The core seems to be doing well by their standards, while the Greece and periphery GDP’s struggle, keeping overall unemployment just over 10%.

Overall deficits still high enough for modest overall growth.

Germany helped by exports to the other euro members, which means support of Greek and Irish finances which keeps them all solvent ‘helps’ Germany the most.

So Germans continue to work and export to the others who consume, as has been the post WWII case.

An outsider might call it a clever arrangement to extract war reparations, though wonder why the ‘winners’ continuously forgo untold trillions in lost output due to universal unemployment that dwarfs the benefits of receiving net German exports.

EU Headlines:

European Output Growth Quickens More Than Estimated

German VDMA Machine Orders Growth Slowed to 28% in September

German Machine Makers Say Strong Euro Hurts Competitiveness

Greece rules out restructuring its massive debts

Greece Could Extend Repayment of IMF Loans to 2021, Ta Nea Says

15 Responses

  1. except that the “winners” got taken to the cleaners by the debtors, when they all agreed to give up their sovereign currencies in exchange for a stateless bank-issued currency!

    Now the peripheral populations get to enjoy their pleasant, indebted cultural styles (which they’re VERY good at; after centuries of practice), and the Germans get to enjoy their pleasant “live-to-work” cultural style (which they’re very good at).

    Germans get right-to-work, above-ground economy, PIGS get right-to-play, grey-economy.

    They’ve apparently swapped fiat currency for fiat culture & governance. That works well at a personal, stay-at-home level, but means NATO & other large-scale coordination is toast if they don’t try something different.

  2. Just to let you know, the ECB hasn’t bought bonds in 3 weeks. And only €9m Europe wide in the last month. So the spreads are rising on the Portugese, Spanish, Greek, Irish bonds.

    1. Just to let you know, the ECB hasn’t bought bonds in 3 weeks. And only €9m Europe wide in the last month. So the spreads are rising on the Portuguese, Spanish, Greek, Irish bonds.

      1. Good find, Matt. “Ultimate Monetary Weapon” I like it. Just what is needed to beat back the deficit errorists.

      2. Yea,

        Some people do get it. The corporation tax-take of €2.6bn by end-October here is €473m (22%) ahead of target, with €238m of this
        excess coming from a strong October performance. And since most of the multinationals here are American, it’s a sign of stronger foreign demand. The domestic economy though is still in tatters. It seems that Trichet, and now Juncker have told Axel Weber to stop running his mouth off over the bond purchase programme. Maybe, he shot himself in the foot as the next head of the ECB.

      3. The only way for the Eurozone to fight in the currency war is to threaten default. So of couse the ECB isn’t buying bonds- it is the only way the Euro stays below 1.50.

        This entire crisis has been hyped from the very beginning. The Euro will be at 1.70 without any crisis, maybe higher. The comments out of Merkel are the proof- Germany will threaten not to support any payments until the Euro gets back down to 1.30

  3. There is one question I’m asked all the time. Perhaps someone has a good answer: “If monetary sovereignty is so simple a concept (and it is), why are the media, the politicians and the mainstream economists unable to understand it?”

    Can it really just be a case of Anthropomorphic Economics Disease? Or is something else going on?

    Rodger Malcolm Mitchell

    1. I often wonder this too. Of course in reality there are many reasons, but one jumps out at me as the most important: it’s in the banks’ interest. If we agree that spending power can come from only two places (deficit spending & fractional reserve banking) and deficit spending is constantly harped on as an unmitigated evil, then that leaves credit as the only mechanism in which to grow money. If I was a banker, this is exactly the situation I would prefer.

  4. SethM @ 6:10


    See quote below from James K. Galbraith, In Defense of Deficits, The Nation, March 4, 2010 (

    ”For ordinary people, public budget deficits, despite their bad reputation, are much better than private loans. Deficits put money in private pockets. Private households get more cash. They own that cash free and clear, and they can spend it as they like. If they wish, they can also convert it into interest-earning government bonds or they can repay their debts. This is called an increase in “net financial wealth.” Ordinary people benefit, but there is nothing in it for banks.

    And this, in the simplest terms, explains the deficit phobia of Wall Street, the corporate media and the right-wing economists. Bankers don’t like budget deficits because they compete with bank loans as a source of growth. When a bank makes a loan, cash balances in private hands also go up. But now the cash is not owned free and clear. There is a contractual obligation to pay interest and to repay principal. If the enterprise defaults, there may be an asset left over–a house or factory or company–that will then become the property of the bank. It’s easy to see why bankers love private credit but hate public deficits.”

    1. Nice Galbraith quote. Thanks for reminding us of it.

      On the other hand, no deficits, no tsy issuance. Cuts both ways.

    2. Wow, super nice quote thank you. Nice to know I’m not paranoid. It’s incredible how the interests of bankers have been transformed into a belief system for the rest. It would be even more incredible if we could reverse it.

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