Since the global financial crisis of 2008, the ECB has pumped an additional six trillion euros into the market. Experts speak of a money overhang that is now being discharged in inflation. A dangerous chain reaction has long since set in.

“Peace is the greatest good,” the “Greens” are currently placarding. But violating monetary stability, one would like to shout at them, is not a trivial offense either. It’s still Putin’s war, but it’s our inflation.

Two culprits for the now obvious destruction of wealth and purchasing power can be named, neither of whom live in Moscow. This may even be the reason why none of the governing parties wants to talk seriously to the citizens about the cause and effect of this century inflation.

Both hands of every government politician are currently pointing indignantly in the direction of the Kremlin, so that no hand is left to grab your own nose.

War and inflation have one thing in common. Only the state can set both in motion and only the state can end them. Capitalism may be evil and ubiquitous in the eyes of its critics. But waging war, printing money and setting interest rates, he cannot do that by his own strength and glory.

So when we talk about inflation, we are talking about the core competence of the state. He owns the central bank. He appoints the President of the ECB and the head of the Bundesbank. The consequences of inflation are of the highest economic, political and social relevance for Germans. The narrowing of the political debate to the question “heavy or light weapons for Ukraine?” therefore means a banalization and ultimately also a fictionalization of politics.

The victim of inflation, which thank God differs from the victim of war, is physically unharmed. The salary transfer from the employer looks the same as always. The bank statement from the savings book or share deposit has no special features.

But at the latest at the shop counter, in the car dealership and in the travel agency, at the gas station and also when paying rent and ancillary rental costs, it becomes apparent that something has slipped that is robbing money of stability and giving many people certainty about the future.

Which brings us to the culprits who have worked hand in hand for years. Because the European debt politicians burned the trillions that were printed for them by the European central banks. What-Ever-It-Takes was the rallying cry of a crazy time. The Americans would call those involved “Partners in Crime”.

The fact is: since the global financial crisis of 2008, the ECB has pumped around six trillion euros into the market. This means that the amount of central bank money in the euro area has increased more than sixfold since 2008. The lion’s share of this money has no economic value, i.e. neither additional sales nor additional profit, which is why the experts also speak of a money overhang.

This money overhang is now being discharged in inflation. Professor Hans-Werner Sinn puts this overhang at five trillion euros and says: “The five trillion euros are powder kegs in the basement of the ECB. Part of the barrels caught fire due to the effect of the increasing demand of the states that got into debt. The spark was the supply shortage caused by Corona.”

All the promises of the German government – Lindner: to tackle rising prices is “top priority” – are intended to calm, but can not help. The force of the events is too great for that. A chain reaction has long since started. More explosives are on their way to ignite the remaining powder kegs as well:

Explosive device 1: The energy markets cannot calm down like this. The war in Europe, the monopoly-like structure of the oil companies and the German dependence on imported energy, which is exacerbated by the simultaneous phase-out of coal and nuclear power, create the perfect storm for price developments.

Explosive device 2: The markets for raw materials and semi-finished goods have tightened due to the coincidence of the pandemic and war. In many places, the supply chains are still broken. Global demand and global supply currently do not match in many product groups. An increase of 33.5 percent compared to April 2021 in the prices for semi-finished goods has only just been measured.

Explosive device 3: The victims of the past price development, at least where they are organized in unions, will defend themselves with all their might against the reduction in their standard of living and the clouding of their future prospects. The bosses of the individual unions, above all IG Metall, have no choice but to go to the barricades for their members. The price spiral drives the wage spiral. And soon the wage spiral will drive the price spiral.

Explosive device 4: The state debtors are not very insightful. They are in the process of further expanding the expenditure financed on pump – in southern Europe, but not only there. Without considering financial losses, social relief packages are put together in Germany, coal and nuclear power plants are taken off the grid and the largest debt-financed rearmament program in German history begins.

Explosive sentence 5: In this situation, the ECB would have to increase the value of money, i.e. raise interest rates. But that’s exactly what she doesn’t dare to do. It is the prisoner of its policy of purchasing shares and bonds with an associated zero interest rate policy, because the highly indebted countries of Greece (193 percent of GDP), Italy (150 percent of GDP), France (112 percent) and Portugal (127 percent) can significantly reduce their debts no longer bear the increased interest rate. You are not productive enough. You are addicted to cheap money. Effectively combating inflation triggers a deep recession for them – and possibly not only for them.

Explosive sentence 6: There is currently no politician in Germany who, equipped with professional competence and personal credibility, could seek serious dialogue with the citizen. Christian Lindner is not a second Karl Schiller and Robert Habeck is not a new Otto Graf Lambsdorff. But someone would have to talk to the voters about performance and productivity and thus also about the threatening overload of the German national product.

Conclusion: The wondrous increase in money is reaching its natural limits. The German prosperity of the past 15 years was the best prosperity money could buy.

Gabor Steingart is one of the best-known journalists in the country. He publishes the newsletter The Pioneer Briefing. The podcast of the same name is Germany’s leading daily podcast for politics and business. Since May 2020, Steingart has been working with his editorial staff on the ship “The Pioneer One”. Before founding Media Pioneer, Steingart was, among other things, CEO of the Handelsblatt Media Group. You can subscribe to his free newsletter here.