[HN Gopher] Germany records first monthly trade deficit since 19...
___________________________________________________________________
Germany records first monthly trade deficit since 1991 as inflation
soars
Author : freemint
Score : 118 points
Date : 2022-07-04 15:57 UTC (7 hours ago)
(HTM) web link (www.theguardian.com)
(TXT) w3m dump (www.theguardian.com)
| v4dok wrote:
| I can't help having a bit of freudenschade. The mighty Germans F
| it up. They didn't want to break eggs with Turkey and get
| advantage of the SE Med gas reserves. They didn't like nuclear
| after bashing it for so long. And of course, they got dragged
| into a war that they are too small for.
|
| Sad thing is that 1. Whole EU has to suffer because of this 2.
| You can't stop thinking "What it would be like if Germany
| actually stepped up to lead with understanding"
| [deleted]
| mensetmanusman wrote:
| Is the demographic crisis catching up with Germany?
| https://www.iamexpat.de/career/employment-news/germanys-skil...
|
| Sounds like a significant shortage relative to their population
| and GDP...
| DisjointedHunt wrote:
| No, that's a valid point you make, but sadly, not relevant in
| the present context.
|
| The constituent factors of the trade imbalance being spoken
| about here is a sharp rise in energy costs. For decades,
| Germany has led the EU in repressive energy security policies
| including a heavy focus on shutting down existing Nuclear
| facilities that typically have >90% uptime in favor of cyclic
| sources.
|
| For example, less than 10% of installed renewable capacity in
| Germany right now is usable:
| https://twitter.com/burggrabenh/status/1543388878584823810
|
| Thanks to which, Germany is presently generating 72% of their
| electricity through very dirty and very expensive coal
| https://twitter.com/bjornlomborg/status/1543190255477706752
| jpdus wrote:
| Sorry, but your comment is misinformed and just wrong and the
| sources are intentionally misleading.
|
| In H1 2022 >50% of German energy consumption was from
| renewables [1] and Germany has currently significantly lower
| spot-market prices than France, which went full-on nuclear
| [2].
|
| The sharp rise in energy costs has nothing to do with nuclear
| (at least not now - if the society 20-30 years ago had
| invested more in nuclear, things could've turned out
| differently. Now, nuclear is neither feasible nor
| economically viable..) and everything to do with gas prices,
| which dominate energy costs due to the merit order. Coal is
| currently actually still used below capacity while gas plants
| are running at record utilization, thanks to profit-
| maximizing utility companies exploiting this.
|
| Unfortunately, Germany had a government for the last 16 years
| that cared a lot for preserving the status quo for incumbents
| (cheap gas!) and neither companies nor consumers were willing
| to pay a premium for energy security/resilience. We're now
| paying the bill for that.
|
| [1] https://mobile.twitter.com/energy_charts_d/status/1542804
| 890... [2] https://mobile.twitter.com/energy_charts_d/status/
| 1543915767...
| DisjointedHunt wrote:
| It helps to pause and think about the fundamentals in a simple
| way. For the first time since 1991, Germany is in a situation
| where the value of all goods and services imported exceeded the
| value of all goods and services exported.
|
| Is this a bad thing? Depends. Germany is a manufacturing heavy
| economy where energy prices are obviously a major part of input
| costs. So there is certainly an argument that at some level, this
| is unsustainable.
|
| In the long term, if the economic growth within Germany is able
| to offset the additional "expense" incurred , then it will not
| matter a lot. The US routinely runs a trade deficit, but the US
| economy is one that the world holds at envy for the reasons that
| it is able to do so. There is plenty of domestic consumption and
| growth that offsets the massive trade deficits and in a
| simplified way, the US imports deflationary prices from the rest
| of the world and exports technology (I said highly simplified)
|
| For Germany, they don't have the luxuries that the US does. The
| question that is crucial now is how long can Germany sustain
| these deficits while their domestic economy re adjusts or is able
| to find deflationary forces from energy security etc. If they are
| unable to do so, then, by definition, they are fucked.
| lumost wrote:
| I'm a little suspicious the next set of stories will be about
| the US and overreliance on now expensive international labor.
|
| We keep talking about interest rates and monetary policy, when
| the reality may be that we need to look at all aspects of
| policy.
| DisjointedHunt wrote:
| The composition of the US economy is very different with
| manufacturing taking a smaller role. The US imports deflation
| from China through cheap manufacturing. Not necessarily labor
| alone. The US also is a NET EXPORTER of energy and is not
| hostage to energy suppliers as much as Germany is due to
| their economy being reliant on Natural gas that can't be
| easily replaced in the short term and even in the long term
| has immense transportation costs compared to cheap pipelines
| in geographic proximity.
|
| The thing to watch here is, the knockover effects and 2nd,
| 3rd order effects. When there is a gas shortage in Germany. .
| . Everyone suffers. A much higher portion of their GDP goes
| to compensate. When gas prices go up in the US, a section of
| the population "suffer", but there is a lot more economic
| tolerance built in.
| lumost wrote:
| My point was more that the economic composition of the US
| is not immune to similar effects. The US is highly
| dependent on Asian manufacturing, which in turn is
| dependent on global energy prices rather than local energy
| prices. The price of labor in Asia is also increasing
| substantially (something that should be celebrated).
|
| Arguably, there is no economic zone in the world which is
| internally well balanced today. This will translate into
| unique and difficult to navigate problems across the globe
| due to deferred consequences of past crises, geopolitical
| conflict, global climate change, and changing demographics.
| qt6rust wrote:
| newsclues wrote:
| Part of me thinks this may be true, and it may have been trying
| to do so for over a century.
| 88840-8855 wrote:
| Proven wrote:
| BenoitP wrote:
| This is to be understood under the high oil and gas prices and
| supply shortage.
|
| Germany has a huge industrial organic chemistry complex. In comes
| the oil and gas, which get vapocracked, distilled into base
| molecules; out goes fertilizers, plastics, medecines, precursors,
| etc
|
| It is so integrated that pipes run from one factory to another.
| Changes in the input will affect the whole chain.
| algorias wrote:
| And there is of course a time delay between the prices of the
| input rising, and the prices of the outputs rising.
| [deleted]
| someweirdperson wrote:
| Does this include purchase of foreign stocks? "Importing"
| companies? In that case I have contributed my fair share of that
| deficit.
| trhway wrote:
| I think that demonstrates the typical issue of not having
| leadership change for a long period of time. Under Merkel - who
| grew up in socialist East Germany - the Germany got a lot of
| structural characteristics of a socialist economy, in particular
| being dominated by large manufacturers who have been getting
| preferential treatment from the government, and losing the
| ability to adjust and maneuver. She also didn't have that gut
| check of dealing with Russia and has put all the Germany's eggs
| into one basket which has been held by Putin. Thus what happens
| right now is a light form of shock-therapy of getting adjusted
| back to the new reality of the current global economy. Their
| leadership still seems to hope that some form of the old trade
| relationship with Russia will survive. The faster they ditch that
| hope the faster the shock-therapy will get completed. Germany
| needs to bite the bullet and massively build the LNG terminals
| (one would expect that North Stream 2 landing point has all the
| connection into the infrastructure to take it in). The second
| best thing Germany can do for its economy is to supply Ukraine
| with a lot of weapons. Germany naturally has significant
| hesitancy to meddle into Ukraine war, yet the faster, stronger
| and earlier Russia stopped - the better for everybody, including
| Germany. Russia getting onto the Poland border is much worse than
| Russia forcefully stopped where for example it is now. Germany
| for now has been very slow at supplying weapons to Ukraine and
| thus prolonging the chances of Russia moving closer to Europe.
| shimonabi wrote:
| That's a good thing. They've been violating the Euro treaties by
| running a surplus against other countries in a common currency
| area, but no one dared to say a word.
| remarkEon wrote:
| Can you explain this in more depth? I'm not that familiar with
| EU laws and treaties. Is it illegal to run a trade surplus? How
| does that work, functionally?
| quarantaseih wrote:
| I read somewhere that europeans agreed to an open market and
| common currency that included Germany only if German's export
| surplus were contained. I dont know if they are part of the
| treaties of not.
|
| The idea being, why would Italy, France and Greece agree to
| open their market and give up their currencies (ie ability to
| devalue) in the face of the German juggernaut? A joint market
| would destroy French and Italian industry and in-debt Greece
| - as happened.
|
| <rant> The Euro zone was a mistake. Its premise was solid -
| the europeans no longer had the ability to have colonies to
| steal resources from, so they sought to create a large enough
| market to be relevant and muscle themselves into decent
| prices.
|
| It failed because the US quickly made sure the euro never
| seriously challenged the USD. Also, a continent that makes <
| 1.5 children/woman is not a going concern so no one has ever
| taken them seriously. Finally, the rise of China and India
| sealed the EU's fate. </rant>
| Mlller wrote:
| "europeans agreed to an open market and common currency
| that included Germany only if [Germany makes a certain
| concession]"
|
| It was rather the other way round: Germany was made to
| agree to the euro project as a concession for
| reunification.[1]
|
| All in all, this seems to have been beneficial for a
| majority of normal people in the countries getting a
| stronger currency and for a minority of people in Germany,
| who export: Consequently, Germany's wealth distibution
| tends to be the most unequal in the euro zone,[2] and its
| median wealth is slightly below that of Slovenia and
| significantly below that of France, Italy and Spain.[3]
|
| [1] https://voxeurop.eu/en/you-get-unification-we-get-the-
| euro/
|
| [2] https://www.reuters.com/article/us-germany-wealth-
| idUSBREA1P...
|
| [3] https://en.wikipedia.org/wiki/List_of_countries_by_weal
| th_pe...
| mmarq wrote:
| > The idea being, why would Italy, France and Greece agree
| to open their market and give up their currencies (ie
| ability to devalue) in the face of the German juggernaut?
|
| Because they couldn't manage their currencies and always
| dreamt of low inflation, in a few words: they wanted the
| Mark. Calling it Mark would have upset the nationalists, so
| they made the Euro.
|
| > The Euro zone was a mistake.
|
| Outside of the eurozone, Italy would have gone bankrupt in
| the mid 2000s, Greece a few years later.
| thriftwy wrote:
| Or maybe they would devalue their currencies and
| reindustrialize?
| mmarq wrote:
| To reindustrialise, whatever it is supposed to mean for a
| country like Italy, has nothing to do with debasing a
| currency, unless the plan is to surreptitiously cut real
| salaries and hope nobody will ask for pay rises. They
| have been doing that in the UK since 2007, all they got
| is lower salaries.
| v4dok wrote:
| Instead they got hush money to keep rotting away their
| industrial base and make sure that the best thing they
| have is German products consumers. I am forever angry at
| German "high politics", how did they think this is going
| to turn out? And they didn't even have the guts to say to
| their citizens "Hey you know all this EU-growth? It is
| because we suppress the periphery"
| rightbyte wrote:
| You can decrease real wages too. It is the same thing.
| ben_w wrote:
| > Also, a continent that makes < 1.5 children/woman is not
| a going concern so no one has ever taken them seriously.
|
| So much wrong with that sentence.
|
| The birth rate went that low (and lower!) but has been
| going up recently[0]. But even if total population was
| halving every generation, that's only a concern if it's
| sustained for many generations, and population forecasting
| (especially this simplistic) has never been particularly
| accurate over such periods.
|
| Then there's the second half. Europe has been _vastly_
| important worldwide from roughly the age of exploration to
| the end of WW2, and even then only stopped being
| _temporarily_ because of active efforts by both of the two
| superpowers -- who, despite arms reduction treaties,
| _still_ have enough nukes _each_ to destroy all settlements
| worldwide with populations over 150,000 [1] -- and yet
| _despite that_ the EU (less than the whole of Europe) has
| close to the same GDP (18 T) [2] as China (20 T) [3] and
| the USA (25 T) [3].
|
| [0] https://www.macrotrends.net/countries/eur/europe/fertil
| ity-r...
|
| [1] https://www.reference.com/geography/many-cities-
| world-c25cce... and https://en.m.wikipedia.org/wiki/List_of
| _states_with_nuclear_...
|
| [2]
| https://en.wikipedia.org/wiki/Economy_of_the_European_Union
|
| [3] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_
| (nomi...
| nawitus wrote:
| Fertility rate in EU seems to have peaked in 2016 (it
| declined every year from 2016 to 2020).
|
| I think the data you linked is prediction from year 2020
| onwards, and there is no observed increase from 2013.
| lkrubner wrote:
| I don't think it is illegal but it was hurtful to the EU
| overall:
|
| https://archive.nytimes.com/krugman.blogs.nytimes.com/2010/0.
| ..
|
| Of course, you could make the argument that it violated the
| spirit of the treaties.
| remarkEon wrote:
| What specific harm is being done here though? Krugman has a
| tendency to take a lot of underlying assumptions for
| granted without actually enumerating them. I'm looking to
| understand why Germany should have to manage its economy
| based on the aims of the rest of the EU and not their own,
| which seems to be what's implied here.
| morelisp wrote:
| Put simply, Germany wants (or wanted - we don't talk
| about the euro crisis much anymore even though it was
| never really resolved) everyone in the EU to a) trade
| mostly with other EU members, b) run a trade surplus.
| This is obviously impossible, but Germans don't want to
| hear that in a modern economy, for Germany to have no
| debts means someone else must. They sent moralists to do
| an economist's job.
|
| That being said I have no idea what the OP was on about,
| it's not illegal, it's just stupid.
| [deleted]
| ChemSpider wrote:
| What SS would that violate? This must be one of the (many)
| anti-EU fake news.
| jeroenhd wrote:
| This is the first time I've heard about this, could you tell me
| what treaties they're violating?
|
| Barring an economy from running a surplus seems like a terrible
| trade deal to me, so I wonder why the Germans would ever agree
| to such a rule.
| shimonabi wrote:
| Because you are not allowed to beggar-thy-neigbour in a
| common currency area.
|
| If Germans are allowed to have a permament surplus, than
| someone MUST always have a deficit.
| jeroenhd wrote:
| Why? Materials get imported from outside the EU all the
| time and exports can also go across EU borders. It's not
| like Americans pay their BMWs with euros.
|
| No country has a trade surplus/deficit of exactly 0, or
| even near 0. There's always at least half a billion going
| either way. If you know of any treaties that put limits on
| these numbers, I'd like to know what they are because I'm
| very curious about the intentions behind the people who
| would draft something like that.
|
| Going by https://trade.ec.europa.eu/doclib/docs/2013/decemb
| er/tradoc_... (link says 2013, but document says Q1 2022),
| Germany had an intra-EU trade surplus of about 0.2 billion
| euros. Germany is the closest to a perfect balance within
| the eurozone in the entire EU except for Bulgaria. Their
| surplus is almost entirely extra-EU, which isn't a problem
| for EU members.
| Terry_Roll wrote:
| Not just a common currency area, most of the world, but is
| there anything wrong with that? Somebody has to have savings to
| stand up to the corporates. Its what Obama's Diesel-gate was
| all about! Obama (remember him?) was telling Merkel to run a
| trade deficit, but stepping back, what you have are different
| countries dictating policy to other countries, in this case the
| US dictating to Deutschland how to spend their money. The meme
| being pushed in financial circles is "debt is money", when what
| they really want to say is the biggest borrowers get to dilute
| their currency the most and dilute, which can be read as
| weaken, the purchasing power of other people. So you see
| countries like the UK ramping up house prices, mortgages
| creating new money in the absence of the UK actually making
| anything of any worth, shelter is also on the lower tiers of
| Maslow's Hierarchies of Needs , the British Media pumping out
| thousands of hours of property porn to reinforce Asch
| conformity, is all in all a highly intelligent way to control
| people using stealth means!
|
| init(clever);
| bobthepanda wrote:
| I mean, the US saves very little money and yet was able to
| stand up to VW Group, so I'm not sure what "has to have
| savings" has to do with your example.
|
| Obama's observation was that you can't run a trade surplus
| with Southern Europe for decades and then get all surprised
| when they run out of money to pay you with. In a similar
| vein, you can't have EU cross-border banks without a EU
| cross-border insurance deposit scheme, because then one bank
| can potentially drown a small country, which is what happened
| during the Eurozone crisis.
| Terry_Roll wrote:
| Debt dilutes the currency because money is created every
| time someone takes on debt, it means your overseas
| creditors ie other countries get their money back, but its
| worthless today than in the past, because this is monetary
| inflation, not to be confused with the man on the streets
| inflation which is price rises. At the end of the day its
| just an intellectuals way of keeping the plates spinning
| and the uneducated in their place. Now it also happens this
| is a way for banks to wrestle power away from the
| politicians, just like stock market listed companies can
| put a ban on recruitment when a new political party comes
| to power, increasing unemployment. Its hard for Govt's to
| prove this, because legislation isnt the brightest, in
| fact, legislation can create fake science. Its a massively
| complex subject and education is the first step in divide
| and conquer.
| mardifoufs wrote:
| jacquesm wrote:
| No, this is completely in line with everything that the EU is
| all about. I'm not sure where you got the belief that Euro
| countries are not allowed to have internal trade deficits, it's
| inevitable in fact.
| shimonabi wrote:
| Merkel said after 2008 that ALL countries in the EU must have
| surpluses. It was like saying all teams in the NBA must win.
| jacquesm wrote:
| The world is a lot larger than the EU so there is no reason
| why that could not be the case.
| v4dok wrote:
| I rememember in an econ book that we think that exports
| have the "world" to serve. But in reality most countries
| trade the most with those closest to them. I wouldn't be
| surprised if that was the case for the majority of EU
| countries
| jacquesm wrote:
| Yes, but don't underestimate the exports that Germany is
| generating, between all of the high tech there and the
| car companies you are looking at a substantial exporter.
|
| China is #1, the USA (all of it) is #2 and Germany (just
| Germany, not the EU) is #3. Have a look at their relative
| populations and appreciate that fully.
| kken wrote:
| That's an extremely naive thing to say. Do you think the root
| cause of this does not apply to other European countries?
| Namely, faltering supply chains in Asia, skyrocketing energy
| prices?
| skrause wrote:
| My guess is that Germany still has a surplus against other euro
| countries, instead the money is flowing to oil and gas
| exporting countries. So that wouldn't help.
| DisjointedHunt wrote:
| Yes, and thus at some level, is unsustainable. ie, There is a
| point at which they could be running all the surplus they
| could wish for against the rest of the EU, but the cost of
| those surpluses offsets any gains to economic growth.
| _ph_ wrote:
| Most obvious explanation: the amount of money spent by Germany
| for energy imports, especially gas being bought on the sport
| market, has skyrocketed. That is a lot of money going to the
| balance without requiring the exports to be reduced - which they
| probably have been too. A lot of German industry depends on parts
| from Ukraine, like VW getting their cable trees from Ukraine
| manufacturers.
| stewx wrote:
| Friendly reminder that trade deficits are not inherently bad.
| https://www.investopedia.com/articles/investing/051515/pros-...
| concinds wrote:
| This is deeply ideological, and wrong. You're using arguments
| levied at Trump years ago that applied to the US, a mostly
| services-based economy, and applying them to Germany.
|
| Except Germany is a manufacturing- and export-based economy.
| Take that away, and you have a recipe for economic collapse.
|
| Read the FT's article, which includes much more statements from
| politicians and economists.
| https://www.ft.com/content/6f325773-bf8a-4e28-9fc1-6bc986ee9...
| Use the Bypass Paywalls Clean extension if you need to.
|
| Or, read what Stratfor (if you have a subscription) has been
| predicting for a decade now: Germany's slow decline, to be
| replaced as Europe's power center by Poland.
|
| Germany was already facing a worker shortage and inflation. Now
| the government is discussing rationing gas allocated to German
| businesses. Beyond the ideological arguments, it's clear that
| this is going to be a crisis for Germany, and for all Eurozone
| economies; and their reactions will determine "how bad it
| gets". We are looking at a probable recession across Europe.
|
| By the way, I warned months ago that sanctions against Russia
| would have a backfire effect: Russia is mostly unscathed, their
| oil and gas revenues are soaring; meanwhile Germany is talking
| about rationing. Sanctions don't work in an interconnected
| economy.
| 0xfaded wrote:
| Mark Blyth, who I find to be a cynical but entertaining
| economist, would say (paraphrasing): An
| export-based economy just means you let someone else consume
| the excess you produce.
|
| In exchange, you receive an increment to an arbitrary number
| stored in a computer somewhere. This might be a reasonable
| model for a household, but governments can print money making
| the value of said number somewhat fluffy. In a sense, the US
| got away with QE (for as long as it did) because other
| countries exercised tight fiscal policy. In the aftermath of
| 2008, the ECB was as conservative as ever and Europe relied
| on American $'s for liquidity. Or another way of thinking of
| it: so long and thanks for all the BMW's :)
|
| https://en.wikipedia.org/wiki/Mark_Blyth
| olivermarks wrote:
| I'm a Blyth fan but you are missing out a critical
| component of the right to print money, which is that the US
| dollar is the reserve currency of the planet. The petro
| dollar (offshore) is not backed by the FDIC the onshore US
| dollar is.
|
| The vast US military is arguably primarily to protect the
| right to print the world's currency. (The day Iraq started
| to sell oil in euros the US attacked it for example)
|
| As Blyth knows and talks about the ECB is in dire straits
| versus the reserve currency dollar. The EU has a difficult
| road ahead having completely screwed up their energy policy
| and are now creating food shortages in Holland and
| elsewhere to add to the global inflation nightmare.
|
| It's hard to tell if the US federal (it's not, it's private
| banks) reserve (they don't have any) are willfully
| incompetent or master tactical strategists...
| Vinnl wrote:
| Wait, what do you mean by food shortages in Holland, and
| especially ones caused by the EU?
| olivermarks wrote:
| https://www.dw.com/en/dutch-farmers-block-food-
| distribution-...
|
| etc.
|
| dutch farmers are spraying manure at the bureaucrats
| buildings
| odiroot wrote:
| > Or, read what Stratfor (if you have a subscription) has
| been predicting for a decade now: Germany's slow decline, to
| be replaced as Europe's power center by Poland.
|
| As a Pole, I cannot help but laugh at that. Why would that
| ever be the case?
| concinds wrote:
| Feel free to read Stratfor's site (I named an extension
| that allows full free access) or George Friedman's "The
| Next 100 Years" book.
|
| Stratfor employs many ex-US-intelligence-agency people who
| use the same geopolitical analysis methods for a corporate
| audience (though without classified data) and their views
| are a close approximation of the thinking of the US's
| intelligence community; in that sense, they are
| significant.
| mythrwy wrote:
| Friedman sometimes has some interesting takes but is
| often dramatically and laughably wrong. I would hesitate
| to take much of what they say as having much predictive
| accuracy at all.
|
| They do state it with an air of authority and "high
| caliber top secret intelligence" but still laughable.
| DisjointedHunt wrote:
| Just like simply eating at a McDonalds once doesn't make me
| an expert on Burgers. . .
|
| Similarly, holding the passport of a country doesn't
| automatically make someone a geopolitical expert
|
| I mean no offense at all, I've simply observed way too many
| instances of online discourse beginning with "as a citizen
| of ____" to establish credibility in areas that don't
| really benefit from citizenship.
| littlestymaar wrote:
| I kind of agree with you in a way: saying Poland will
| overtake Germany is as laughable as saying Canada will
| overtake the US as the economic leader in north America.
| You don't even need to be Canadian to know how ridiculous
| of a claim this is.
| OJFord wrote:
| In my reading, the point of 'as a Pole' is to say 'look I
| bear no ill will towards Poles, I want the best for
| Poland as much as the next citizen', it's not claiming
| authority, it's disclaiming bias against.
| RC_ITR wrote:
| > This is deeply ideological, and wrong.
|
| Ok so what is correct then? I'm not seeing the reason trade
| deficits are inherently bad anywhere in your comment.
| concinds wrote:
| Trade deficits are bad for an economy whose entire strength
| relies on exports.
|
| edit: Germany's exports are 48% of GDP for context. And
| this trade deficit reflects increased import costs, which
| will hurt businesses since Germany is poor in raw
| resources. I.e., this is a problem for both the German
| government & German businesses, and for their whole
| economy.
| srvmshr wrote:
| I think what you're referring more concretely is the
| difference between _Balance of trade_ vs. _Balance of
| payments_ , the latter being the addition of
| tertiary/financial sector.
|
| For an export driven economy like Japan, Germany or China -
| balance of trade could be bad. How big is the German software
| & banking industry to offset some of this default in the long
| haul?
| littlestymaar wrote:
| > to be replaced as Europe's power center by Poland
|
| Not gonna lie, you had me in the first half.
|
| Poland has had an anemic demography for years (1.38 child per
| woman in 2021, the lowest in Eastern Europe after Ukraine and
| Moldova), a massive brain (and workforce more generally)
| drain since the fall of the Eastern Block.
|
| Its GDP per capita is even 30% lower than Czech Republic and
| less than a third of German's GDP.
|
| German's economy is going to face troubles, but Poland isn't
| even remotely close to taking any kind of economic
| leadership. And it won't happen until Poland fixes their
| natality issue (and even then, it would take them another
| fifty years).
| mmarq wrote:
| > Or, read what Stratfor (if you have a subscription) has
| been predicting for a decade now: Germany's slow decline, to
| be replaced as Europe's power center by Poland.
|
| The Polish GDP per capita is 30-40% lower than the German.
| Assuming it will ever happen, it will take decades for Poland
| to replace Germany.
| sveme wrote:
| And it's half Germany's heads as well.
| reducesuffering wrote:
| German GDP is ~$3.8T to Poland's ~$600B, a roughly 6x
| difference. And there is hardly any trajectory change in
| the last 15 years, so color me skeptical Poland will
| overtake Germany economically anywhere in the next 50
| years.
| tonymet wrote:
| it's an unhealthy habit to endorse a very complicated topic by
| referring to an introductory website . that's a flimsier
| approach than most religions even
| avgcorrection wrote:
| 1. Trade deficits are inherently bad
|
| 2. Trade deficits are not inherently bad
|
| Which claim sounds more "flimsy"?
| UweSchmidt wrote:
| It would be better to articulate the gist of an on-topic
| thought in the confines of a HN post, rather than sending
| people off to go read something. If something in the
| article is wrong, let's address that exact thing in the
| comment. If you have understood your own beliefs well and
| can articulate them, then you can make great impact on a
| thread that way.
|
| "Just read this link" on a complex and controversial topic
| may be comparable to "Just read this religious tract".
| baybal2 wrote:
| > Friendly reminder that trade deficits are not inherently bad.
|
| Whether trade deficits are good, or bad depends on your
| monetary policy.
|
| In case of Germany, it was definitely bad after them having
| such low interest rates for so long.
|
| It was Germany's pride -- it's manufacturing industry which
| took damage from low rates the most.
| Barrera wrote:
| > Germany has recorded its first monthly trade deficit [EUR1bn]
| since 1991 [the year of reunification] amid soaring inflation and
| supply chain disruption weighing on the country's industrial
| base.
|
| Then from Wikipedia:
|
| > In 2016, Germany recorded the highest trade surplus in the
| world, worth $310 billion. ...
|
| https://en.wikipedia.org/wiki/Economy_of_Germany
|
| So it's not just the magnitude of the trade balance (negative)
| but the velocity (sharply downward) that should get attention.
|
| The US has run persistent trade deficits (now ~ $50 billion) for
| years. This brought cheap goods but eviscerated the manufacturing
| base. You could call it a tradeoff. What the US has going for it
| though is: (a) the ability to print its own money; (b) the
| ability to print the world's reserve currency; and (c) the
| demographics to support a consumption-led economy.
|
| Germany has none of these things going for it. The situation is
| not sustainable. The article implies that the change is not
| structural (increased competition from elsewhere, for example),
| but if it is things could get weird real fast.
| njarboe wrote:
| Missed a zero. The US trade deficit is has ranged from about
| $400 to $800 billion per year for the last two decades[1].
|
| [1]https://www.macrotrends.net/countries/USA/united-
| states/trad...
| frankfrankfrank wrote:
| There are other issues with this number that also comes with a
| surge in imports, just to mention one of the other hidden
| factors that are making everything extremely unstable.
| _trampeltier wrote:
| Bloomberg has a nice graph.
|
| https://www.bloomberg.com/news/articles/2022-07-04/germany-h...
| gpderetta wrote:
| Warning: extremely nasty back button hijack.
| enlyth wrote:
| https://archive.ph/OftCI
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