Germany Braces for Deflation

German leaders fear the German public running out of cash this winter:

On Tuesday, Reuters reported German authorities are moving to acquire emergency cash deliveries to keep their economy running in the event power outages take down electronics-dependent methods of payment.

People familiar with the government plans reported that the Bundesbank, Germany’s central bank, had begun hoarding extra billions in the event there is a surge in demand for cash, or limits placed on withdrawals.

Government officials and bank authorities are also looking to secure the distribution mechanisms for the cash, giving priority fuel access to cash transporters, according to the sources. The planning sessions have also reportedly included multiple financial industry associations as well as financial market regulator BaFin.

The Reuters article noted, “Although German authorities have publicly played down the likelihood of a blackout, the discussions show both how seriously they take the threat and how they struggle to prepare for potential crippling power outages caused by soaring energy costs or even sabotage.”

Another illustration of how digital currency is a complete non-starter in any scenario that involves interrupted electricity flows. Which also goes for electric cars and the digital economy in general. If the power goes out anywhere along the way, you’re not going to be watching YouTube videos or streaming Netflix.

And yes, the inability to spend credit money is extremely deflationary. As with generals, economists always prepare to fight the last banking crisis.