Article Image

IPFS News Link • Economy - International

Germany Could Witness A Cash Renaissance As Its Economy Continues To Deteriorate

• By Remix News

Producer prices in Germany increased by a record 45.8 percent year-over-year in September, the same as in August. Energy prices, which rose by 132.2 percent year-over-year, had the most impact on this. The only positive thing about this is that the month-over-month growth slowed a little due to the drop in commodity prices. However, for consumers, it follows that consumer inflation, which lags behind the so-called production inflation, must still climb. We cannot lie about this.

For Germans, however, the following sentence, which German statisticians added as a comment to the numbers, sounds the most frightening: "Compared to the same period last year, August and September recorded the highest increase in producer prices since the start of the survey in 1949."

Germany is extremely sensitive to mentions of inflation or public debt. To understand why, we have to go back in history. The pre-war hyperinflation in Germany was caused by the fact that Germany could not finance the reparations from World War I. It began to pay its reparations with debt and started to monetize this debt, printing uncovered inflationary money and using it to pay off the debt. The result was hyperinflation and total economic disruption. Many historians believe it was this economic undergrowth that brought Hitler to power and marked World War II.