The demand for cars has been declining rapidly in Britain and that is impacting German car sales rather sharply. All price levels in cars have been declining, not just the high end. The sales figures for small cars and the medium class have already declined significantly in the last few months. Now the losses are also becoming apparent in the case of expensive brands, especially for the German car manufacturers.
As taxes have risen upon the average person and this hunt for more tax revenue unfolds globally, this is what creates the recession and deflation. It a strange paradox for many as they see deficit spending rise. Many have a hard time comprehending that if the money supply increases, how can there be deflation? It is always the bottom-line. If you keep raising taxes, you will reduce the standard of living, and that in turn comes back and results in lower economic activity.
