Germany, the 10th plague

Ok, it’s a stretch, but the biblical story of the 10 plagues does come to mind.

One by one various member nations have seen their funding taken away. The process begins with interest rates spiking to the point where, for all practical purposes, they can’t fund themselves without outside assistance.

There has been blood in the streets of Greece.

And the latest spread of the contagion to French interest rates, however politically incorrect, does bring to mind the plague of frogs, which was closely followed Sarkozy’s begging for the ECB, only to be turned down by Germany’s still hard hearted Merkel.

So might it be with the 10th plague, the killing of the first born, which, in the case of the euro is Germany, we will see the final liberation of the euro zone from it’s enslaving institutional structure?

Maybe next spring? When the chauffeur drives up in a Nissan to take them to the promised land?

Watching those German rates closely!

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30 Responses to Germany, the 10th plague

  1. Matt Franko says:

    The President gets very close to the truth here:
    “President Invokes God in Jobs Bill Pitch”: “I trust in God, but God wants to see us help ourselves by putting people back to work,” he said.

    Of course the moron press corps turns it into a game of bible ‘gotcha’ with the Press Secretary… if Obama were to convert his legislation from just a “Jobs Bill” into a JG, it would be as though he lifted it right out of the OT imo… Resp,


  2. Will Richardson says:

    In theory I understand that Old Testament policy strictly controlled the labour and land markets but allowed more freedom in less important markets, albeit railing against hoarding (saving/speculating?)

    The Jubilee Centre has done some interesting work on this;


    Matt Franko Reply:

    @Will Richardson, Will, from the paper at the second link: “With regard to our relationship to God, we should remember that ‘money’ is a dangerous idol that seeks to replace God as the object of our worship (Matthew 6:24).”

    Mat 6:24 is the verse related to slaving for God or mammon (wealth)… so I dont see his connection to “money” per se and as far as “money” defined as state currency. In fact the Lord used an example of a woman’s savings desires in drachma (state currency) as a positive example in Luke 15 see my comment above. So one thing I see here is this author makes no distinction between state currency (noumisma) and silver (arguron) in the scriptures and from my review of the Greek scriptures, there is a precision of language in the scriptures on this distinction. So that is something he may want to look into.

    For me it keeps coming back to the JG and the ZIRP as the “weightier matters of the law” that were being left. A thought I had the other day was that if the leadership of the House of Israel was enforcing the JG and the ZIRP, the gospels of Matthew and Luke could not have been written… so perhaps these 2 critical issues should get our attention.

    Thanks for the link to this resource Ive bookmarked it. Resp,


  3. SG says:

    Warren, how long do you think it will take till we get to the 10th plague and how much market must we endure. My guess would be months as the germans are not inclined to be rushed into to anything blindly.


    SG Reply:


    how much market pain



    Agreed. Might be accelerated by failures of current proposals, US deficit reduction efforts, WTI rising to Brent levels as the spr drawdown ends.

    the range of outcomes remains extreme


  4. Adam (ak) says:


    I am not sure about that because “the markets” know perfectly well that the rules will be bent if the German yields rise and this belief itself may act in a similar way to the official engagement of ECB.

    For example the German budget deficit – was it always within the Maastricht limits?

    What will happen (obviously if the political instability is confined what is not guaranteed) is a decade of stagnation and creeping social unrest in Europe.

    A lost decade or two. The same creeping process which affected the richer Latin American countries like Argentina or Chile in 20th century.

    The ruthless social experiment of engineering a new breed of Europeans by forcing people from the fringes (Greece, Portugal, Spain, Ireland) to follow the Eastern Europeans (Romanians, Bulgarians, Poles, people from the Baltic states, etc) and migrate to the old industrial centre (Germany, UK, France, Italy) will also fail because the old industrial centre itself is going to linger in a protracted recession. Also – while Poles do assimilate well in the UK and Romanians thrive in Italy (and in the past in Spain), the German culture is a bit less welcoming.
    I have never lived there, I only spent 3 months working as a farm hand in Norway almost 20 years ago (a rather abysmal experience) but I don’t think that the Greeks will assimilate any better than “Turken” and “Yugo”.

    The Americans have usually stimulated the economy in the 20th century by increasing the military spending (source: M.Kalecki, The Last Phase in the Transformation of Capitalism). This lever is not available in Europe. The consumer / mortgage credit bubble engine of growth is also broken.

    The Europeans dream that the Chinese will increase their import from Germany. I would bet that at some point the Chinese will actually start competing with Germany and this is not so distant future.

    At the same time Europe depends on Russia in satisfying its needs for energy. The only bright point is actually the encouragement to develop and commercialise the new energy efficient technologies in Europe.

    Reading the sobering report about Greece (see the last Bill Mitchell’s post) leaves an impression that the European ruling oligarchy is not only cynical and ruthless but also clueless about how the economy works. The people like Merkel, Sarkozy, Cameron, Berlusconi will never facilitate any change because they are a product of negative selection based on intellectual capabilities. These who may replace them are faceless socialdemocratic or conservative party apparatchiks.

    Anyway I am very happy that I left Europe long time ago and will probably never go back there.



    and all they need to get it all right is recognize the euro zone deficit needs to be larger.
    too bad…


  5. Walter says:

    What has German cds done over last weeks (months)?


    ESM Reply:


    Moved from 40bps to 120bps at end of Sept, now back to 90bps. Basically, creditworthiness is a non-issue for Germany. The market recognizes that a credit against German taxes is worth more than a credit against the taxes of any other EMU country. So if Germany leaves EMU, the German version of the Euro will be worth more than a Euro (and certainly any rump Euro).


    Adam2 Reply:

    @ESM, I am with ESM here. I am not so certain German interest rates will go up.

    If the Euro is actually the German Euro wouldn’t interest rates just follow ECB policy?



    yes, but it’s not

    Walter Reply:

    If cds already tripled, doubled, then interest rates may follow quickly.

    I am afraid that German creditworthiness will be an issue. They, as strongest member state, benefit from their TINA status, but as currency user with debt/gdp over 80% and rising they are just as much in ponzi as all the others.

    If I understand Warren correctly, he means we have to wait, not until Germany leaves the eurozone, but until German rates will start rising sharply. Only then they will support France’s request to use ECB as backstop.


    Zaid Reply:


    What you’re saying makes sense if the markets were rational. But you get a significant pick-up in yield with the overnight deposit facility at the ECB (now set at 75bps) than you get investing in near-term German government bonds. So I think ESM is partly right because the market views the German government obligations as more credit-worthy.

    Of course, this is also the fault of the ECB’s open market operations because they really should be setting the rates to meet their target. If German yields begin rising sharply, I doubt the Germans will sit around for long before they decide to loosen controls on ECB bond purchases.

  6. fais says:

    If we assume that Germany is one who spends, so their bond yields seem relatively unattractive from a risk / return perspective. German 10yr yields are lower than in the United States and Great Britain!


  7. Mario says:

    nice parallels. I guess the plague is moving north then on a scale of about 4,000 years or so. LOL I hope it doesn’t catch the Atlantic trade winds and head west!!!

    great call on german rates. I should have thought of that one!!! ;)



  8. Save America says: Marting Armstrong just gave an interview, he says no way the Euro survives, they will not be smart enough to use this “crisis” to consolidate debt issuance to one central authority. Anyways I was just in Dubrovnik where a student of Mundells (the 1999 economics nobel prize winner who introduced the Euro) was now a tour guide!/photo.php?fbid=297029716989997&set=a.297028973656738.93581.100000489141854&type=3&theater And she told me the euro has no future. I am in Plaka, Athens, Greece now with my green mosler econ T-Shirt, everyone here is very nice and I even saw the riot dog. Prices are still not what I would have hoped as a US Dollar holder but much cheaper than switzerland and the people are friendlier by far.


  9. Geoff says:

    If you assume that Germany is a currency user, then their bond yields look quite unattractive from a risk/reward perspective. German 10yr yields are lower than the US and UK!


  10. Matt Franko says:

    Warren, I’ve always transliterated your name “Mosler” as: ‘One who operates in the way of Moses’… but before just based on the ‘the natural rate of interest is zero’ (No interest/usury allowed under the Mosaic Laws) and the ‘Job Guaranty’ (Households of Israel Guaranteed access to the enjoyment of the allotment of the land under the Mosaic Laws)…. but now the plagues oh no say it isn’t so! ;) Resp,

    PS Thanks again for all you do here….



    Thanks, and most incitefull!

    Actually, last I heard, interestingly enough, there was no historical evidence for Moses or Jesus.


    Jim Baird Reply:


    Moses, maybe – the stories were clearly not written down until most of it had passed into legend, so who knows? But then every competent historian had dismissed the story of Troy as pure legend until an amateur who didn’t know any better went out and actually found it.

    But for Jesus, you just have (IMHO) too many sources too close in time (even if you dismiss the purported historical accounts in the NT) for him to be a mere legendary figure. It would be like people in the early 1900s inventing the figure of Abraham Lincoln. As far as I’m aware, there are no reputable scholars (even rabidly antichristian ones) who accept the “Jesus Myth” story. It’s pretty much a fringe conpiracy theory.



    no cross references for Moses, including nothing in the Egyptian records last I checked.

    no cross references for Jesus in Roman records, other civil records, etc. last I checked.

    Jim Baird Reply:


    “Occasionally people ask why there is no record of Jesus in Roman records. The answer is that there are no surviving Roman records but only highly parochial Roman historians who had little interest in the comings and goings of minor cults and were far more concerned about Emperors and Kings. Jesus made a very small splash while he was alive and there was no reason for Roman historians to notice him.”


    makes sense.
    but no records none the less

    Matt Franko Reply:

    @Jim Baird, Jim, I’ve come to the point where I believe The Sacred Scriptures, mathematics, and the archaeological record.

    Here is Codex Sinaiticus, a near contemporaneous documentary record (Carbon dated) and now on the internet for the first time last year:
    then you have the Dead Sea Scrolls… in any case, no matter how you come to these economic issues with a view towards righteousness (I really dont care how at this point), I believe a big issue for today is that these economic issues go deeper than the orthodoxy of Church leadership has insight into. There is Truth in the Scriptures that Church leadership is missing, without a complete understanding of how an economy runs under a state currency. The Biblical accounts and Paul’s epistles are loaded with economic parables, economic metaphors, and even economic doctrine… and you cant really understand all of the Truth in them without a grounding in MMT (Keynes: “Modern” money is 2,000 years old).

    Savings Desires (Luke 15): “8 “Or what woman having ten drachmas, if she should ever be losing one drachma, is not lighting a lamp and sweeping the house and seeking carefully till she may be finding it?
    9 And, finding it, she is calling together the friends and the neighbors, saying ‘Rejoice together with me that I found the drachma which I lose!'”

    What is the purpose of taxes? Certainly not so government has money to spend (Romans 13): “5 Wherefore it is necessary to be subject, not only because of indignation, but also because of conscience. 6 For therefore you are settling taxes also, for they are God’s ministers, perpetuated for this self-same thing.” (really Warren’s 9mm)

    External liabilities: Peter was fishing solely to acquire the external currency needed to pay the Herodian tribute (the fishing rights in the Sea of Galilee were not part of the allotment of the land that was foundational to the economy the house of Israel operated under)(Mat 17:27): “go, cast a fish hook into the sea, and pick up the first fish coming up, and opening its mouth, you will be finding a stater. Getting that, give it to them for Me and you.”… and He loaded them up with fish before He took them away with Him so they would have had enough external currency to not run afoul of the tax liabilities while they were gone…

    Then you have the 10,000 Talent silver debtor (in convertable ‘money’)…. fondness for silver (ie not state currency) being the root of all evil… this goes on and on and on in the scriptures and few if any teachings out there exhibit a full understanding.

    Then come back around here to what I view as Warren’s main “Mosler/Mosaic” issues/laws; the ZIRP and the JG (Mat 23:23): “Woe to you, scribes and Pharisees, hypocrites! for you are taking tithes from the mint and the dill and the cumin, and leave the weightier matters of the law,…” I believe these 2 “weightier matters of the law” (ie the ZIRP and the JG) are exactly what He was talking about here, as it looks like the leadership was enforcing all of the other economic laws except these. (See Lazarus and rich man)

    One way or the other, I think Warren has been given great insight into these economic issues that I can see are very important to God, thru Moses and the Lord. And even if he is sort of kidding with the reference to the plagues here, I’m going to be giving this angle some more thought for sure I can tell you ;)… Resp,



    Zaid Reply:

    @Jim Baird,

    Cross-references are not perfect, but I etymology offers clues. Tut-Mose, or Thutmoses as wikipedia spells it ( was the crown prince around the time of Akhenaten. Not much is written about him in Egyptian literature presumably because it was destroyed after the old priesthood abolished the world’s first monotheistic religion. To find out more about this, read about the Amarna Revolution.

    More from the same link:

    “In his 1939 book Moses and Monotheism Sigmund Freud presented the idea that Crown Prince Thutmose’s younger brother Akhenaten was associated with the Biblical character Moses. The idea was more recently (1998) reconsidered by Egyptologist Jan Assmann in Moses the Egyptian.”

    Others have drawn parallels between the story of Moses and Akhenaten himself. To their credit, the body of Akhenaten was never found, and it is very well possible that he was exiled along with the followers of his newly founded monotheistic religion.

    Jim Baird Reply:

    Matt –

    You should pick up David Graeber’s new book “Debt – the first 5000 years”. He talks a lot about the various biblical references to debt and and money. Of course, most of his stuff is familiar to MMTers who’ve read Innes and Randy Wray, but he puts it together in an interesting way and adds a lot of stuff from China, for instance, that I didn’t know about before.

    Greg Marquez Reply:

    @WARREN MOSLER, Isn’t concluding that Jesus did not exist based on absence of reference to him in Roman records a bit like concluding that Warren Mosler does not exist based on lack of references to Warren Mosler in the leading economics textbooks? The same forces which keep MMT from making it into mainstream economics discussions were at work in the first century as well.

    Methinks the lady doth protest too much.



    all I said was last I heard there’s no historical Moses or Jesus.

    (including the History Channel…)

    And whether or not there’s ever an historical Warren Mosler won’t be my problem

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