Thursday, February 3, 2011

Impoverishing Wealth Producers

From today's Open Europe news summary:

Handelsblatt and Der Spiegel report on the dispute between the European Commission and the German government over new plans to cap eurozone countries’ trade surpluses at 4% of GDP, which could curtail Germany’s exports. German Economy Minister Rainer BrĂ¼derle said that he considered the targets “absurd”, adding that “the proposal does not fit a modern competitive Europe.”

Handelsblatt reports that, in spite of increasing inflation in the euro area, the ECB will probably not raise interest rates for the moment, for fear of further destabilising peripheral eurozone economies. Open Europe’s Pieter Cleppe is quoted in the Irish Daily Mail saying that if the ECB decided to raise interest rates in the near future, “it would kill any Irish recovery.”

I cannot believe that Germany will tolerate any interference with its export industries; therefore, if this measure is adopted, why should Germany remain in the EU?

In the first week of class for my Austrian Economics students at the University of Iowa we discuss the concept of "Diminishing Marginal Utility" as applied to money. An increase in the money supply conveys NO societal benefit. Among other evils, it transfers wealth from those who produce it to those who have not produced it, the very definition of theft and injustice. By tolerating increased inflation, the ECB is stating publicly that its policy is to transfer wealth by stealth means from some EU members to others. Again, why should those being robbed tolerate such a policy?

No comments:

Post a Comment