Germany’s Secret Trade War

The evil Donald Trump is single-handedly starting a trade war that will wreck the global economy. That’s the gist of the story coming from the media. But a dig deeper shows the true picture isn’t so simple.

In fact, Europe and China have been waging economic war on America for decades—the United States just hasn’t responded.

One piece of news from Germany last week exposed this. Prof. Heiner Flassbeck, a former German secretary of finance, and fellow economist Friederike Spiecker accused the German government of cooking the books. In an article for Makroskop, published on January 26, they took a closer look at some of Germany’s exports numbers coming out of the statistics office. You’d think that these numbers were just reporting—measuring the economy and reporting on it—but that’s not the case. The figures, Flassbeck and Spiecker say, are based on a lot of estimates, giving a lot of room to adjust the figure according to what is politically expedient.

The Telegraph’s international business editor Ambrose Evans-Pritchard reported that Flassbeck said Germany is “cooking the books”—it’s trying to hide just how much the nation is exporting. The economists’ report concluded that the country’s economic growth last year was largely due to “an expansion of German mercantilism and more severe violations of the principles of free trade.”

The truth is, Germany is quietly waging economic war on America.

How? Through the euro.

Germany shares a currency with lots of poorer states, some of which are struggling to pay their debts. This makes the euro less appealing, so fewer people want to buy it, pushing the price down. If Germany used the deutsche mark, it would be an attractive currency that many people would want, so the price would be high.

The cheap euro acts as an invisible subsidy on German exports and an invisible tariff on its imports. Let’s use some rough numbers: Imagine if Germany used the deutsche mark and you could buy half a deutsche mark with us$1. A German car priced at dm10,000 would cost $20,000. Compare that to the euro, which is worth the same as the dollar. A German car worth €10,000 would only cost $10,000—much cheaper.

I’ve tried to keep the numbers simple to give you an idea of the power a weak currency can have.

Why do we watch this at the Trumpet?

The Bible talks about a trade war against the United States led by Europe and China. In many ways, this has already begun. Now with Donald Trump threatening to fight back, that trade war may soon come out into the open. But both Europe and China have been working to damage America’s economy for years. This trade war is an important step in Bible prophecy, and it exposes the ambition of both these powers to bring down the U.S.

You can read more about this in the April 2017 Trumpet, in Brad Macdonald’s article “Trade Wars Have Begun.”