German Economy Explained

Facts to consider:

1. Germans have endured extended periods of high unemployment.
2. They endure persistent wage suppression, hence the trade surplus.
3. German median wealth is the lowest in the EU.

This is because:

1. Germans don’t own homes, they rent. Home ownership is very low (2012 stats ranking #44 in the world).
2. They spend a lot on vacations.
3. Government bond yields continue to decline.

The German economy does not make most Germans prosperous. Many refugees will be disappointed about the actual living standards in the promised land. But the trade surplus brings bargaining strength to the German government. Germany bailed out Ireland, even though Ireland has higher GDP per capita, and so do Belgium as well as the Netherlands. The Nordics and the French are not far behind.

Germans are mostly oblivious to how they are short changed. But they will notice the rapidly increasing rents. Even the mainstream media admitted a couple of days ago that rents are rapidly rising and the refugee crisis is to blame. This does even effect SWPLs, journalists and Green party voters on a personal level. Landlords are throwing out small businesses and doctors, because local governments pay more for refugee housing.

If Germans have to pay more for rent, they will no longer be able to afford vacations. This will make a huge emotional impact and it affects all classes. The German government on the other hand can issue debt at low and even negative interest rates and a recession will further increase demand for these bonds as a presumed safe haven.