What accounts for the German attitude toward finance? A few months ago, Michael Lewis explained their weakness for buying up toxic assets in a long article that compared those toxic assets to a shit sandwich and suggested that Germans snapped them up because of their longstanding fascination with shit and excretion. Seriously. But what about Germany’s equally longstanding and uncompromising angst over debt? That’s all down to Weimar-era hyperinflation, right? Not so, says John Plender:
The fear of currency debasement was entrenched long before the 20th century. Frederick the Great in the Seven Years War debauched the currency several times to fund the fighting. Note, too, that Goethe’s Faust Part II brilliantly describes the perils of inflation. Mephistopheles urges the emperor to use undiscovered gold beneath his lands as putative collateral for promissory notes to pay the army. When the emperor and his court find they can print money without restraint, their wild spending leads to an inflationary spiral and civil chaos.
Poor Germany! First they’re slaves of excrement and now they’re slaves of Faust. I wonder if anyone will ever bother taking the time to figure out what really motivates German attitudes toward financial probity?