Is the Eurozone About To Explode with Germany's Bonds Driving To Historic Low-Yield High-Level?

Reports are, that interest rates (yields) for German long-term state bonds, known as Bunds, are "falling in an unprecedented way" right now: for ten-year bonds, yields are now at a historic low of 2.3% as of Aug. 19, while 30-year bonds for the first time are under 3%. This dynamic was hailed in a Bloomberg article this morning, saying that with this, the Angela Merkel government has achieved something that had not happened during the "Kaisers, two World Wars or the development of the modern bond market." The same article used the "no inflation around the corner" hype in Germany, to contrast the "built-in genes" of those Bundesbank and German bankers who had experienced the hyperinflation of the 1923 Weimar Republic, to never let it happen again, with policies of other central bankers, such as the U.S. Fed, as a having turned away from the previous international consensus to stop inflation.

Given the tremendous and growing discrepancy between interest rates for sovereign bonds in Germany, on the one hand, and Portugal, Spain, Greece, etc. on the other, this will not help the eurosystem — which certainly does not deserve to live any longer. But, whatever is driving the current dynamic, this kind of inflow is very dangerous for any nation and might possibly also signify a geopolitical targeting.

On the surface, the German press reports, the German Finance Ministry is now said to be happy about "cheap money" for German state finances. And propaganda for Germans to be lured into another round of speculative cheap money for a new real estate financing bubble, certainly has been in evidence.

As a historic reminder: Between 1924-1929, Germany's industry, private citizens, and municipalities were completely dependent on foreign money inflows, after Hjalmar Schacht imposed brutal austerity in Germany with the Dawes Plan, "ending hyperinflation." There was no internal credit available for any investments, as the Reichsbank was forbidden after 1923 to create credit. A lot of speculative money entered, thus, from outside, putting Germany on the hook of this life-line. This all came to an abrupt end, when the speculative bubble burst in 1929. The political and social consequences of the Great Depression in Germany are known.

The only solution for every nation now is the global Glass-Steagall and a new credit system of sovereign nations for world reconstruction, which the LaRouche movement represents.