Sunday, January 22, 2006

Resurrecting the German Economy - The German Money is Overseas

Whenever an economy is doing as poorly as the German economy has been doing, one must ask "Where has the Money Gone?"

We can find part of the answer in the U.S. Department of State 2005 Investment Climate Statement - Germany, where it is written:

"The 2003 total accumulated stock of German direct investment in the United States amounted to USD 177.6 billion (EUR 157 billion), while the stock of U.S. direct investment in Germany amounted to USD 83.1 billion (EUR 74 billion)."

Accordingly, we can see that the money is overseas, or as one can see from the above, in part in the USA. The German problem is not that they have no money, but that they have invested great sums outside of their own country, not just in America but also in China.

Corporations are profiting, but this wealth is not finding its way back to Deutschland. And where there is no money (i.e. no capital), there are no jobs. That is the essence of the German problem.
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