TUESDAY, FEBRUARY 09, 2010
So You're A German Taxpayer...
They took away your DM, and now they want your wallet
Not at all happy.
It's all very well for lefty Nobel laureate economists to pontificate on TV saying that you should pick up the tab for those crazy Greeks, but WTF?
It wasn't you who ran up all those debts. It wasn't you who employed legions of civil servants and then paid them so extravagantly. It wasn't you who let the public finances kereer out of control, failed to take any remedial measures, and then cooked the books so nobody would know. It wasn't even you who elected the clothead government that did this. So WTF should you pay?
WTF indeed.
It would be like, say, some bunch of clowns who you didn't vote for coming to power in this country. And then they splurge shedloads of money they don't have on a wild expansion of the public sector, and let the public finances kereer out of control. And then they cook the books to hide the damage. And then, when the damage can't be hidden any more, they come to you and say you've got to pay off the humongous pile of debts they've accumulated.
Thank God that couldn't happen here.
*****
And thank God we're not in the Euro. As we've blogged before, the only thing Gordo has ever done that's been any use was to stop Imperator Bliar taking us in.
Because if we were in the Euro, we'd now be on the spit alongside the Greeks and the other PIGS. Sure we'd be forced to make the spending cuts pdq - which would be A Good Thing - but we'd have no opportunity to earn ourselves out of penury via a currency depreciation. We'd be looking into a long dark tunnel of jobless joyless despair, with no glimmer of light much before 2030.
Not that being outside the Euro means we're out of jail free. Yes, independent free floating sterling gives us the chance to earn our way back to health - a chance denied to the Greeks - but we still face a huge risk that weaker sterling will spill over into higher domestic inflation. And although the Bank of England has finally stopped printing all that surplus money (aka Quantitative Easing), we remain wholly unconvinced they have a grip on the inflation risk.
So should you switch your savings into Euros? The traditional pre-Euro investment rule for continental currencies was "buy on a strike: sell on a riot", and I fancy I hear the sirens of the sell signal coming from Athens right now.
No, for security of capital, your best savings bet is anything that looks like this:
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