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Germany isn't Germany any more. It is a component of the Eurozone - which is a unified currency area - like the USA, or the UK. What Germany does is 'vendor fi

Germany isn't Germany any more. It is a component of the Eurozone - which is a unified currency area - like the USA, or the UK. What Germany does is 'vendor finance' other parts of the Eurozone. The Greek government buys German battleships and the savings the Germans are famous for buy the paper the Greek government issues to close the circle. Then they blame Greece for going into debt once the ponzi scheme reaches its limit. You get the same effect with London to the wider South East of England, arguably England to Scotland and no doubt several areas in the USA where outside of the area, but within the currency zone, is encouraged to borrow to buy the output of the area. China's mercantile currency lock does much the same thing. The eternal problem is that exporting is giving away the output of your people in return for a shiny bauble. If you don't then exchange that shiny bauble for the output of some other people, what was the point of doing all that work in the first place? You may as well have used your productivity to have Friday off instead and gone fishing.

d10r 7y ago
> The eternal problem is that exporting is giving away the output of your people in return for a shiny bauble That's an important point! In the case of China, I'd guess that it was a strategic decision to do so. Being in debt with others gives others political power over you - at least as long as you are not stronger (ultimately, in a physical sense) than them. I guess China wanted to avoid that as long as it wasn't strong enough. Now that China is getting stronger and stronger, they are starting to invest that accumulated capital in order to gain political power over other, weaker nations. That's btw. a hot topic even on Germany, if it's ok to let the Chinese buy local companies and other assets. In the case of Germany, I don't really understand why it went that way. The surplus seems to have become some kind of fetish. During the Greek crisis, the risks of such imbalances became visible. The big risk for Germany is imo that a major country like France or Italy will tip over politically, leading to the destruction of the Euro. There's no playbook for how to handle that and I guess it would be a messy and ugly political process which may render quite some of those collected "shiny baubles" worthless. With European history in mind, I don't think taking that risk is worth it.

d10r 7y ago

> The eternal problem is that exporting is giving away the output of your people in return for a shiny bauble That's an important point! In the case of China, I'd guess that it was a strategic decision to do so. Being in debt with others gives others political power over you - at least as long as you are not stronger (ultimately, in a physical sense) than them. I guess China wanted to avoid that as long as it wasn't strong enough. Now that China is getting stronger and stronger, they are starting to invest that accumulated capital in order to gain political power over other, weaker nations. That's btw. a hot topic even on Germany, if it's ok to let the Chinese buy local companies and other assets. In the case of Germany, I don't really understand why it went that way. The surplus seems to have become some kind of fetish. During the Greek crisis, the risks of such imbalances became visible. The big risk for Germany is imo that a major country like France or Italy will tip over politically, leading to the destruction of the Euro. There's no playbook for how to handle that and I guess it would be a messy and ugly political process which may render quite some of those collected "shiny baubles" worthless. With European history in mind, I don't think taking that risk is worth it.