Q1 data, published by the German Office of Statistics, show that despite the large upswing in the defense-related sector, the expected defense-driven “recovery” has not yet taken place and German manufacturing is stagnating. The new industrial orders cannot compensate for losses across the board in the sector. Germany is now at a crossroads: Either it understands that this is the wrong path, or it doubles down, entering a real Schachtian economic regime. This would include a top-down “militarized” management of the economy, as carried out by Hjalmar Schacht in 1933, when he became head of the Reichsbank under Hitler.
“Economic activity in Germany weakened markedly in Q1,” says a report published by the German Ministry of Economics. “After a brief improvement in sentiment at the start of the year, expectations among both businesses and consumers deteriorated again. Industrial activity was recently subdued, and construction recorded significant weather-related losses. In addition, supply bottlenecks and rising energy and raw material prices are weighing on companies. Consumer-related sectors are suffering from rising prices, weak demand and uncertainty.”
The statement continues: “Industrial activity weakened noticeably over the winter months. While new orders resumed their upward trend in February following a marked setback at the start of the year, industrial production has recently declined slightly. In light of the sharp rise in energy prices and heightened geopolitical uncertainty resulting from the conflict in the Middle East, leading indicators point to a deterioration in industrial activity in Q2.”
