"Thanks for the good work. Hope everything is just fine at your end!

"I am happy to comment on Bernard Tan's analysis, but I guess you may have linked the wrong paper. Please check.

"Again, I am happy to comment against the background of my "Beyond Repair" book that I published in April 2010, where I exactly outlined that Germany's fiscal policy is actually a big mess, given the numerous shadow budgets that are not accounted for in official figures.

"For example, unified Germany has not repaid one Euro cent of the "German inheritance fund", i.e. East Germany's debt accrued up until 1989. We simply pay the interest indefinitely. There are a least a dozen of these kind of funny budgets floating in the background.

"The EFSF [Ed: European Financial Stability Facility], to be ratified in Germany on Sep 23rd, is clearly the most recent highlight of government shadow banking... The EFSF is not accountable to anyone and has no obligation to publish any information... It is outside of the EU legal framework. It is supposed to do the "dirty work" that is now done by the ECB (accountable, with the obligation to publish data)... The Germans' life on an island of illusion and delusion...

"FYI: In July 2011 I published the Second Edition of my book ("Beyond Repair- Germany in Systemic Change" - only in German...), since my publisher claims, demand for the book in Germany is only outstripped by the demand for 1kg gold bars..."

And:

"Fully agree with Bernard. Most German economists (or economists covering Germany) seem to ignore these simple figures and trends.

"Many high profile economists are usually working at one of the well-known economic research institutes. These institutes are usually linked to a left-wing or right-wing political party (CDU, SPD). All these economists are public sector employees. It is obvious that many of these academics do not even grasp what's going on, since none of them has enjoyed an education on a trading floor.

"All are enrolled in the Keynesian beauty contest (I know everything better and therefore I will advise the ECB, government what to do) than rather analyze market trends. That is why none of them has seen gold to outperform in the last ten years. That is why all of them usually believe that Greece can manage a fiscal / economic turnaround...

"Apart from that no German government (present and past) had ever any interest to publish a consolidated "fiscal balance sheet" (federal budget, shadow budgets like the German inheritance fund, Länder and local budgets, health care, pension, etc...). Similar to the US...

"Also, if you work for Deutsche Bank or any other high profile bank you will not criticize the government (as an economist). That will damage the bank's reputation and/or put your career at risk. Also, no access to FinMin officials if you start to continuously criticize Berlin in public... And all of these banks had also been bailed out by Berlin in the past (except DB of course).

"So you better keep quiet."

David Fuller's view Many thanks for these informative views and congratulations on your prescience and also financial success with "Beyond Repair - Germany in Systemic Change". What a pity that it is currently only available in German.

These emails came from Erwin Grandinger, a friend for many years and a name that veteran subscribers will recall because his occasional, informative reports have graced this site from time to time. Erwin also provided an English version of his introduction to Beyond Repair which was posted on 5th May 2010.

Euroland remains the main focal point of today's economic concerns and it is worrying to see how quickly Europe's growth engine - Germany - has seen its economy weaken recently.

There is a silver lining to this cloud for Subscribers. After the USA and Japan, Germany has more world-class multinational companies than any other country. Japan's top firms are handicapped by the yen's strength. The euro is likely to remain a soft currency and Germany is a global leader in quality engineering.

Euroland's crisis is creating another opportunity to invest in Germany's best companies at reduced prices. Two of my favourites are Siemens and BMW. The lower these shares move in the short to medium term, the more attractive they become for value investors.