No Future, on 11 May 2012 - 02:54 PM, said:
I don't think it was a German master plan. Indeed I think it was a French quid pro quo for reunification of Germany. The French even managed to con the Germans into going in at too strong a Mark fooling them with the 'well you like a strong Mark don't you?'.
Initially the French plan worked and they thought they had cemented in a competitive position forever and their industry boomed. However, step by step, the Germans reeled them in and now there's no stopping them.
That's the point of 'fixing' the rate via the euro though.
Even now Schauble is talking about considering the possibility of a 'corridor' of inflation only in the 2-3% range for Germany.
They'll continue to outcompete anyone in a fixed currency with them though, that's their strategic plan.
French cannot compete with them, nor can anyone else.
Ultimately then Germany (as creditor) will have to decide whether to exit or to finance their surpluses on an ongoing basis. The 'recycling' plan appears to have reached its natural end point, so now they can either inflate, or make ongoing transfer payments, neither of which they seem willing to do for the sake of 'europe'. Their self-interest will out in the end. I really cannot see any other conclusion. They're not europeans - they're Germans. It's fall apart.