Germany: Old Economy Doing Just Fine

For the past couple of years, Germany has been the engine of the Euro zone economy.

Turning bolts, Germans were told - often by other Germans - had no future in Germany. The persistence of heavy manufacturing symbolized the country's inability or unwillingness to transform itself into a modern, services-oriented economy like the United States or Britain, two oft-used yardsticks.

Today, the manufacturing sector in Germany is growing as a proportion of the country's total economic output, and Germany looks set to outpace far larger economies like China and the United States as the world's largest merchandise exporter for the fourth year running.

In addition, making all manner of valves, motors, machine tools and robots is providing Germans with something rare in the global economy: shelter from the storm. Thanks to bolt-turning, the German economy grew at an annual rate of 6 percent in the first quarter of this year.

In the US, we are told it's all services baby. Sell houses (like that's working), or sell securities (the revenue model is vanishing in a puff of smoke), or maybe sue people for patents on stuff you never made....

Not working so well, and that's because brokering is essentially a parasitic activity. We have been taking other's people money and we've been....I don't know...I guess employing no account coke head brothers-in-law or something.

Our economy is far closer to Spains during the height of its colonies now than it was in 1929. Then we had a robust manufacturing sector that could power a recovery, once demand picked up.

Right now, however, what does the US really make?

Damned if I know.