Germany Bound for Depression — Soros
Investor George Soros laid it on the line in a speech today in Berlin: The policy of fiscal retrenchment in the midst of rising unemployment is pro-cyclical and pushing Europe into a deeper and longer depression. That is no longer…
The policy of fiscal retrenchment in the midst of rising unemployment is pro-cyclical and pushing Europe into a deeper and longer depression. That is no longer a forecast; it is an observation. The German public doesn’t yet feel it and doesn’t quite believe it. But it is all too real in the periphery and it will reach Germany in the next six months or so.
Soros said that Germany needs to give up demanding austerity from other members of the eurozone and support a move for fiscal unification or leave the eurozone altogether. He thinks it would be best if the country stayed in and helped the entire union boost growth. However, harping on austerity is pro-cyclical and won’t get the job done.
The German Constitutional Court is scheduled to rule on Wednesday whether or not German funds can be used to purchase sovereign bonds of other eurozone members.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.