Record Inflation Sets Stage for a New Euro Crisis
Eurozone inflation hit 10.7 percent—higher than expected—according to provisional Eurostat data published on Monday.
Germany needs high interest rates. Half of Germans rent their homes. In general, they have few assets or investments, and they keep their savings as cash in the bank. Ten percent inflation destroys those savings fast. They need higher rates to bring inflation down.
France and Italy need them lower. These heavily indebted nations struggle with the opposite problem. Banks are reluctant to lend, and without cash their economies could grind to a halt. On her first day on the job, Prime Minister Giorgia Meloni attacked the European Central Bank for raising rates too hard, too fast.
The eurozone was designed to provoke this sort of crisis that would lead Europe to integrate more closely. In 1984, Herbert W. Armstrong wrote that an economic crisis beginning in America “could suddenly result in triggering European nations to unite as a new world power larger than either the Soviet Union or the U.S.”
Trumpet editor in chief Gerald Flurry wrote: “It is very difficult to unite nations into ‘one mind’! … Mr. Armstrong had profound insight in specifically forecasting that the catalyst for this dramatic unification would be a massive financial crisis ….” He concluded: “Watch the economic situation in America closely, and its effect on Europe—and see if this dramatic prophecy from Mr. Armstrong doesn’t come to pass just as he said it would!”
Learn more: Read “As You Struggle With Inflation, Watch Germany.”