So the European Union and other Tranzi* institutions have decided to prop up the euro by another, monstrous bailout package, involving the purchase, by the European Central Bank, of billions of euros of bonds. In other words, the ECB, which for a while tried to act as “Son of the Bundesbank”, has given up on all that rigorous, Teutonic stuff and taken a leaf out of the Anatole Kaletsky let’s-print-till-we-drop playbook. Excellent. Holidays in Europe will be cheap as chips at least until inflation takes off.
What do readers think is the chance that Germany, say, will be back using the Deutschemark by the middle of this decade? I’d say it is low, but you have to wonder. Germany had for many years an enviable reputation for having a strong currency. They’ve thrown it away. I see that some of the natives are getting restless, although a news report here cites “dithering” over the bailout package as a cause of anger. I’d say it was hostility to the bailout per se.
Ironically, the strength of gold at the moment highlights the benefit of that Hayekian idea of “parallel”, competing currencies in the same jurisdiction. The way things are going, a lot of firms and individuals, given the freedom to do so, would rather be invoiced in gold or some other, relatively solid store of value (eg, Swiss francs, Australian dollars, and so on).
*A short term for Transnational Progressivism, a sort of political philosophy that puts stress on the need for big, cross-border institutions to run our lives at the expense of national, and usually more democratic ones. Examples: the UN, IMF, European Union, IPCC, etc.