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Germany is steering away from its storied car manufacturing legacy and barreling into a new era of military credit-based (of course) spending. I don't want to refer to Germany's fatal history in the first half of the 20th century at this point as the pointe writes itself: same players, same story telling, same enemy, same reaction as state propaganda now is running 24/7: Russia Russia Russia - we finally found the scapegoat to lever up our debt and pump european credit into orbit.
Meanwhile the bond market says 'no' to Madame Fatale Europe and is selling the hell out of EU bonds while London's and Swisse's Gold is escaping like always if there's danger in the air toward the save haven no.1: the US.
Back to the war-inspired protagonists on the old continent (does it have dementia? Are they going full Biden alltogether?). As the continent braces for an unprecedented rearmament push, defense titans are siphoning talent and resources from a crumbling automotive sector, betting big on tanks and missiles over sedans and SUVs.
Rheinmetall, a heavyweight in the arms game, has begun a bold pivot, converting two shuttered auto parts plants into sprawling hubs for weapons production. Meanwhile, sensor specialist Hensoldt has poached 200 skilled workers from the beleaguered ranks of Bosch and Continental, both reeling from a brutal market downturn. The moves signal a stark reality: the skills that once powered Germany’s carmaking juggernaut are now being redeployed to forge instruments of war. Producing military goods with made-up fiat credit will only grow two things: inflation and the public debt trap that now comes into sight, even if You're ideologically a blind rent seeker.
EU 'leaders' now rally behind a colossal €800 billion military spending blueprint, with Germany’s freshly minted government earmarking a staggering €500 billion to bolster its defenses. The cash infusion has sent defense stocks skyrocketing, while the auto industry—once the bedrock of Germany’s economy—languishes in a ditch. The grim irony: as car production stalls, the machinery of conflict may just be the spark to reignite Germany’s economic engine. Back to the good ol' days, huh?
You may ask Yourself: Can a nation so deeply rooted in precision engineering and consumer exports thrive by trading assembly lines for battle lines? I would give it a clear 'NGMI'! For now, Germany’s industrial giants seem ready to roll the dice, wagering that the future lies not in horsepower, but in firepower. For now.
Germany, and by extension the EU, is doubling down on a classic Keynesian playbook—pumping debt-fueled state demand into the economy to paper over a self-inflicted structural slump and productivity malaise. But leaning on the old crutch of the arms industry as a lifeline won’t deliver salvation. What’s left in the wake will likely be towering debt piles, a hollowed-out private sector, and a market littered with goods consumers didn’t ask for and won’t buy.
Source: Reuters
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21 sats \ 1 reply \ @Satosora 11h
Their car market is already dipping, so this might be another feather in their cap. But l thought germany had a lot of restrictions on defense manufacturing?
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I think that changed now
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0 sats \ 1 reply \ @optimism 10h
The moment the EC floated the idea of relaxing the constraint of the printing press by putting the defense fund outside of the 3% deficit norm, Europeans got rugged by their own elected officials in one sentence because the only thing national governments are afraid of is the deficit norm.
Now the first 100s of billions will be pumped into Germany's dead steel industry. By the time these deceased Brussels sprouts understand that what was actually needed was drones and plastics, in 50 years from now after the whole of Europe drinks industrial ethanol for breakfast before going to the labor camp for the 20h workday, trillions will have been wasted.
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You're a real optimist
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0 sats \ 1 reply \ @ditto 11h
What’s left in the wake will likely be towering debt piles, a hollowed-out private sector, and a market littered with goods consumers didn’t ask for and won’t buy.
From my cab window today in SE Asia, of the many marques: Audi, Benz.. Toyota.. I'm guessing really well-built vehicles are the goods that consumers want.
But now it's a defence sector industrial, the latest god candle for the sector, so consumers need tanks and weapons, apparently.
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I already ordered one of the LGTB+ tanks for the next parade of the woke retards in Berlin
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