Krugman's blog:

As some of us have noted, however, there’s a peculiar selectivity in the use of Weimar as cautionary tale: it’s always about the hyperinflation of 1923, never about the deflationary effects of the gold standard and austerity in 1930-32, which is, you know, what brought you-know-who to power.

But that’s not the only piece of Weimar history that has gone missing; there was also the reparations issue, which as I noted yesterday has considerable bearing on the issue of how large a primary surplus Greece must run.

Thinking about this led me to an interesting question. We know that part of the reason large postwar reparations were such an unreasonable and irresponsible demand was the dire, shrunken state of the German economy after World War I. So how does Greece compare? The answer startled me:

:-(

The EU and German banksters are playing with fire.

Cheers,
Scott.

The argument seems clear enough to me.

You can't get blood from a stone, and if you try for too long you end up risking a huge backlash.

Inflation isn't the Worstest Thing Evar. And you can't get hyperinflation in a modern economy, with a multi-country currency, that is depressed with 25+% unemployment.

The EU and German banksters need to recognize reality.

Read it again. ;-)

DW:

Therein lays the dilemma faced by the government in Athens. The debt burden is so huge that the vast majority of the financial assistance provided by foreign lenders goes to debt and interest payments, instead of reaching the Greek people.

The European Union and the International Monetary Fund (IMF) has so far pumped 229 billion euros into Greece. Out of this striking figure, however, only 27 billion euros (11 percent) was spent on the provision of public services.
In contrast, Greece spent over 40 billion euros on interest payments, and 81 billion euros to redeem maturing loans. Together with the repayments made to the IMF, which stands at about nine billion euros, the total spending on debt servicing has thus far amounted to 132 billion euros, more than half of the total foreign assistance the country has received.

The standoff between the new Greek government and its European partners has so far not spooked global financial markets, as most investors believe that a compromise would be agreed upon in the end – as in previous crises – and a "Grexit" would be avoided.

Why should the Greek people, who just voted overwhelmingly for a new approach, continue to accept terms that continue to squeeze them, hasn't (contra the EU banksters' promises about the Confidence Fairy) lead to a growing economy, and just shovels money back to the EU banksters while they continue to suffer?

If something cannot go on forever, it will stop.

My $0.02.

Cheers,
Scott.

The Greek people aren't getting the money.

Prices on one item isn't an reasonable indication of inflation. Billion Prices Index - inflation in the US is too low. Where's the inflation? What happened to this reasonably sensible guy who posted here in 2002? ;-)

Where's this "continuous printing of money" that you're talking about? Entries in a spreadsheet at the Fed isn't money circulating in the economy.

But you apparently don't accept that an economy can have too little demand, so we're going to continue talking past each other. You might enjoy how Germany recovered after Weimar though:

Charles Dawes was the US budget director. In 1923, he was sent to Europe to sort out Germany's economy. Under his advice, the German Reichsbank was reformed and the old money was called in and burned. This ended the hyperinflation. Dawes also arranged the Dawes Plan with Stresemann, which gave Germany longer to pay reparations. Most importantly, Dawes agreed to America lending Germany 800 million gold marks, which kick-started the German economy.

Imagine that - spending money gets the economy going. (And no, the lesson isn't returning to the gold standard... :-/)

Cheers,
Scott.