Sunday, July 08, 2012

Europe Headed For The 1930's Again?

Is Europe mature enough to resist the demagogues and dictators this time? Are we?
A German newspaper has broken a major taboo by comparing the crisis engulfing the eurozone with the 1930s slump which ushered in Hitler, the Nazis and WW2.

The ghosts of those times still haunt the modern generation and is illustrated by a strong aversion to debt, to stock market investing and - increasingly - a distrust in the euro.

Recently, house prices in Switzerland have begun soaring as wealthy Germans pour their money into what they hope is a safe haven. Now the country's conservative daily Die Welt has drawn the parallels between the crisis and the dark days over 80 years ago.

'The spectre of the 1930s financial crisis that culminated in the rise of Adolf Hitler’s Nazi party and the Second World War is stalking Europe,' it said, quoting a Bloomberg News story.
In May 1931, Creditanstalt, founded in Vienna by the Rothschild banking dynasty and the biggest lender in what remained of the Habsburg Empire, suffered a run. Its collapse after a merger with an insolvent rival sparked a crisis that left Germany and central Europe strewn with failed banks, caused defaults in Europe and Latin America, knocked the pound off the gold standard, and forced the New York Federal Reserve by October to raise its discount rate by two percentage points.

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