Germany’s Finance Minister: “the debt-financed growth model had reached its limits”!

01 Mar

G20 Shanghai "Don't Blame Us!" [courtesy Google Images]

G20 Shanghai
“Don’t Blame Us!”
[courtesy Google Images]

Reuters (“G20 to say world needs to look beyond ultra-easy policy for growth”):


“The world’s top economies declared on Saturday that they need to look beyond ultra-low interest rates and printing money to shake the global economy out of its torpor, while renewing their focus on structural reform to spark activity.”


Telling the world to “look beyond ultra-low interest rates and printing money,” is central bankers’ code for:

1)  QE (Quantitative Easing) and ZIRP (Zero Interest Rate Policies) don’t work; and, therefore,

2)  Don’t expect much more QE of ZIRP in the future.

Without more QE and ZIRP, there’ll be less artificial support for stock markets and market indices can be expected to fall sharply.

The banker’s comments may even signal that there won’t be as much market manipulation as we’ve had in the past.  If so, the prices of gold and silver should rise.


The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth,” said the communique, issued at the end of a two-day meeting in Shanghai.


Say whut?!  The “global recovery continues”? 

Ohh, puleese—the Baltic Dry Index measures the amount of global trade that takes place by means of shipping.  The Baltic Dry Index was 11,600 in A.D. 2008 and is currently 329.  That’s a 97% fall in maritime cargo in the past eight years.   Currently, you could probably haul most of the globe’s cargo on the Pinta, Nina and Santa Marie.  There’s no way that an actual 97% decline in the Baltic Dry Index can be consistent with a purported “global recovery”.

In fact, the Baltic Dry Index’s 97% decline is proof positive that there hasn’t been a “global recovery,” there is no “global recovery” to allegedly “continue,” and there won’t be a “global recovery” in the foreseeable future.

The G-20’s references to a “global recovery” are lies.


“Monetary policies will continue to support economic activity and ensure price stability . . . but monetary policy alone [read, “central bankers alone”] cannot lead to balanced growth.”


Fiscal policy” is the province of governments.

Monetary policy” is the province of central banks like the Federal Reserve.

When central bankers argue that “monetary policies alone” can’t save the global economy, they implicitly admit that the central banks are out of bullets and are basically impotent.  They’re admitting that they can’t solve the problem.

More, by expressly admitting that central banks and their “monetary policies” can’t save the economy, the central bankers imply that they never could solve a economic problems, and therefore, it’s only fair that the blame for the current global recession should be shared with governments.

(“The fault, dear Brutus, is not with our central bankers—it’s with our politicians.”)

Most importantly, I suspect that by declaring that “monetary policy alone cannot lead to balanced growth,”  the central bankers also imply that they don’t want to bear the exclusive blame for whatever global depression might be coming.  I believe the bankers are covering their backsides in anticipation of a real, global calamity that they expect to take place in the near future.

I think the G-20, central bankers are scared of being held liable for the coming calamity.


“Faltering growth and market turbulence have exacerbated policy frictions between major economies in recent months, and the statement also noted concerns over escalating geopolitical tensions and Europe’s refugee crisis.”

The terms “exacerbated policy frictions” and “escalating geopolitical tensions” are merely sanitized ways to describe the coming calamity of global poverty, starvation, war, and millions of people being starved, maimed or killed.  The coming economic collapse will cause bloody chaos for which the central bankers might not merely be blamed, but hunted.

Central bankers would like to avoid being perceived as personally liable for these “escalating geopolitical tensions”.


“Christine Lagarde, managing director of the International Monetary Fund, warned that there was a risk that the recovery could derail.”


“The recovery could derail”?

Really?  What “recovery” is that?


“Germany had made it clear it was not keen on new stimulus, with Finance Minister Wolfgang Schaeuble saying on Friday the debt-financed growth model had reached its limits.”

OMG!—no, reallyOMG!

Germany’s Finance Minister has publicly made one of the most radical admissions I’ve ever seen!

That’s the first time I’ve ever heard any banker or significant government official admit or imply that there’s something inherently wrong with anything that was debt-based.

We live in a debt-based monetary system.  We live in debt-based national and global economies.  The whole, global “system” is based on debt.

By expressly admitting that the “debt-based growth model” was flawed, German Finance Minister Schaeuble implicitly admitted that the entire debt-based  monetary system is flawed—and, if so, is therefore on the way out.


China’s Finance Minister Lou Jiwei said, ‘Monetary policy [orchestrated by the central banks] will probably have to be kept appropriately loose, even though people have realized that its role cannot replace fiscal [government] policy“.


First, the G-20’s central bankers admitted again that they alone can’t solve the global economy’s problems with “monetary policies” like QE and ZIRP.  I.e., they have no effective solutions for current or anticipated economic problems.

Second, they’re trying to at least share–and arguably, shift—blame for our current and future economic problems from central banks to governments.

IMPLICATION:  The central bankers see a major collapse coming and, like the proverbial rats, are abandoning the ship and swimming for shore and safety.

IMPLICATION:  The G-20’s central bankers know that we’re on the verge of an economic calamity.  They don’t see any way to avoid that calamity.  Therefore, they’re trying to preempt being blamed for that calamity by shifting blame to governments.

The big point is that the central bankers seem to be acting as if they know that an economic calamity is coming—and coming soon.


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7 responses to “Germany’s Finance Minister: “the debt-financed growth model had reached its limits”!

  1. felix

    March 2, 2016 at 5:32 AM

    You can’t says they haven’t warned us.

  2. palani

    March 2, 2016 at 6:54 AM

    Public notice was given in the 14th amendment that the new government they installed was a recipe for bankruptcy.

    Section 4. …neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States,…all such debts, obligations and claims shall be held illegal and void.

    I liken this to a public notice a man puts in the paper that ‘my wife has left my bed and board and now can fend for herself ’cause I refuse to be responsible for her debts’. Notices such as this are effective after the date of the announcement only so while many people believe this section deals with the so-called ‘rebellion’ just concluded it really refers to FUTURE obligations rather than PAST obligations.

    The politicians of the time (1868) knew any fiat based government was pre-destined to fail. It is a tribute to our society that we have permitted it to continue in this manner for so long a period of time.

  3. Felix

    March 2, 2016 at 11:57 AM


    I have been thinking about this for the past six months! Aren’t people that believe themselves to be United States citizens in rebellion against the Republic?!

    • palani

      March 2, 2016 at 4:59 PM

      @ Felix “Aren’t people that believe themselves to be United States citizens in rebellion against the Republic?”

      The 14th amendment uses the same name for a different status. A 14th amendment US citizen of the 1868 nation is not the same status as the original concept. Here is the 1803 working of art III of the Louisiana Purchase

      “The inhabitants of the ceded territory shall be incorporated in the Union of the United States and admitted as soon as possible according to the principles of the federal Constitution to the enjoyment of all these rights, advantages and immunities of citizens of the United States,…”

      The citizens of the United States in 1803 were the several States. For immigration purposes the U.S. naturalized aliens in a U.S. citizen category until they settled in a State … it was a transition phase and not intended to be long term unless you settled in D.C.

      You need to check out 15 Stat 223 (Ch 249) in the statutes at large for instructions on how to cancel 14th amendment status. Most people just live with a murky status that causes endless pain and frustration.

  4. dog-move

    March 2, 2016 at 2:06 PM

    The baltic dry index is mentioned in the article as having lost aprox 97%. consider this, the $CDNX and just about every junior exploration mining company are down aprox. 99%. Consider a closed end fund, pinetree capital was trading at 16.00 at the highs in 2007 A.D., now trading, 2 ofr 3 cents.Comparing the baltic index and the $CDNX on a chart they over lay one another exactly all the way down to the lows at present.
    Could the baltic dry index and the $CDNX both be victims of the strong move in the $USDX since 2011, with the preceding strength in the $USDX commencing in 2007-2008 A.D. ?
    I suspect if one follows the moves in the currencies past, present and future one may be able to expect upcoming trends. $XJY strength is replacing $USDX strength, the $USDX should weaken going foward.When the $USDX starts to weaken this should give a spark to the baltic dry index and the $CDNX. Just making an observation of the obvious.
    the dollar strength since 2011 A.D. has killed the global economy,commodity prices and shipping. Is this evidence of a pause in QE AND ZIRP and below ZIRP ? QE, ZIRP and below ZIRP just took a breather in $USDX terms for a few years.
    Don’t believe it when the liers when they say they have reached their limits. They just pass the baton onto the players across the Atlantic in NYC. When the runners in NYC get going again after an 8 year break expect pallats dollars to get shipped all ove rthe plant again, reviving the commodity, precious metals and shipping bull again.
    I remember Bob Chapman back in the day on the radio using the term “ad infinitum”, thus referring to the monetary policies used and abused by the powers that be.

  5. Felix

    March 3, 2016 at 10:39 AM

    How many people can stay in business if they lose 97% of their revenue?

    How long does it take to ramp up production once production lines have been stopped? Once they are shut down? Once they are decommissioned?

    In business lead times are very important, small producers are able to respond fairly quickly to a market due to their small size, but giant factories are not so easily managed.

    The big ships don’t turn on a dime.

    The point?

    We are in deep sshit.

  6. dog-move

    March 4, 2016 at 3:44 PM

    I tend to believe we are at a very important turning point. The inventors of the constuctive fraud will create lots of Dollars once again , maybe a new war cycle. All eyes on the Middle-East “shipping lanes”. Oil will turn back up!


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