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Deutschland über alles, or leading us up a blind alley?

Oct 5 • Market Commentaries • 6045 Views • 2 Comments on Deutschland über alles, or leading us up a blind alley?

What would be the biggest news in relation to the ongoing Eurozone crisis? We’re not talking Greece default here, or the troika finally sending white smoke up the chimney from their secretive Vatican like refuge as they play out their version of the College of Cardinals meeting in conclave to elect a new pope, (bailout). How about a real earth shattering bomb being dropped. Here’s one, Germany leaving the Euro. Surely that would be unthinkable given the incalculable cost and intellectual effort that has underpinned the creation of the united states of Europe over the past decade or more? Not so according to the USA hegemonic hyper power complex..

The accepted wisdom is that the Euro project is beyond monetary and fiscal union, we’re constantly reminded that it’s a “political project” which is why most of the seventeen European nations committed to the Euro cannot and will not withdraw. However, will there come a time when the German coalition government ‘do the math’ and reach the conclusion that the crisis has reached such an economic tipping point that it’s in their interest to remove itself from the mechanism, (using that phrase that’s now entered our lexicon), in an “orderly fashion”? Rather than simply accepting the notion that Germany cannot or will not have anyone of authority or with considerable expertise actually crunched the numbers? There are plenty of fringe politicians occupying a space to the right of what they perceive to be a massive socialist programme who would delight in Euroland and in particular the euro currency’s failure, none more so than in the right wing enclaves deeply embedded in the USA govt in all its tentacles and factions.

There are several authoritative commentators who appear to be pushing hard the notion that Germany could exit from the Euro, most notably Pippa Malmgren who is suggesting that deep in their heartland Germany has got to the stage were the printing presses are being dusted down and ready to go. Perhaps she can give us the Google maps reference? Nowhere in her commentary did she mention the words “wheel barrow” or “Weimar republic”. Should this theory be respected, does it stand up to close scrutiny or, (allowing a conspiracy to fly for a moment), has Germany become that frustrated with the lack of credible solutions put forward by the ECB, the EU and the troika that creating a bit of mischief was considered a worthwhile experiment to finally encourage decisive decision making, or is there a more plausible reason for her kite flying?

Ms. Malmgren’s bio screams credibility. She served as financial market advisor in the White House and on the National Economic Council from 2001-2002, where she was responsible for financial market issues. She founded Malmgren and Company, in London, England in 2000 and was previously the Deputy Head of Global Strategy at UBS and the Chief Currency Strategist for Bankers Trust. She headed the Global Investment Management business for Bankers Trust in Asia. She has a B.A. from Mount Vernon College and a M.Sc. and Ph.D. from the London School of Economics. She completed the Harvard Program on National Security. The World Economic Forum named Dr. Malmgren a Global Leader for Tomorrow in 2000. She is also a member of the Council on Foreign Relations, Chatham House, the Economic Club of New York and the Institute for International Strategic Security.


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Perhaps the most startling revelation in her c.v. is her Council of Foreign Relations membership. Despite its harmonious branding this ‘council’ exists to promote USA hegemony singularly, therefore Ms. Malmgren’s views are not those of an intellectually curious economist, the CFR always has agendas. Whilst not previously entirely obscure her notoriety will now be escalated, and we can expect to hear more over the next few weeks and months as the CFR use her media space to put the boot into the Euro. Would the USA benefit from having the euro crumble, leaving it’s reserve currency status virtually intact? A Euro collapse would provide a pressure release valve for the USA admin. from two directions; firstly being such an enormous event would give the USA admin carte blanche to re set their own fiscal and monetary policy back to zero. Secondly, they (the USA admin.) get to use their favourite time honoured trick of creating ‘bogey mania’ to deflect attention from their own world class mismanagement during the past decade.

As a progress sheet it will be fascinating to watch how many of Ms. Malmgren’s predictions come to pass over the next few months if not years. Could it get past stage three when plenty of respected economists believe a Greek default would provide a fantastic opportunity for the rest of Euroland to get it’s financial house in order and as such the Euro will rise considerably versus the dollar? Here is her ‘news’ and developments to expect in the coming days and weeks:

  • Greece defaults
  • Germany protects German banks but other countries cannot do the same thus quickly provoking multiple sovereign defaults and or bank failures, all of which may easily lead to a payments crisis in the global banking system.
  • Derivatives are particularly at risk in terms of operation and execution.
  • The Euro falls in value especially against the US dollar.
  • The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.
  • The Euro falls even more on any news that Germany is withdrawing from the Euro.
  • Legal wrangling begins as to the legality of Germany’s decision. Resolution takes years.
  • Germany insists that the Euro continues to exist even they do not use it any longer.
  • They emphasise that European unification will continue and suggest new legal instruments to strengthen European Unification including new EU Treaties.

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