NP - Germany Won't Budge on Austerity: Economic Suicide is Character Building

[Kai Frederik Lorentzen]

> Is France, Italy, Spain ...doing enough?

Spain? Yes. Same for Portugal and Ireland.

But Italy and France? Definitely not!

When the ship goes down it will take place there and then spread first 
to the rest of EU-Europe and then to other regions of the global 
economy. The large home market of the US would probably work as a buffer 
here to avoid the worst consequences for at least some time.

To keep this balanced: The new German federal government, a coalition of 
CDU and SPD, is damaging the reform measures the Schröder administration 
put through by enabling easier ways to go into early retirement plus 
pensions for mothers, which both are counterproductive presents to the 
aging voters.

At this point a personal statement seems adequate: I do not sympathize 
with banks. The role of the big banks in the Euro crisis - Goldman Sachs 
helped Greece faking its statistics to get into the Euro zone, and the 
current president of the ECB is a former employee of this beautiful bank 
house - is highly ambivalent. And this is not the only problematic thing 
about banks in the world history of the last 200 years. Perhaps - just 
yesterday I read an article saying that economists and even some bankers 
themselves started to think about this seriously again since 2008 - the 
basically simple idea of Freigeld would be a better way to handle the 
question of money:

http://en.wikipedia.org/wiki/Freigeld

 > Freigeld has several special properties:

  * It is maintained by a monetary authority to be /spending power
    stable/ (no inflation or deflation) by means of printing more money
    or withdrawing money from circulation
  * It is /cash-flow safe/ (a scheme is put in place to ensure that the
    money is returned into the cash flow - for example, by demurrage -
    requiring stamps to be purchased and periodically attached to the
    money to keep it valid)
  * It is convertible into other currencies
  * It is localized to a certain area (it is a local currency)

The name results from the idea that there is no incentive to store or 
hoard Freigeld as it will automatically lose its value after some time. 
It is claimed that as a result, interest rates would drop to almost zero. <

It is, however, highly improbable that the Powers That Be will ever 
allow such a life affirming reform. So, for the time being we have to 
live under the dictatorship of banks, and individuals as well as states 
have to deal with it. And here the question of fairness arises. That the 
German people - who were, like most other people from the EU-countries, 
never asked whether they wanna be members of the EU, let alone whether 
they wanna have the Euro! - have, as taxpayers, to give guarantees for 
other countries that not only don't do serious reform yet also insult 
the contemporary Germany as a reincarnation of Nazi-Deutschland, is not 
fair. And the ECB's nano interest rates, here Germany (which has, just 
like the other countries, only one vote) is always overruled by the 
mediterranean economies, do constantly move money from Germany to the 
south of Europe. Germans have significantly lesser real estate than 
other people in the EU. They also tend to shy away from stocks (- and 
when I look at the development of my shares of Adidas and SAP, they are 
probably not as irrational as the newspapers say). And so Germans have 
their money mostly on the bank. Where it loses and loses value. As such 
this might go on without accident for quite some time. But when the 
going gets tough? Greece or Cyprus were certainly no real problem for 
the stability of the EU because they're simply too small to be of 
systemic relevance. With Italy and France the situation is completely 
different. When one of these countries crashes, the shock waves will be 
felt worldwide --


On 14.10.2014 23:19, alice malice wrote:
> How does one define austerity? The word is tossed about by all sides,
> but at cross purposes and no serious definition is agreed upon. Is
> Germany doing enough? Is France, Italy, Spain ...doing enough? Is a
> political and fiscal solution feasible? What of the Bank? The Germans
> are paying a dear price for the political failures of other nations
> and for the geopolitical conflicts, the sanctions and so on. Now, it
> is close to a tipping point.All of this is good for the US, as the US
> is unwinding its massive QE, and US rates are being driven lower, the
> dollar higher. Well, that's the weight of an Empire. Germany must see
> this and it must make them angry, but pawns and knights are not
> queens. That's the game, Germany is responsible, with the Russians,
> for the chess board, so it goes.
>
> On Mon, Oct 13, 2014 at 9:07 AM, David Morris<fqmorris at gmail.com>  wrote:
>> Clearly this response shows the weakness of the Euro: the "Union" is a
>> farce.
>>
>> But Germany won't be able to stand alone for long.  If Europe is screwed, so
>> is Germany.
>>
>>
>>
>> On Mon, Oct 13, 2014 at 3:53 AM, Kai Frederik Lorentzen
>> <lorentzen at hotmail.de>  wrote:
>>> On 12.10.2014 12:09, alice malice wrote:
>>>
>>> Europe is screwed. And Germany is only doing what it needs to do to
>>> get in a better position to recover over the longer term.
>>>
>>>
>>> Amen!
>>>
> -
> Pynchon-l /http://www.waste.org/mail/?list=pynchon-l
>
>

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