As we await the outcome of the German elections in September, we at Notes From Underground would like to point out a few posts in which we alluded to the German elections. The first one is from June 2010, after the defeat of Chancellor Merkel’s candidate for German President, Christian Wulff.
The revelation: she leaves a sour taste in the mouths of Germans.
Chancellor Merkle’s hand-picked candidate for German president, Christian Wulff, did not receive a majority of votes in the 1,244-member assembly of federal lawmakers–similar to the electoral college in the U.S.–and will have to go on to further ballots. Wulff had 600 of the needed 623, thus keeping the opposition candidates alive. If any of the candidates fail again to achieve the needed majority, then the process goes to a third ballot in which the candidate with most votes wins.
We believe that Merkel’s candidate will prevail but the failure on the first vote is a slap at the chancellor. The meaning of this slap is that it makes the German Government bailouts of the PIIGS that much more problematic as the German public is growing tired of sending its money to the profligate. The internal opposition to further bailouts is the real threat to sovereign solvency within the EU. It is not the strikers in the peripherals, as significant as that may be, but the rise of opposition in Germany to sustained money transfer. We continue to say that the real TEA PARTY people are in Germany and there in lies the rub. We also note that the EURO has held up very well today in spite of this news. However, one day on month-end/quarter-end doth not make a trend but does reflect on the U.S. DOLLAR. The problems in the developed world are immense –no nation seems to have escaped. It’s just a matter of what seems to be the flavor of the day.
In a more recent post from April 28, we said, “the question that is framing the most recent debate in European circles is the one asked by Bernard Connolly for the last 18 years: Whose currency is the euro and who controls its outcome?” Click the link below for a refresher while we wait for the listless markets to wake.