At the beginning of the crisis, states were in danger of going bankrupt because they had dept claims against states the security for which was worthless. Afterwards, the states guaranteed for the banks where they were indebted with more money. They had acquired the money by indebting themselves yet again.
Someone fell into the swamp and was going to drown. Then he took his own hair and tried to pull himself out by it. Well, it is something the even Baron of Munchhausen (of course, it was not Master Tyll Owlglass) was not a success with – neither will it work with the states and their banks.
Consequently, the states were drawn even further down. By now, some of them are really deep into the mud. Shortly before drowning, however, they are now permitted to take a firm grip on those states that are not yet quite as deep in the mud and who courageously pulled at their own hair in order to get out of it.
I wonder how it all will end.
There is no reason to get upset. After all, it is only the state finances in the Euro zone that are deep in the mud, not the states. And especially not the people living in those states. As a matter of facts, the people are mostly quite well off.
All that would be necessary is for them to live a little more adequately, forego their “display window capitalism” mentality and distribute their goods more fairly.
The damaged state finances can be healed – either by currency devaluation or currency reform. It has always been like that and I guess it is how it will always be in the future, as well.
Now if you say: that is no longer possible, the Euro is now protected, and then all I can say is:
In for a penny, in for a pound!
And is our national debt not also de facto irreversible?
RMD
(Translated by EG)
P.S.
The first picture is of the bronze statue of Master Tyll Owlglass on the Mölln town house square. It was taken on July, 28th, 2006, by Hans Weingartz.
The second (later) attachment is a portrait of Karl Friedrich Hieronymus Freiherr von Münchhausen, the lie baron, of 1752. It can be found in Wikipedia and was put there by G. Bruckner.
Loading ...