Germany is Next to Fall
Channel: Sam Vaknin's Musings
Date: 2011-11-23

As the crisis in Italy is threatening to spread to France, Austria, Belgium, and other "solid citizens" of the eurozone, pundits have hitherto ignored the greatest threat: Germany. With its economy stagnant (0.5% projected GDP growth this year), Germany has assumed hundreds of billions of euros in new commitments to the faltering euro project. Normally, in times of crisis, investors would snatch up German bunds, driving up their prices and driving down their yields. This time, yields on Germany's much-vaunted bunds remained stable. Investors are shying away, terrified that the toxic waste generated by the likes of Greece and Italy will drag down the mighty Germany. This time around the country cannot extricate itself via an increase in exports: it is in the same predicament as China and Japan with exports slowing across the board.