So as some of you may be aware, Germany is in deep economic trouble. The whole EU sector is, but Germany is standing out even so.

January 3rd 2009 in the wake of the big financial crisis, Satoshi mined the Bitcoin genesis block, embedding this message in the blocks raw data.

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

It is widely believed to be a critique of Keynesian economics, deficit spending and fiat money.

Germany used to be known to be the european economic powerhouse. And much handwringing and cause seeking is going on over how this went down the shitters. I would like to highlight one particular aspect that seems largely uncontroversial even among Keynesian economists.

In 1999 Germany went from a strong currency (deutsche mark) to a weak and rapidly devaluing euro. Keynesian economists justified the change as pumping the economy and making german exports more competitive. The same reasoning is still used today by the same economists (ECB, SNB, Fed, etc.) to engage in interest rate manipulation, deficit spending and bailouts.

However, now blame is heaped on that policy to be a major contributor to the destruction of Germanys economy. It is argued that Germanys focus on competitive high quality and value production was the result of a strong currency and conservative monetary policy. This in turn afforded german products a worldwide impression and appreciation of quality, and from that a high standard of living and well functioning government.

But when they drank the Keynesian cool-aid, and started pumping monetary heroin into the economics veins, competitiveness decreased and deficits started to baloon. Companies didnt need to work hard to be competitive, a weak currency stimulated exports.

And now, 25 years on, 15 years after Satoshis scathing critique, Germany is a dysfunctional state. Social order is breaking down, government services are slow, expensive and subpar, public transport is a disaster, infrastructure is eroding, unemployment is trending higher, wages are stagnant and inflation is high. Exports are collapsing, investment is drying up and companies are in a flight to foreign countries. Politics is shifting to the far right…

Sound money matters. Those who cannot learn from history are doomed to repeat it, central banksters and citizens should take heed. Ignore it at their peril. Germany is an outstanding lesson in modern monetary economics (really just good old politicians make printer go brrrr) abject failure. It didnt work long term for the Roman Empire, the Chinese a thousand years ago or any country since. We havent gotten any better or smarter, and you can dress it up in as a many fancy theories, justifications and financial constructs as you want, it doesnt get any better.