German Economist Warns: the Financial Crash Will Not Be Linear

Folker Hellmeyer, one of Germany’s most popular economists, warned in an April 17 interview with PrivatInvestor TV that the German economy is running into a wall, and that the crash will rapidly become non-linear.

The world economy is witnessing a fragmentation, Hellmeyer explained, with the Global West decoupling from the Global South which, measured in purchase power parity, now represents 70% of the world economy, and is continuing to grow and to create its own institutions. This decoupling he calls “masochistic self-flagellation of an economic nature, with a loss of prosperity”. Germany and Continental Europe are economic systems based on importing raw materials and semi-finished products, which are transformed with high energy and then exported. “We are corrupting this model”, in his view, as we cut ourselves off from import markets and decouple from export markets.

“If we in the European Union and European countries continue the policy approach of the last 10 years, we will shrink increasingly, because it’s like – this is also an economic law – it’s like falling dominoes: the last ones fall faster. At the beginning, it’s like a dam that only has a very small crack, you only see a small ripple and then at some point the dam bursts. In other words, the risk is there,” Hellmeyer said.

“We need a complete reorientation of Europe. This applies to foreign policy, so that we have our own interest-oriented foreign policy. We are not perceived in this way; when Mr. Scholz addresses the UN General Assembly, the hall is empty! This has never happened in the history of this country since 1949…

He called for a “reorientation of education policy, infrastructure policy, energy policy, tax policy and de-bureaucratization. But the decisive factor is the energy sector. And here Germany, as the largest industrial nation in the European Union, is a burden for Europe as a whole and a burden because we are not meeting the responsibility that comes with this size. And it is not just a responsibility for the others, it is a responsibility for the people here and the companies here to generate trust once again.”