
2nd, The US is slapping isreal on the wrist because Mossad framed the CIA for the recent murder of an Iranian nuclear scientist.
It's either dump the euro or shred their wealth by "loaning" tens of billions of dollars to the failed concept that is a monetary union between European States.
"failed concept" ? Are you just parroting or is this a cogent conclusion?
The bloody thing is *working as designed*.
Yes, well, you have me on a Bildeberger technicality then, don't you? Touche
No, I am seriously interested in what you think. What is wrong with the bloody eurozone that makes you think it's a failed concept? Because it has been often discussed at Bilderberg meeting?
Trying to blend 17 disparate nations only 66 years (within three generations) after the last World War - fought over many of the same nations and interests.
The Eurpean debt load is unsustainable. The given solution to the problem is to create more debt. Germany will shoulder this debt burden because they are still AAA (in a race to the bottom, this is too bad for them). The other States will need haircuts even then of 50% to 70%. Bond holders will get run over, all while the Central Banks print the debt issued to cover the old issuances.
The can kicking is getting a little late. It is almost midnight, Europe missed its supper, it is snowing outside, and they forgot their coat. Would you stay outside kicking the can and risk an illness, or go inside, eat some soup, and sit st the drawing table to find a new solution?
If they stay with the Euro they will shred their wealth and savings. The dialectic pits this againsts exports, but if someone wants a VW, they will buy it if it is $16k or $20k. Exports will stay intact, even if they go down marginally. What is important for Germany, and all Nation-States, is to have a currency that trades with value (intrinsic value or not, as long as the game is played). Germany, and EUrope for that matter, are facing either going back to each Nation-State having full control of their money supply, or letting it fall in the hands of a cabal known as the ECB. So what is the right choice here?
Hmm, doing what is easy vs. doing what is right...gonna have to go with the definition of insanity on this one.
Separation of monetary and fiscal policy into distinct autonomous entities is a massive fail. The national ability to create debt will always trump the centralized mandate to manage the monetary union. Europe cannot possibly work as currently constructed.
A countries wealth is it's infrastructure, productive and human capital ... not some pieces of paper, or even pieces of gold. They don't shred their wealth by making loans, they just don't use it for their own citizen's benefit. That's what it means to run a trade surplus.
Really this isn't something new, it's what they have been doing since the formation of the Euro. Nothing much has changed, the debt offsetting the trade surplus was known to never be repaid 10 years ago, it's known to never be repaid now. Why should they stop now?
If they did decide to dump the Euro and start running a trade balance they would still need massive wage inflation internally to not suffer a catastrophic deflationary collapse. Wage inflation in today's day and age is highly unlikely, the industrial leaders are no Henry Ford's ... and government is owned by them.
Of course that would be assuming the rest of the EU allowed to let them stay in the single market ... which is highly unlikely, Norway gets to do it because they have oil but Mercs are infinitely less powerful leverage than oil. More likely if they tried to take the initiative to dismantle the Euro they would be kicked out of the European single market and face massive trade barriers as someone else already said. They would be up shit creek without a paddle.
So you discount savings. Why? Why when it is in nature to save? Animals do it, and so do we. We work and save for a rainy day, or to further developement. How would we have built the infrustructure if it wasn't saved for? How would we have labor if their wasn't something to pay? You are discounting savings to your own peril.
And your arguement that 'this is the way it's been so it will continue' is flawed logic. Just because something is in movement doesn't mean it won't stop. Could the downgrade serve as a force to change the direction of the Fiat Ponzi (something that is ficticious by nature anyway)? What a bout a war? Or a decision to change monetary policy?
As far as them leaving the Euro, they would go back to a currecy that was tronger, the Mark. So the labor force will be paid in Marks, which were worth more than Euroes. There is your wage inflation.
I don't discount savings, but it's all just part of the individual incentives which make capitalism work ... a means to a cause. A means to a cause which stop being relevant at higher levels, which in fact become dangerous.
Germany as a whole "saved" by buying foreign bonds ... which unlike personal savings in the end did not represent deferred consumption at all, since those bonds are now going to be defaulted upon. By "saving" the Germans dug a hole for Europe, their "savings" made the Greece profligacy inevitable.
I'm not saying the current situation will continue, I'm saying the current situation is not fundamentally different to the situation 10 years ago ... nothing has changed, so there is no reason to hurry into splitting off. In the mean time all they are eroding is paper and not wealth. That's all savings are at a national level, so much paper.
I guess the only thing I disagree with you on then is that one can not save with gold, because I can agree that buying debt is not exactly saving when the debt has no intrinsic value in the first place. For what it is worth, nothing can have a number arbitrarily put onto it. It is all a game, after all, but I like your points on infrustructure and labor capability. Still, as much as infrustructure does have value, it is a depreciating asset. And labor is one that is not static (the labor force can grow and shrink), and therefore the only thing that keeps its value, whatever value means, is PM.
Marco
The European Common Market was around and worked successfully, long before the introduction of the common currency, the euro. Sometimes lending your brother-in-law your credit card, doesn't work out.
And if the Wealth of nations is a function of trade surpluses, and I don't disagree with the concept, then what future does a nation have that is running a $1.5 trillion operating deficit and a $500 billion trade deficit ?
These deficits represent 13% of GDP against purported GDP growth of 2%. With these deficits carrying on, or increasing, well into the future ?
The common market is highly successful, but that's exactly where the danger lies for Germany ... EU big wigs have already said that if Greece would try to get out of the Euro they would be kicked out of the EU as well. Why should Germany expect any different? As a luxury goods producer they just don't have that much leverage.
I'm not saying the wealth of nations is a function of trade surpluses ... I'm saying capital (real capital, not paper or even pieces of shiny metal) and human/natural resources are a Nation's wealth.
The US is special in that there is are an huge factor not included in it's official trade balance ... a lot of it's debt is bought to buy protection (both in the nice sense and in the Mafia sense) from the US military.