Monday, September 26, 2011

Is Germany Trading Beer For Tea?

With Oktoberfest just around the corner, is Germany pushing Tetley instead of Beck's? More to the point, is Germany slowly but steadily bailing out of EU organizations with the eventual goal of leaving the euro altogether? At a dinner this weekend to honour Jean-Claude Trichet, the Frenchman stepping down as the head of the European Central Bank on Oct. 31st (and desperately trying to hold things together until he does), it sounds like the Germans were selling tea instead of beer. From Bloomberg this morning: "The ECB’s policies in recent years, such as buying bonds issued by weaker European nations and providing cash loans in return for banks’ bond holdings, have helped provide support for both governments and lenders. The policies also have stirred discontent as two German members of the ECB’s governing council resigned this year amid signs of growing disagreement about the central bank’s efforts. IIF Chief Economist Philip Suttle told conference attendees on Sept. 24 that solving the European crisis will require the ECB to reduce interest rates to boost growth. “You need the ECB to ease significantly, and that probably means the euro needs to come down,” Suttle said. Schaeuble, the German finance minister, addressed the same room hours later with a contrasting message: “We won’t come to grips with economies deleveraging by having governments and central banks throwing - literally - even more money at the problem,” he said." Sounds like Tea Party stuff to me. And with Angela Merkel's party losing byelection after byelection in Germany over her support for the euro PIIGS, the next thing you may hear from Herr Schaeuble could be "Aufedersein"!

The Good News: No tea party here, I'm sticking to Bud Light!