If debt is the problem then abandon debt financing. In other words don’t pay back bogus interest. It is not sustainable. Restructure, nationalize then privatize and start anew.

Yes you can afford to spend more stimulus money, a lot more in fact. Your economy is the soundest in the Eurozone. But you instead will implement an austerity budget. This sort of prudence is utterly unthinkable, incomprehensible in America.

Very smart move Germany.

In about 2-3 years, Germany (perhaps with France) and China can come together and form an Euro-Yuan currency partnership. With your finance and economy in order, with huge growing population and world’s most advanced technology and creativity, your partnership will blow away the US dollar as principal reserve currency for good.

Americans will continue to find this outcome incomprehensible. But they would have to think hard, very hard, about it.

Public Debt Crisis caused by Bank Bailouts

The public debt had been pushed up sharply in the last two years by the trillions that governments run by free market policymakers pumped into distressed banks to prevent their collapse from proprietary speculation in deregulated markets. Recent figures from the German Bundesbank showed that in 2008 and 2009, some 53% of Germany’s new public debt was used to rescue distressed financial institutions. The total new public debt rose by €183 billion in those two years; the costs involved in supporting distressed financial institutions amounted to €98 billion.

Wow! Check out the numbers from above. They almost match. THE BANKERS are winning.

I trust Nouriel.

While countries with large debt such as Italy should trim deficits and contain wages, Germany should spend more and raise wages to help fuel demand in the euro area, Nouriel Roubini, the New York University economist who predicted the financial crisis, said in an interview on June 5.

“Germany can afford having more stimulus not just this year but next year,” Roubini said in Trento, Italy.