The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.
via EU rescue costs start to threaten Germany itself – Telegraph. Ambrose Evans Pritchard goes on to report:
“Germany cannot keep paying for bail-outs without going bankrupt itself,” said Professor Wilhelm Hankel, of Frankfurt University. “This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings.”
The refrain was picked up this week by German finance minister Wolfgang Schäuble. “We’re not swimming in money, we’re drowning in debts,” he told the Bundestag.
Now, we certainly don’t always agree with Ambrose but there is a certain weary inevitability about the worsening of financial news. Where will all this deficit financing, QE and so on end? See also Is inflation now beyond the Bank’s control? by Jeremy Warner.