Anthony Peters, SwissInvest Strategist
Luigi Pirandello has also lent himself to misquotation with his masterpiece “Sei personaggi in cerca d’autore” (Six Characters in Search of an Author) but it is rare to find a central banker digging into Goethe’s “Faust”. This has just been done by BuBa President Jens Weidmann and I take my hat off to him.
Let me explain. Goethe is not just some dead German playwright but is perhaps one of Europe’s greatest polymaths. Apart from writing some of the greatest plays and novels not only of the German language but of any language, he also produced what I personally believe to be possibly the most perfect poem ever written (Ein Gleiches) as well as being a practising lawyer, a minister of state and producing a considerable body of scientific work on plant morphology and a theory on colour and light refraction.
However, it did reflect the unfulfillable dream of a unified Europe under one central leadership, preferably German.
Weidmann did not dig into “Faust. Der Tragödie erster Teil”, the story of Faust’s famous pact with the devil which Christopher Marlowe, a British contemporary of Shakespeare, had also worked on in his play “The Tragical History of Doctor Faustus” but took his references from the second part, simply known as “Faust II” (1832) which Goethe had published shortly before his death and a full fifty years after he had begun working on the Faust material in “Faust, Ein Fragment” (1782).
The play is immensely complex with such deep references that reading it without considerable prior knowledge of the Classics and Renaissance culture is a lost cause. I could go on about how the classical dramatic “troika” of the unity of time, place and action are buried, once and for all, in this play but that would possibly be boring but most definitely patronising. However, it might be worth noting that German theatre rejected the French use of the three unities and pursued the English form of drama established by Shakespeare and his conteporiaries – Marlowe included – and brought to the German stage by Gotthold Ephraim Lessing.
Alas, Dr Weidmann cites the first act of Faust II which sees Mephistopheles, playing the role of a fool, saving the imperial finances of the Emperor – and so of the entire Holy Roman Empire – by introducing the use of paper money instead of gold to encourage spending and fostering economic recovery. This reference is quite clearly Weidmann’s retort to ECB President Mario Draghi’s snipe at him during the press conference after the last ECB meeting. The Holy Roman Empire was of course in its full title the Holy Roman Empire of the German Nation and was neither holy nor Roman and, strictly speaking, not an empire either.
However, it did reflect the unfulfillable dream of a unified Europe under one central leadership, preferably German.
Japanification?
If one does digs into European history, one discovers that the last hope of unity was faded after the death of Emperor Charlemagne when, following the battle of Fontenoy (841) and the Treaty of Verdun (843), the Frankish empire was split into three and divided up between his sons creating what were to become France and Germany – the treaty itself is the first significant document to be written in two forms, thus sealing German and French as separate languages too. For the subsequent 1,114 years they remained at each other’s throats but have since, by decree, become the best of friends in perpetuity by way of the 1957 Treaty of Rome.
Weidmann intended his speech and his reference to Mephistopheles and the money printing to point towards the risk of creating rampant inflation. I see his point but having watched Japan over the past twenty years – and I wish they’d stop telling us that we are not in “Japanification” mode – I see money being printed day in, day out, with no significant inflationary back-lash.
Beyond that, the BoJ is on the wires this morning with yet another round of easing and the announcement that it will extend its bond buying programme by another ¥10trn to stand at ¥55trn. Weidmann is now a lone voice in the desert as the BoJ would admit that the easing has taken place as much in order to keep the ¥ exchange rate down as it was to support recovery – more of the race to the bottom. Was it not Sun Tzu who wrote in “The Art of War” that one should never enter a fight which one knows one cannot win?
Weidmann looks a bit like that poor old polar bear standing on an ice floe drifting South but any central banker who has read or seen “Faust II”, and who has the courage to quote it, gets my vote…