Germany Falls into Recession • Hacker News Board

Re: Germany Falls into Recession

#21

Post by ChuckNorris89 » Thu, May 25, 2023, 2:05 PM UTC

mantas wrote: post #16

rhaway84773 wrote: post #9

Earlier quoted context omitted.

True, but every system has flaws. For the most part the Euro and ECB has been a benefit for every country in it. Even a country like Greece. As bad as the single currency was for Greece, outside the EU and Eurozone, Greece could very likely have been closer to Venezuela with even fewer resource wealth to benefit from.

Was it really a benefit? The only benefit is belief that Germany won't let euro fail and will bailout anybody no matter how shitty situation is. On the other side, this prevents fixing root causes. Why fix anything and make people angry if you can ride the wave, hope for the best and in worst case someone will bail you out? That's why we have this massive inflation. No real value is created, yet everybody is flush wi…

>That's why we have this massive inflation. No real value is created, yet everybody is flush with the money.

Indeed. Most of EU's economic growth since the 2008 crash was just printing money and propping up assets. A bunch of wealthy boomers buying expensive houses from one another does not mean actual economic prosperity.

We just printed our way into prosperity but Covid supply chain disruptions, the energy shortage, and the Ukraine conflict exposed the EU emperor had no clothes.

Re: Germany Falls into Recession

#22

Post by dunnonot » Thu, May 25, 2023, 2:07 PM UTC

ChuckNorris89 wrote: post #2

IMHO, it was already there, but it was in denial. Since covid, rents increases have far outpaced salary increases. And since 2022 so have bill, groceries, everything. But then again so is most of Europe.

I think they didn't like hotlinking, but in 2015 there was a comic about (in german) hint: yes there was a typing error... (-;

Comic: //i.ibb.co/ScZWgLt/938-ALLES-apr-15-FINAL-Mail.png

regards...

Re: Germany Falls into Recession

#23

Post by edgyquant » Thu, May 25, 2023, 2:08 PM UTC

0zemp2c wrote: post #19

u320 wrote: post #14

Earlier quoted context omitted.

They wouldn't cut rates anyway, with inflation at 7.2%.

stagflation...its in Germany, coming to the US...there is only one way out: we get poorer

The US is not getting poorer nor is inflation still out of control

Re: Germany Falls into Recession

#24

Post by ChuckNorris89 » Thu, May 25, 2023, 2:09 PM UTC

dunnonot wrote: post #22

ChuckNorris89 wrote: post #2

IMHO, it was already there, but it was in denial. Since covid, rents increases have far outpaced salary increases. And since 2022 so have bill, groceries, everything. But then again so is most of Europe.

I think they didn't like hotlinking, but in 2015 there was a comic about (in german) hint: yes there was a typing error... (-; Comic: //i.ibb.co/ScZWgLt/938-ALLES-apr-15-FINAL-Mail.png regards...

Is there a TL;DR translation for the comic? I don't think I get the humour/point. All I understood is that the government and media are faking the inflation numbers to be lower than reality that people notice.

Re: Germany Falls into Recession

#25

Post by blensor » Thu, May 25, 2023, 2:13 PM UTC

ChuckNorris89 wrote: post #4

alenrozac wrote: post #3

Technical recession. Recession nonetheless. The ECB has a real problem with asymmetry. Can't cut rates just for Germany. At the same time there's high inflation in Austria, Slovenia and the Baltics.

>The ECB has a real problem with asymmetry. Can't cut rates just for Germany. It's as if a single currency and a single central bank for 25 different economies with different levels of debt, doesn't really work that well in every situation. > At the same time there's high inflation in Austria Inflation in Austria is now mostly due to greedflation. If you cross the border into Germany the same goods are suddenly cheap…

Austria is always lagging behind Germany. I'd say about 6-12 months. So I have no worry that Austria will go down to roughly the same level as in Germany.

Gas prices have already dropped to a level where it is slowly getting in the range of pre-covid

Re: Germany Falls into Recession

#26

Post by mafribe » Thu, May 25, 2023, 2:15 PM UTC

ccozan wrote: post #18

Actually the biggest blow was not the energy costs, but the interest rates. They went from 1-2% now at 4-5, even 6% for real-estate ( new building and old ) while the prices are still at last year level. For other types of financing, I had a "good" offer which went to 12% interest. I felt like in a 3rd world country. With such expensive money, nothing will be done. The construction economy is really going dow from mi…

> money are kept by the people in banks and not released

The banks will reinvest this money. (Cf Fractional-reserve banking).

Re: Germany Falls into Recession

#27

Post by mytailorisrich » Thu, May 25, 2023, 2:15 PM UTC

rhaway84773 wrote: post #9

ChuckNorris89 wrote: post #4

Earlier quoted context omitted.

>The ECB has a real problem with asymmetry. Can't cut rates just for Germany. It's as if a single currency and a single central bank for 25 different economies with different levels of debt, doesn't really work that well in every situation. > At the same time there's high inflation in Austria Inflation in Austria is now mostly due to greedflation. If you cross the border into Germany the same goods are suddenly cheap…

True, but every system has flaws. For the most part the Euro and ECB has been a benefit for every country in it. Even a country like Greece. As bad as the single currency was for Greece, outside the EU and Eurozone, Greece could very likely have been closer to Venezuela with even fewer resource wealth to benefit from.

Greece's problem is internal, not external. Endemic bad management that used to be dealt with by devaluing the currency. With the euro there is nowhere to hide but at least that indeed prevents runaway devaluation.

Re: Germany Falls into Recession

#28

Post by [deleted] » Thu, May 25, 2023, 2:15 PM UTC

ccozan wrote: post #18

Actually the biggest blow was not the energy costs, but the interest rates. They went from 1-2% now at 4-5, even 6% for real-estate ( new building and old ) while the prices are still at last year level. For other types of financing, I had a "good" offer which went to 12% interest. I felt like in a 3rd world country. With such expensive money, nothing will be done. The construction economy is really going dow from mi…

[deleted]

Re: Germany Falls into Recession

#29

Post by mistrial9 » Thu, May 25, 2023, 2:15 PM UTC

edgyquant wrote: post #23

0zemp2c wrote: post #19

Earlier quoted context omitted.

stagflation...its in Germany, coming to the US...there is only one way out: we get poorer

The US is not getting poorer nor is inflation still out of control

this is called "hopium" one-liner.. look at the demographics.. twelve billionaires and 2.6 million adults having trouble paying monthly bills in my US West coastal area. Asset bubbles notably residential housing. capital-flight..

Re: Germany Falls into Recession

#30

Post by Escapado » Thu, May 25, 2023, 2:15 PM UTC

ccozan wrote: post #18

Actually the biggest blow was not the energy costs, but the interest rates. They went from 1-2% now at 4-5, even 6% for real-estate ( new building and old ) while the prices are still at last year level. For other types of financing, I had a "good" offer which went to 12% interest. I felt like in a 3rd world country. With such expensive money, nothing will be done. The construction economy is really going dow from mi…

I had a brief interaction with a real estate agent a few months back and he told me they really have trouble selling houses now at those interest rates. The run on housing apparently has dialed back significantly. He also mentioned that he thinks in around 5 and 10 years time the market might be flooded with houses people bought at low interest rates because they will not be able to pay their mortgage at these new interest rates and those are typical timeframes for interest rate guarantees. Maybe someone with more insight can share their perspective.

I also wonder if people who are in a position to sell our build houses will try (and maybe even succeed?) to sit this out or whether we will see a downward trend in prices again.