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Why We’re Ungovernable, Part 15: After Germany’s Merkel Comes Chaos

After a long, initially-successful run promoting European integration and mass immigration, German Chancellor Angela Merkel saw the bottom fall out of her political fortunes this year. This morning she stepped down as leader of the formerly-dominant Christian Democrat party and promised not run again when her term as Chancellor ends in 2021.

What happens next is almost certain to be chaotic, as the following chart (courtesy of this morning’s Wall Street Journal) makes clear:

German political parties Merkel

Note that in August of 2017 the two least popular parties were the far right Alternative for Germany (blue line) and the far left Greens (green line). In the ensuing 14 or so months AfG’s support rose from single digits to around 17% while the Greens rocketed from the bottom of the pack to 20%.

If you didn’t know what these two parties stood for you might think, “Fine, they’re new and interesting, so let them form a coalition and govern for a while.”

Unfortunately they’re more likely to kill each other in street fights than work together, since the former want closed borders and free markets while the latter want increased regulation and unlimited immigration.

The alternative to an AfG/Green coalition then becomes some combination of the remaining, more centrist (by European standards at least) parties. But the biggest of those parties – Merkel’s Christian Democrats and their coalition partner Social Democrats – are in freefall, precisely because of what they’ve done while in power.

So there appears to be no way to put these puzzle pieces together to produce a stable government.

And – here’s where things get truly scary – a stable Germany under Merkel’s bland but firm hand has been the only thing holding the European Union and eurozone together. If Germany descends into internal turmoil without a coherent government to push the Italys and Hungarys around, European populists/nationalists will fill the resulting vacuum. Borders will be re-imposed within and without the EU, national government budgets – already above EU deficit limits in many cases – will explode. Already-debilitating debts will keep rising, and the ECB will be forced to bail out Italy for sure and probably several other member states after that.

Since an ECB bailout of the Italian banking system means, in effect, moving Italy’s debt onto Germany’s balance sheet, the world’s one remaining rock-solid credit will join the ranks of politically unstable, increasingly indebted countries that may or may not be able to avoid financial collapse.

The end-game? A euro devaluation will be imposed by the global currency markets or announced preemptively on some future Sunday night by Merkel’s successor (assuming there is one).

The descent of the world’s second most important currency from reserve asset to modern day Italian lira will raise a lot of questions, including:

  • Should we all buy the US dollar because it’s the only sound currency left?
  • Should we dump dollars because the US is really not that different from Europe in terms of financial mismanagement and political incoherence?
  • Should we dispense with the whole fiat currency thing and go back to sound money that requires politicians and central bankers to live within their means?
  • Should we dispense with the whole “constitutional democracy” thing and hand over control to a leader who’s strong enough to put things right?

These four options seem about equally plausible at the moment. But the worlds they’ll create couldn’t be more different.

Other posts in the “Why We’re Ungovernable” series are here.

 

Emigrate While You Still Can

9 thoughts on "Why We’re Ungovernable, Part 15: After Germany’s Merkel Comes Chaos"

  1. Germany had better be prepared to take on Spain and Italy’s debt to name a few and forgive Greece’s debt. Look the whole of the EU and Euro were built around Germany (German manufacturing, German exports to Europe and the US and rest of the world), the power of the German Mark. Germany has grown from a defeated global power to a new global power and much of it has been at the expense of growth in other parts of Europe. Now don’t think this was entirely selfishishness. It was baked into the plan that Germany be rebuilt as an economic power so it would not fall Russia and become a Soviet Satellite. It was baked into the plan that Germany would take the lead in rebuilding Europe and it was baked into the plan that France would be the diplomatic face to avoid apprehensions of Germany’s Nazi past. Fine. It worked. Europe has had decades of peace and Germany has experienced enormous growth just like Japan has since WWII. The fatal mistake is that Germany started to put its ills of low birthrate and Nazi apologism and its penchant for strict central authoritarian control upon the backs of the rest of Europe. Europe was forced to embrace migrants which have pushed govts to near bankruptcy due to their socialism (they were going that way anyway but they are going there faster with millions of unemployable unassimilable 3rd world migrants). Europe is now unraveling because it cannot control its borders, its religions, its common European and western values from religions like Islam and 3rd world cultures, unraveling its free speech and freedom of religion and freedom of assembly because of Shariah and its muslim immigrants, unraveling its public spaces because of migrants sleeping in the streets, unraveling its public safety because of rapes, prostitution, robberies, gangs, murders, drugs, etc. Europe is afraid of correcting it because its afraid of a strong nationalists past resurging to confront this issues that the left has created and failed to control. Inshort the peace that German hegemony created is falling apart and if the EU is to survive then the EU must give up its strong centralized control and devolve into a voluntary confederation of sovereign nations where nationalism reigns supreme and Brussels is severely limited in scope and size. It may also mean a devolution of the Euro where countries return to individual currencies but coordinate to maintain Euro bonds and Euro financing and currency pegging but allow individual nations more ability to devalue currency and control their own interest rates. Devolution is the future of Europe and the longer this gets prolonged … the more expensive it will be fore Germany. Certainly, if the left wins and continues the open borders then the social safety net in Europe will collapse. The devolution will be violent and chaotic and anarchistic similar to a civil war. If the right wins in Europe then it will be a transition with a gradual devolution of centralized power back to sovereign nations. There will be problems but the problems will be more manageable by dealing with the inevitable and unsustainable trends than trying to hold together a fallacy that is breaking apart.

  2. “Should we dispense with the whole fiat currency thing and go back to sound money that requires politicians and central bankers to live within their means?”
    You got that partially correct: substitute Shakespeare’s
    prescription for lawyers to central bankers and you get the idea. For what nation, determined to live within its means, with a normally functioning Treasury Department, has any need for a “central bank”? ( and please don’t tell me central bankers operate from a higher moral plane).
    The fact that you never see mentioned is that in exchange for enabling governments to run up colossal debt, the central banks have assumed ownership of all the gold we like to think of as “national gold reserves.” The central banks are owned by the too-big-to-fail commercial banks. It should be seized back, turned into medallions printed onto gold certificates and distributed as “money.” In exchange for which the bankers get to keep their scalps.

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  3. The 4th alternative offered, i.e., “Should we dispense with the whole “constitutional democracy” thing and hand over control to a leader who’s strong enough to put things right?” would seem to be the most likely ultimate result, although most undesireable, even catastrophic. But, that’s the undeniable direction we’ve been heading for a long time.

    Since modern man has rejected the Catholic faith, man has descended into “ungovernableness”. The “ungovernableness” is the consensus opinion, not mine. I’m just tying this end result to it’s route cause.

    A one world government is consistent with the Apocalypse prophecy of the AntiChrist taking control because “he” will do what the power class wants him to do, which is to enforce a smothering control over the masses of ungovernable people. This will result in a “hell on earth” scenario. Of course, no one is going to acknowledge this, because it is in the Catholic Bible, and everyone has been conditioned to disbelieve the Catholic Church due to all the scandals spread by the Media, which is controlled by the world power class (international Cabal).

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