Ongoing European Debt Crisis

Germans are not really 'scared' of inflation. The real reason why we don't like the prospect of high inflation is because compared to other european countries, we have more money on the banks and not say invested in houses.

You know why they're scared of inflation, don't you? Collective PTSD due to the Hyperinflation of the 1920s and more importantly, where it lead to.

edited 15th Aug '12 8:08:45 AM by Greenmantle

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Or maybe due to the fact that they do not want to lose 20% of their savings?

...and that.

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I can mildly understand Germans, I hated Merkel and still hate her cause I don't regard her as a bright mind, to be honest, but...

With all pain and sadness on the heart for the country where i was born and raised, knowing from the inside where this nation comes from and where it seems to go, If I were a more civilized nation (i.e. Germany, Sweden...) I wouldn't risk anything for a bunch of people whose misery is product of stupidity to say the least, I wouldn't give a hoot for my own country, and this is sad as hell

edited 15th Aug '12 8:24:19 AM by MrsRatched

Haw Haw Haw

Maybe the Germans should ask the Greeks and the Italians how their savings are doing. I'm sure they'll play you a very small violin.

Interesting point of view. Yes, the suffering of the Greeks can be attributed in part to stupidity. Stupidity on the part of their leaders for ceding their fiscal sovereignty to a union that had no intention of helping them out if/when things didn't turn out so well. Yes, they were dumb enough to buy into what turned into a death pact, so we should punish them for that stupidity by driving their country into a new Dark Ages.

Are you with me? Are you feeling the love? Deutschland uber alles, am I right?

edited 15th Aug '12 8:27:50 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

No love, just "European Union above all, whatever it takes" — that has more or less what has been said...

...whatever the Economic Reality, the European Union simply does not care. The Euro will survive and that is that.

I can't disagree — anyhow, most people are Apathetic Citizens to a degree, since we're just trying to get by in the world and carrying on when times are tough...

edited 15th Aug '12 8:46:20 AM by Greenmantle

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@Fighteer Look, Greece, well, you see, a paternalistic political system who lied about their incomes in order to get into the EU, whose leaders were fraud after fraud, were the Apathetic Citizens consented in irregular economy and corruption...And i wasn't talking about Greece, but I was there and while I can say they are wonderful people I say as well they had an unbearable way of life, as far as I know, this can be called stupidity, buy I only know deeply my own home's dirt, which I certainly call stupidity when not direct bastardy

edited 15th Aug '12 8:42:25 AM by MrsRatched

Haw Haw Haw

Greece is definitely an example of extreme fiscal mismanagement. But while it's being held as the example of the crisis, the same exact problems are brewing away in Spain and Italy, which by all accounts were fiscally responsible prior to 2008.

In any event, how is it "moral" to punish a nation's people for its leaders' failings? You're saying the Greeks deserve 50% unemployment? Nobody deserves that.

"The Euro will survive and that is that." Not for much longer. The alternative to the measures Krugman offers is indeed a financial collapse and a breakup of the Eurozone.

Also, if we're going to have a comparison of moral qualities, the Germans profited enormously from the trade surplus they enjoyed on the backs of all this lending to the periphery. Shouldn't they be "made to pay the price" for their errors of judgement? After all, sauce for the goose is sauce for the gander.

edited 15th Aug '12 8:48:23 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Who says that the European Union has to listen?

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I'm not sure what you're asking. Are you saying that, when Greece or Spain or Italy or Portugal votes themselves out of the Eurozone, the rest of Europe is just going to pretend it didn't happen?

I'm not sure people realize that as soon as the first country departs the Euro, it's going to cause ripple effects that can bring down the whole project.

But anyway, all of this nationalistic sniping just reaffirms the notion that the Eurozone was a bad idea from the getgo. But what you're telling me is that, despite acknowledging that the Euro should never have happened, its members are going to double down on its failings out of pride? How does that make any sense?

Either fix the problems with the Euro, which will require shared sacrifice from ALL member nations, or abandon it.

edited 15th Aug '12 9:03:39 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

@Fighteer Spain was never fiscally responsible, ever

Haw Haw Haw

[citation needed]

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

@ Fighteer:

I'm sure some will in Brussels — especially members of the European Commission.

Even those not in the Euro? And abandon what? The European Union as a whole?

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Well, I suppose I mean the Euro, not the EU. I was incorrectly conflating the two. But a complete breakup of the Euro might very well have implications for the EU as a whole.

Sorry for serial editing, but it's better than double-posting.

Really, I see this whole mess as reflecting a kind of head-in-the-sand mentality about the Eurozone's fiscal problems. If nothing is done, it's not a question of if it will fail but when, and everyone proclaiming that it "can't happen" will find themselves unpleasantly surprised.

At a certain point it begins to look like stubbornness for the sake of stubbornness. I mean, let's take three scenarios: (A) A bit of inflation pain for Germany but the Euro survives; (B) the Euro economies go through a collective depression lasting years or decades; (C) the Eurozone breaks up and every nation suffers a total financial collapse, Germany included.

edited 15th Aug '12 9:17:14 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

A note: they only lose 20% of their savings relative to a 0 inflation rate. Do the germans really have 0% inflation?

Further, it's really more like 18% (for what it matters).

No but they 'd prefer it. Whenever inflation was above 1,5% in the last years newspapers voiced their discomfort.

Irrational on their part. The long term prospects of the economy will be a lot better, so if you have a lot of savings, being able to actually utilize that savings effectively is important to. But oh well, people don't know jack about economics so of course they think "Oh noz mah savingz!"

Of necessity, German wages would also need to increase to keep pace with this inflation. They may be mad about their savings losing relative value, but will they be mad about 4% annual pay raises? I think not.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

It might be irrational, but the Germans have their reasons which I've already covered once today and are well known, so I'll leave it there.

@ Fighteer:

It'll probably be B), if all goes relatively well — it'll be a "Lost Decade" or "Lost Decades"*

for the Eurozone, and possibly the whole World Economy, but maybe, just maybe, we'll come out all right in the end.

edited 15th Aug '12 11:12:09 AM by Greenmantle

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Next week is going to be interesting when Merkel and Samaras meet in Berlin: http://goo.gl/xYlIq

I don't like it when people give Merkel the nickname "Iron chancellor" btw. because in Germany, people associate Otto von Bismarck with this title and not Thatcher . And honestly, her foreign policy is nowhere near as good or sophisticated as Bismarck's.

English-language media would probably derive "Iron Chancellor" from the "Iron Lady," or Margaret Thatcher. From that perspective, it makes more sense.

Quod gratis asseritur, gratis negatur.

True. But I believe German newspapers started calling her that first. And considering most of her opponents (including said newspapers) believe that her foreign policy lacks a grand strategy calling her Iron Chancellor is in my opinion misleading.

edited 15th Aug '12 11:38:10 AM by Zarastro

@ Fighteer: Got any explanation for this: UK jobs: The plot thickens — basically, the number of people in work in the UK has risen by 201,000 in the three months to June, while output is supposed to have shrunk by 0.7%. How does that work?

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My first guess would be an increase in low-paying jobs. However, I am not up to speed on the UK economy to the point where I can analyze that without a lot of work. I'll take a peek at it later if I have a chance.

Edit: I took an actual peek; that is, I skimmed the article. The finest economic minds in Britain seem unable to arrive at a satisfactory explanation so I'm not sure that I'll come up with something novel armed entirely with secondhand data and a layman's understanding of economics.

One thing the article also mentions is a rise in seasonal employment, such as for the Olympics. Also, there's the story that Iceland and Ireland are intimately familiar with: offshore companies hiring locals but channeling profits out of the country. I don't know if that's happening in the UK but it's something to consider.

edited 15th Aug '12 2:27:46 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"