Saturday, August 15, 2020

Peter Boehringer, August 7, 2020, Target-2


Peter Boehringer
Target-2
AfD Kompakt, August 7, 2020

[Peter Boehringer is an Alternative für Deutschland Bundestag member from the western German state of Bavaria. He is chairman of the Bundestag budget committee.]

The Target balance is in fact only a symptom of the misconstrued euro’s costs to Germany – albeit one of the most expensive. Since 2007, Germany itself finances large portions of its exports in the euro zone with this misused Target mechanism as a credit vehicle for EU southern countries. It will thus be seen that at the national economic level a large part of our export production is given away. The corresponding loss is now for the first time at 13 figures. If the Bundesbank exchanged its Target requirements at the present rate for gold (which in fact it had done until 1967), it could, even at today’s high gold prices, thereby purchase over 18,000 tons (presently it holds a good 3,350 tons). Besides Germany’s trade balance surpluses with Italy, Spain and Greece, it is primarily the capital flight movement out of the euro southern countries, as well as, in our opinion, the unconstitutional loan purchases of the ECB’s Corona PEPP program, which are contributing to the rapid increases in the Target balances. All of this shows that the divergent euro zone, since the persistent euro crisis of 2010, is to be held together only through the ECB’s planned economy measures (primarily the bond purchases from countries which, without the ECB, are no longer credit-worthy states). The market presently however no longer honors with its confidence the (illegal) transfer community of the euro, but acts to exactly the opposite effect.

Although the ECB is the direct counter-party of the Bundesbank for the Target settlements, this trillion will never return at value to Germany. The indirect debtor countries of the Mediterranean area, given the euro’s lack of real economic competitiveness, are not in a position to settle a trillion euros. The ECB will, in case of the euro’s dissolution or the expulsion of one of these southern countries, only be able to print more of nothing and it will then be paid back in massively devalued or indeed worthless euros.

If one day it actually comes to a rapid loss of trust in the euro zone, the unlimited and unsecured Target credit mechanism of the Bundesbank could in a few days increase by additional trillions. An end of the euro may then mean the corresponding complete write-off of these trillions. Since 2011, the Bundesbank, the Federal government and the system economists with preposterous arguments have denied these risks. The market sees it otherwise and no longer takes part in the absurd argumentation. The extent of fall of Target is now already in the long-term planning of many Federal budgets. A corresponding write-off by the Bundesbank would lead to their immediate insolvency. It may then be that the Federal government re-capitalizes these with many years’ tax receipts – thus with the tax receipts of millions of man-years of German work.

Already for years, the AfD has demanded in many motions the remittance and/or the recoverable securing of the Target balances – as well naturally the minimization of the German write-off and tax losses resulting from a German exit from the euro.


[trans: tem]