The Bundesbank, Germany's central bank, released this statement yesterday:
"The cyclical outlook for the German economy has dimmed and there are even indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013."
This was less a prediction than a recognition of reality. German industrial output fell 2.6% in October.
By bankrolling Greece, Portugal and, implicitly, Spain, Germany has now joined the crowd. The debt problems in Germany are now beginning to catch up with the debt problems in Southern Europe. Why? The bailouts!
Bailouts always raise the indebtedness of the country or political entity doing the bailing. Germany is doing the bailing.
It is now time to start the clock on Germany. How soon before folks wake up to the fact that Germany can't pay its debts either.
The road to Greece is beginning to get crowded.
Who will be the first major country to follow the Greek script -- Japan, Germany, the US? It is just a matter of time now.