Boomerang Michael Lewis

He calls it the peeled third reality because the parting took a step clog up wards by falling into huge meats of debt followed by riots and governmental collapse in places like Greece. There ar umpteen lessons the contri scarcelyor can learn from this book as long as the reader reads it with a grain Of salt and does formulate lost in the excessive use Of stereotypes and racial remarks that Lewis accomplishs. Each statement he makes in the book is vital to make a cor resemblance further on to show how culture relates to politics and economic science. The most astounding cultural tinct I noniced in the book hat led to unskilled economic decisions was that of Germany.Lewis mentions on page 137 that the German great deal liked to be near sit but not in it. He relates this to the reader after mentioning his visit to the German red light district of Hamburg. Lewis asserts the claims that the German people argon infatuated with dirt, filth, sit, and are open in their railler y on this topic. However when you look at Germany and its financial status it is passably st qualified worldwide and is one of the strongest economies in Europe. It is the foundation for the European marrow banking system since the Bundestag had the strongest uncial system.Germany finished up being the nation that allow differents borrow property and Germany also houses the offices of the European Central Bank in Frankfurt. On page 145 Lewis mentions that the majority of Europe was indulging itself with loans in order to corrupt things that the people really didnt need. On a incline note, nations tend to pick up both good and unhealthful qualities from all(prenominal) other and this quality of excessive spending in a clipping where you dont need or bring forth the financial means is a bad habit that Europe picked up from America.However the German people did not thwart in eying things they could not afford level off though they gave loans to others who used the German s conviction rating to buy expensive cars and real-estate as you saw in Iceland and Ireland. This goes back to the cultural obsession with filth they were near the credit disaster but never partook in it personally. The credit boom never existed in Germany because of Germanys past. Germany was a nation which fell into hyperinflation post world war two and during that effect it cost millions to buy a loaf of bread.With that past history in mind the German people has always been frugal with their money and wait the politicians to do the same. That is why any politician regardless to what party they are from ordain not get elected in Germany if they are not fiscally responsible. The German people will not vote for them because these value from their past have now been ingrained into their culture and have constrain part of their identity. That is diametrical than over here in America where different parties have different approaches on government spending, investing and often end in stalemate or disagreement. and in this instance the German people gave in to the temptation and allowed their gibbers to get dirty spot they stood by and watched. The German bank gave money to Irish real-estate barons, to Icelandic banking tycoons, American supreme borrowers etc The substance losses that the German banks lost are silent being added up but the book mentions that they lost 21 billion due to Iceland, coke billion due to Ireland, 60 billion to American and billions more still needed to be totaled in Greek bonds. That means even though the German people tried to stay clean in the end the mess cease up in their laps.So while other countries misbehaved with German money the German people thought their bankers where making causationable choices by giving the money in the beginning(a) place. They believed that they were going to make more money for Germany and further their nation towards prosperity but sort of they furthered their nation in debt. At the end Of t he financial disaster Germany ended being one of the most affected nations even though its citizens and politicians didnt buy any luxurious items or invest in crazy schemes.The occurrence that the Germans had the strongest financial system led to their downfall since they had to put in the largest list of money onto the European Union Rescue Fund. The money they put in the fund would for example go to the Irish government who would give that money to Irish banks who would give it to right back to the German banks for defaulted loans and enkindle payments. So Germany was giving itself money in a cycle that was not alleviating the prow of the problem and was further perpetuating a cycle of debt.Sassy see currently in Greece with new austerity measures being debated on daily, the German people are sick of bailing come forth every nation for their mistakes. On the contrary if the German banks never gave those loans in the first place than places like Ireland and Iceland would have never defaulted. The fact that the German people gave money away in the first place started the problem. The more countries got loans the more other countries cute to get in on a piece of the action.So while Germany thought it was making pine decisions with safe returns it created a monster which was going to come back and be a burden for the very system which created it. Besides the cultural facial gesture of the whole situation the fact that Germany was a ember of the European yoke also led to its demise in regards to the economic aspect of the nation. This is because when the European Union was created it had certain benchmarks other nations would have to measure up to if they wanted to get evaluate into the Union.Many of these nations like Greece who had failing economies lied and falsified documents to inflate their Gaps and interest evaluate. All this led to a false sense of security when nations got accepted because while politicians thought the Union was getting strong er it was in reality degeneracy from within. The old idiom says that you are only as strong as your weakest link and in this case the European Union had a a couple of(prenominal) too many weak links. The politicians all put up facades and make their economies appear as ferocious lions when in reality they were just afraid cats trying to milk the cash cow which is the German banks.The only reason the German people agreed to all of this is because they still feel that they have to be accepted as a people and atone for the war crimes of their predecessors and past regimes. This act of kindness by the German nation as taken for granted and led them straight into a trap which decimated their financial security. The nations of Greece, Ireland, Iceland, Spain, and others became parasites who wanted more and more money expecting Germany to save them.This parasite- host relation is one that the German people might have to consider in the altogether off and simply let the European Union f ail and let nations and banks go into default. Being someone who prefers limited involvement in economics like Adam Smiths invisible hand, it is time for Germany to put its invisibility pretend back on and disappear into the shadows. If Germany continues down the same path it is On and tries to appease all the nation of Europe by giving out money it will eventually see the filth that currently occupies the streets of the new third world seep over into German soil.In this globalize world Germany needs to take a greater stand and do whats crush for its sovereignty. Germany needs to remove itself from the European Union and in doing so it will cause the collapse of many nations in the region so while this suggestion sounds harsh it is in the best interest for the German people. Yet if Germany wants to remain and be the savior for the EX. it has to take a greater consign and demand that its conditions be met since Germany is the one with the money.Germany can fix the situation by try ing to reduce the interest rates on the loans and try to get the borrowing nation to simply pay back the capital amount before them many any further investments in their own nation. This would tip to stagnation of many European nations because it will take them many days to pay back the billions they have lost. In doing this the GAP and growth rates of those actions will not move while Germany will be able to acquire money that belongs to it.