Friday, 18 November 2011
Hitler and today's Europe
I think we have the really interesting situation now that for six decades the world has internationally collectively through various means imposed upon Germany the national collective responsibility never again to allow another Hitler; yet now, on the other hand, the world is collectively calling upon Germany to support money printing to help fix Europe's financial problems. That solution, upon which the world calls, risks resulting ultimately in European Weimar Republic inflation: the precise cause of Hitler's assumption of dictatorship.
US and German economic policies are diametrically opposed: the US has always feared deflation since the Great Depression, and promotes quantitative easing (QE, a euphemism for the printing of more money); Germany, on the other hand, fears inflation, and always has since World War II.
But the only politically pragmatic course of action now for Europe is to issue hundreds of billions, if not trillions, more Euros to support European sovereign bonds. Italy provides 20% of the European bail-out fund, but can no longer provide effective support because Italy itself is now overburdened by debt: trillions of Euros. Printing too much new money eventually but inevitably causes inflation, to which Germany has been opposed from day one, despite pressure applied by the US. Inflation destroys economies and fuels serious social unrest and political extremes. So now we have the choice of risking the very serious consequences of either: inflation; or European financial failure.
I acknowledge the interviewee on Australian ABC TV's "730 Report" on 10 November, 2011, who connected those two major issues for me. Unfortunately I can’t remember his name.
First published 10 November, 2011.
Posted by Nils Marchant