Trade Imbalance

This article on Germany’s economy stuck out to me this morning. It’s written by a leading US economist and the former Federal Reserve chairman Ben Bernanke.

Fluffy and Flakey

Ben Bernanke is upset. Germany is dishing out too many Volkswagon Buses exports in relation to its imports and its neighbors. Go ahead, take a minute to read his blog post…

http://www.brookings.edu/blogs/ben-bernanke/posts/2015/04/03-germany-trade-surplus-problem

His basic argument is that the fact that Germany has an incredible trade surplus and no debt makes it difficult for Germany’s neighbors and is unfair to the rest of the world. When I read the article, I thought it illustrated clearly a difference in the values or philosophies of our current fiscal policies in the United States and those here in Germany.

Meanwhile, Germany can borrow for ten years at less than one-fifth of one percentage point, which, inflation-adjusted, corresponds to a negative real rate of interest.

This single quote should just about floor you. Germany’s credit rating is so high that they could actually make money through nothing but normal inflation of the Euro by issuing…

View original post 197 more words

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s