THE EUROPEAN DEBT SITUATION, AND GERMANYSeptember 1, 2011
For those of you following the European version of the financial mess, you'll have been noticing that all solutions and scenarios seem to revolve around Berlin, in some nightmarish fantasy that must have 'Dolf smiling in whatever grave wherever he really ended up, smiling. Well consider these alternatives:
There it is: Europe's largest economy, and one of the world's largest export economies, must either undergo purposeful inflation and an economic slow down in order to bail out everyone else, or simply leave the Euro, and there are powerful reasons for Germany to avoid either alternative. Leaving the euro would inevitably force Germany to seek realignment with other economic blocs, and the only bloc that it could conceivable focus upon, a bloc large enough to trade with, would be the BRICs nations.
To a certain extent, under the government of Chancellorin Merkel, Germany has already expanded economic ties with Russia and mutual cooperation on Eastern European affairs, while walking the geopolitical tightrope of remaining in NATO. Germany also, it will be recalled, sat out of the recent NATO intervention in Libya, doubtless because one of its largest trading partners, China, had large interests at stake with Qaddafi's regime.
Enter the ever-"lovable" George Soros, who points out that as Germany bails out European country after European country, its influence grows accordingly throughout Europe:
My bet is that, so long as Chancellorin Merkel is able to convince the German population to go along with these plans, that Germany will stay the course, and that when one says "Europe" in the future, it will be a Europe increasingly marching to the discordant tunes called in Berlin and Paris, and on an increasingly independent path from the USA, and playing a balance of power act with the BRICs nations. In short, we are possibly looking at the beginning of a tri-polar world.