Told you so

Still screwed.

European stocks were in the black but off earlier highs Tuesday, as investors weighed strong German growth figures against the possibility of a Greek exit from the euro… [M]arket participants pointed to the fact that Tuesday’s GDP releases merely highlight the growing disparity between Germany’s strong performance and the weakness seen in Southern European members. Italy’s economy contracted by 0.8% in the first quarter, while Spain’s economy shrank 0.3% and Portugal remained in recession. In Greece, GDP contracted by an annual rate of 6.2% in the first quarter.

We have a balance of payments crisis; the continuance of this crisis is not good news, even if Germany keeps the Eurozone from entering a “technical recession.” The periphery is still exporting too little and importing too much, Germany vice versa.

Unless the periphery of the Eurozone is given somewhere to export to they will not recover. I’m not asking for any sacrifice from the Germans aside from the psychic cost of no longer being able to tell yourself how virtuous you are. I’m asking for the Germans to consume more! They should have more stuff themselves instead of selling it to Italians, Spaniards, Portuguese, Greeks etc. for bits of paper which might end up being worthless.

Have your cake and eat it Germans, better yet, eat a cake made by some Italians and  Spaniards and Portuguese and Greeks and Frenchmen! You’ve earned it.