Construction costs are currently skyrocketing

Of course, our currency, the Euro, has also massively lost value. That must not be forgotten. The Ruble has appreciated immensely against the Euro and also the Dollar. Since the Russians export little, a strong Ruble should suit them very well. Now that everyone is paying nicely in Rubles. But even the Polish Zloty is getting stronger. We are quietly losing value against many currencies.

That is not true, I wrote that in a previous post. The aging of society goes hand in hand with more saving and investing. This results in an increased demand for investments and less in consumption. That pushes interest rates down. Japan is the best example. In the USA it looks different. Therefore, there will inevitably be a higher interest rate there and capital will flow there.

Whereas of course the baby boomers are slowly all shifting from the accumulation to the withdrawal phase, i.e. withdrawing capital from the market and consuming it. According to the theory, that would rather speak for rising interest rates. I have heard the theory at some point as well and it certainly has a kernel of truth. But I find it somewhat local for practical application ("Money will flow away") and it is overlaid by other effects that are certainly much larger, such as central banks quickly buying 30% of a country's total debt.

The problem with spirals is that they are hard to stop once they have gained momentum.

In Europe, enforcing wage demands requires a) trade unions and b) industry-wide collective agreements. Both are infinitely(!) weaker than in the 70s. I don’t even know if there is still a single industry-wide collective agreement anywhere. They used to be the standard. Setting such a spiral in motion is much more difficult than in the 70s. In the USA, with their hyper-mobile labor market, you have a completely different system; it cannot be compared, as is currently becoming clear again. They are already near full employment and a hot economy. But here? Nothing!

The spreading of interest rates is the normal state, after all the market regulates this according to perceived risk. The abnormal condition is that the central bank sets the interest rates for individual countries.

In a monetary union, this is NOT the normal state. This only applies to different currencies. If you want that as the normal state, you must not create a monetary union.

If individual parts of a union have different economic strength and develop differently, then that must be solved politically.

The political solution was the common inflation target of 2%. With the result that basically only France adhered to it. One of the biggest deviators was Germany. Which is because people firmly BELIEVE that it is the central bank that “controls” inflation and that they themselves don’t have to do anything. That is simply a mistake, based on a false economic theory. If you do not want or cannot control inflation around that 2% with fiscal policy, you cannot keep a monetary union stable. Q. e. d.

The problem is less the end of purchase programs and more that the market was distorted beforehand.

This “distortion” was one of the declared goals of the monetary union: to become so large that carry trades, i.e., currency speculations by large investors, break against the central bank. Because these trades are by definition “the market,” but regularly lead to currencies being valued nonsensically. The same applies as above: if you don’t want this, you cannot have a monetary union. In summary, you offer arguments that are valid for a national currency and furthermore require certain premises, the most important of which is some kind of “equilibrium” of prices, demand, and interest rates. I, on the other hand, argue that we de facto do not have our own currency (different mechanism) and that this “equilibrium” is a crutch invented by economists to build their theoretical constructs. Neither is an equilibrium of anything required to describe the economy, nor has it ever been empirically found anywhere. It is a requirement of certain schools of economic thought, not a fact and never observed empirically. But something positive: Should the system fall apart because of the spreads, we will get our own currency back, which will appreciate overnight so much that our export model is broken. Then hardly anyone will be able to afford building anymore, but for those who still can, it will become really cheap again ;-) .

You assume that the only alternative is disintegration. But that is not the case. Before the Euro, Germany was a monetary union of 16 different federal states. The USA are a union of very different states. The crucial difference is the corresponding political union which the Eurozone lacks. Due to the presumed consequences that a disintegrating Eurozone would have, politics will, if in doubt, likely develop more towards the United States of Europe.

Before the euro, Germany was a currency union of 16 different federal states.

And with the integration of the new federal states, it was screwed up badly. With repercussions lasting until today. And nothing was learned for Europe, which makes me skeptical whether the political union you predicted will really happen. One time Le Pen in F or her counterpart in IT and the thing will turn in a different direction.

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1x Le Pen in F or her counterpart in IT and the thing turns in a different direction.

we have often just barely missed that, so far we've been lucky. But you are right, it could turn out differently soon. Let's pray (and I don't believe in God) that it doesn't happen.

And please don't feed the troll again ...