German growth depends on its currency...

During the past decade Germany has relied on low prices and wages, in sum-up internal devaluation, to keep its exports competitive which can be said to be a good policy in international-trade. Both internal devaluation and depreciation of domestic currency affect prices to increase demand, but with a difference... The former directly lowers prices by a consistent monetary policy while the latter decreases prices relative to income by depreciating home currency to increase demand for exports...  However, the latter option was not available to the country since it is a part of currency union and shares its currency with many other countries... External devaluation was not possible... And, the trick, internal devaluation, did the job... Apart from China, Germany is another country which has considerable surplus in international-trade... Its foreign-trade policy can be said to be a success as far as its exports and surplus is concerned... But, lowering prices and wages are constrained by lower nominal price and wage rigidity, a corner-stone of the Keynesian Economics because it helps clear the markets and achieve full-employment, another goal of policies, after price-stability... But, the trend/pattern we have found that there is nominal downward wage rigidity but prices show no such pattern... there has been a consistent pressure on prices, in almost all the developed countries, to go down which has reasons, too... Because, in advanced countries, as compared with developing ones, where population growth rate and pressure is less, supply easily outstrips demand and in case of a deteriorating external environment, inventories easily start piling-up and economic activity slows-down and especially after the Minsky-moment which says there is an increase in risk-taking and debt after a period stability... Too much debt is responsible for low demand... Economists say that inflation erodes the value of debt because value of money goes down... It is good for the debtor, but bad for the creditor... Economists look to favor the debtor and ignore the creditor who has worked to earn that income; therefore, i think the economists should start favoring the creditor... Low real interest rates are good for investment, but bad for savings... Savings are discouraged and investment is encouraged... The question is how is this going to work because without savings how investment is possible...? To keep the savings match investment, or the other way, too... We need to keep savings attractive enough otherwise we will fall in the liquidity-trap because people will prefer accumulating reserves instead of bank deposits... therefore, to avoid liquidity- trap the central-banks must keep the bank deposits attractive... Very low levels of interest rates are not good for savings and investment, too... However without its own currency Germany will find it difficult to move from here... Further, internal devaluation will require Germany's own currency... In internal devaluation prices can not fall below the lowest denomination of Euro and for further fall in prices Germany will have to float a lower denomination of Euro... And, external devaluation is not possible without its own currency and the gains will be shared by the other countries in the Union...