Germany warns on ‘crisis after crisis’

If any country knows what hyper-inflation can do to an economy it's Germany. Lately there has been some mildly promising signs that the economy may be bottoming out. If the economy starts to grow later this year, the current deflationary period will change into mild and then an uncomfortable inflationary one. It is ironic that it will be an improving economy and it's accelarating velocity of money that will let the inflation monster out of it's cage.-Lou

Germany warns on ‘crisis after crisis’

The world could face high inflation and a “crisis after the crisis” when the global economy recovers, Peer Steinbrück, German finance minister, has warned.

The comments, in a weekend interview, are the latest sign of concern from Germany at the extra-loose monetary policies conducted by central banks around the world and the ever-larger fiscal stimuli being unveiled by governments.

“I am concerned that the countermeasures we are seeing around the world, financed by enormous amounts of debts, could be paving the road to the next crisis,” Mr Steinbrück told Bild, a tabloid daily.
“So much money is being pumped into the market that capital markets could easily become overwhelmed, resulting in a global period of inflation in the recovery.”

Mr Steinbrück’s warning comes after Angela Merkel, chancellor, told the Financial Times last month that pumping too much money into reviving global growth would create an unstable recovery.

German officials fear the liquidity being injected into financial markets could prove difficult to reabsorb, creating long-term inflationary pressure and, possibly, new asset price bubbles.

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