Nobody wants to do a G7 or G20 deal. Here is why I think it will not happen…
Fear!
The same reason why banks are not lending with each other is the same reason why the Euro zone, or world cannot come to a single deal. They don’t trust each other. And if they don’t trust each other how can banks? I say, "hey let Rome burn if that is the only way to get some action."
For example the German minister just said (ARD News), "oh we have a better saving quotient and thus a better situation than the US."
OH REALLY…. I call Bullshit!
Well, he is right Germans save more, and Germans have less debt, but that is pretty much irrelevant. You see Steinbrueck is pretty much an idiot because he things Germany is "special". This attitude was very obvious when Germany was breaking the mastrict Euro treaty multiple times, yet those countries that were "suspect" were doing very well.
Let me illustrate an example of how this credit situation will affect Germany.
Gescheitert ist der Campingfahrzeughersteller an zwölf Millionen Euro, der Summe, die das Unternehmen bei Passau zumindest vorübergehend gerettet hätte. Doch wochenlange Verhandlungen mit dem Bankenpool unter Führung der Bayerischen Landesbank scheiterten. Die Geldhäuser wollten dem Unternehmen nicht mehr aushelfen. Mit dem Kredit sollte, wie in den vergangenen Jahren auch, die absatzschwache Zeit bis zum Frühjahr überbrückt werden, denn das Unternehmen hat kaum Rücklagen und Eigenkapital. Gleichzeitig sank der Umsatz von 330 Millionen auf 305 Millionen Euro. Dazu kommen 60 Millionen Euro Schulden.
This company builds camping trailers and the thing is their order books are full. They have plenty of work. But due to the credit situation and slowing demand they can’t get revolving credit, and hence have to declare bankruptcy. As per the article they needed 12 million Euros, which is less than 4% of their yearly revenue. But the banks are shutting down and with that nearly 2,000 jobs will go out the window.
That is the credit crunch in plain and simple words. What should be keeping Steinbrueck awake at night is that this is no fatty lazy company. This is a "bestseller" company who is struggling to get through the credit crunch.
So Steinbrueck if you are listening and reading this GET WITH THE ACT and work together with other countries. Because if you don’t you will have to deal with it indirectly. This is a global credit crunch!
Though I doubt he will, after all "Germany has more savers…"