On Germany’s response to Euroland’s problems

Earlier today I wrote a post on the free blog site about blaming Germany for the problems in the euro zone. I ended up defending the German political response and blaming the euro. Let me just add a bit of colour to that here.
The canard is that the Germans are inflation-phobes because ninety years ago the country went through a great hyperinflationary trauma that now dictates the German views on monetary policy even today. The thinking here is that if the Germans would just let go of the past and allow a little inflation, everything would be alright.
Bollocks I say, total and utter bollocks.
As I wrote in the post earlier today, it's not just about inflation and wage and price levels. At heart, the euro crisis is a private debt crisis centred in the banking system. We see that again an...


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