George Soros has announced that Germany’s fiscal austerity measures might lead to “xenophobia,” reports Ambrose Evans-Pritchard,
"German policy is becoming a danger that could destroy the European Project. A collapse of the euro cannot be excluded," he told the German weekly Die Zeit.
"Unless Germany changes policy, its withdrawal from the currency union would be helpful for the rest of Europe. At the moment Germany is pushing its neighbours into deflation: this threatens a long phase of stagnation, leading to nationalism, social unrest, and zenophobia. It endangers democracy," he said.
Mr Soros saw the political effects of wage cuts first-hand during the Great Depression, and narrowly survived the Holocaust as a Jewish boy in Nazi-controlled Budapest. He has since dedicated much of his wealth to philanthropic works promoting freedom and pluralism across the globe, mostly through Open Society institutes.
When I was at school, I learned that it was the Weimar hyperinflation -- and not all those terrible Weimar balanced budgets -- that destroyed the savings of the German middle class and set the stage for the Rise of Evil. But who I am to question Soros’s novel theory? He was there after all…
My speculation is that Soros senses that the Eurozone might dissolve and wants to make a killing off selling the Euro short, much as he did with the pound sterling in 1992. Contrary to what Soros and Paul Krugman are telling the world, the only way that an El Dorado currency like the Euro could ever survive would be if the European governments practiced serious fiscal restraint and never prompted a “run on the Euro” by bailing out weaker countries or ginning up phony growth through “quantitative easing” (read "money printing," Weimar-style) and massive, unpayable debt loads. (Soros knows this; someone like Krugman probably believes his own Keynesian nonsense.)
One hopes the Germans won’t cower in the face of all this "Nazi" talk and take Soros’s advice/bait.