Mr.Cameron Goes to Germany

The British prime minister has a monetary message for Germany...

DAVID CAMERON has gone to Germany, writes Paul Tustain of BullionVault, to explain nicely to the Germans that actually you can print money without causing a Weimar, or Third Reich, hyperinflation. He will be told by Angela Merkel that you cannot be sure.

Both are right. But curiously their respective policies would fit much better if they were reversed.

Printing money in moderation and from a position of unarguable financial strength, like Germany's, is the right course for the Euro. They could safely now print precisely because they have not done so these last 60 years.

Conversely the British do have a nasty money-printing problem, and it is because it is now clearly habitual, and has not yet been disastrous, that it has become a fix employed casually to repair any temporary economic problem. In these circumstances it really is as dangerous as Mrs Merkel believes.

We look set to prolong opposite and wrong policies in both Britain and Germany. Ultimately it is likely the Germans will start to print, and then the Euro crisis will abate. As the Euro crisis eases – at least for its stronger members – Mr Cameron will be able to say "We told you so". But he may not enjoy it for long. The British will continue printing, and Mrs Merkel will soon have the same message for us.

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