Image source: Pixabay

Germany is on the brink of collapse.

For over a decade, their overreaching social policies and loose monetary policies have been dragging the country down.

Instead of focusing on the production of real things, Germany has turned to its Keynesian money-printer-touting bankers for unlimited stimulus of the economy.

Now the cracks are starting to show in their currency.

Germany’s 10-year bond sprouted up nearly 30 basis points on Wednesday.

Bloomberg reports:

Worst German Bond Rout Since 1990 Prompts Selloff Around World

“German bonds extended their rout, with debt markets around the world sliding in the wake of Berlin’s historic plan to unlock hundreds of billions of euros for defense and infrastructure.

Yields on 10-year bunds continued their march higher, adding as much as 14 basis points on Thursday to reach 2.93%, the highest since October 2023. 

The rate jumped 30 basis points on Wednesday — the biggest increase since the months after the Berlin Wall fell in November 1989…

…German bonds held their declines after the European Central Bank cut rates as predicted and indicated its easing phase is drawing to a close. 

Traders had been on the lookout for signs officials could slow the pace of reductions, given the risk a wave of defense spending in the region could reignite inflation.”

With hopes to raise the economic status of Germany even higher, politicians decided it was time for more short-term infrastructure investment, and more bullets.

The market responded differently.

Actually, the market has not been responding well for quite some time.

In Germany, industrial production has been on its way down for nearly a decade.

Manufacturing output looks close to the same.

But for about 30 years, Germany has been on the low end of working hours.

It appears, Germans don’t want to work.

Who will replace production?

Germany and the rest of Europe is way below replacement level.

I suppose it will be the mass amount of immigrants brought into the country.

However, many of these immigrants and the aging population are filling up the near 50% of Germany’s public spending.

Printing money will only work for so long.

The world AND the markets look past the currency and look at the nation’s fiscal health as a whole.

It’s doesn’t look good.

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