German Elections Void of Any Critical Discussion

The German Bundestag election campaign has seen a total black-out of any discussion of the major crisis that is building in Europe. Nobody is mentioning that Euro crisis, ECB monetary policy, disintegration of the EU, refugee crisis, pension crisis, the municipalities on the brink of insolvency, or the drastic increases in taxation coming AFTER the election that will only lower disposable incomes and extend deflation.

The politicians, and the press, are in full swing to hide the real trend at foot. The press is running stories why the Germans Love Merkel, yet she has never won even 40% of the popular vote. Even the press outside of Germany is in on the “selling” of Merkel because she is the leader of Europe – good – bad – indifferent.

Perhaps the monetary policy of the ECB has set the stage for a serious monetary crisis over the coming years that will seriously disrupt the German economy, in one way or another, depending upon the industry. Mario Draghi has experimented with negative rates which has kept the Eurozone governments on life-support – but they have not used the time to reform anything.

Draghi’s experiment has altered the economy and the financial sector in Europe. They now are faced with two equally unfortunate alternatives: if the ECB continues its monetary policy, many banks in Europe will slip into bankruptcy. Today, the traditional business models are no longer working because most banks with zero and negative interest rates have lost the most important source of revenue – deposits. A simple mathematical calculation projects widespread bank insolvencies in Europe as we enter the next decade.

The events in Barcelona demonstrate that there is a denial of any democratic government in the Eurozone. The elites have made the decision to federalize Europe and nobody is allowed to leave. Brussels learned nothing from BREXIT and this disintegration of the EU will worsen as the economics turns against it. The disintegration of the EU is only further enhanced by the refugee crisis. No other Arab country will accept the refugees such as Saudi Arabia or UAE. They know better. Two of the terrorists in Britain were refugees.

The negative interest rates have carved out huge holes in the pensions of Europe. Some members have issued 100 year bonds at less than 2.5%  and 50 year bonds as in Switzerland below 1%. This is merely a reflection of deflation projected out for extended periods of time.

The German Bundestag election is void of any discussion of the trouble in the EU or how Germany will be affected in beginning after the election. There is no mention of imposing a turnover tax on the internet and no mention of forcing companies to prepay all the VAT even on a 5 year contract covering installments. The desperate need for cash among the governments is not being addressed. Nobody seems to think twice that the governments constantly need a greater proportion of  private sector money to stay afloat and this in itself is driving the deflation.

 

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