Views From the Streets of the Former East Germany, Poland, and Other Interesting Places

By: Ian Campbell | Thu, Aug 23, 2012
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Why read: To learn economic 'views from the street' recently expressed in Copenhagen (and elsewhere in Denmark), Gdansk (Poland), Gotland and Stockholm (Sweden), Helsinki (Finland), Riga (Latvia), St. Petersburg (Russia), Tallinn (Estonia), and Warnemunde (former East Germany).

Commentary: Last evening my wife and I returned to Toronto from a two week, twelve city/town trip to Europe/Russia's Baltic Sea area. Among other highlights, we were the first North Americans to play golf at a golf course near Warnemunde, Germany - first opened for play in 2003.

If you are a regular reader of this Newsletter you will know I believe in learning from people with 'feet on the street', and from business operators who understand the detailed risk/reward metrics of the industries they work (or worked) in.

I found our Baltic trip, and the conversations I had with the tour guides, restaurant waitresses, taxi drivers, and other 'main streeters' we met hugely interesting and informative. Certainly the older and younger people I met represented a broad cross-section of age groups, educational backgrounds, and 'life experiences'. A number of the older people I spoke with had lived as children and young adults under communism, and as mature adults in a form of 'free enterprise regime' after either, depending on country, 1989 or 1991.

Three of the countries my wife and I visited (Estonia, Finland and Germany) are part of the 17 country Eurozone. All the countries visited except Russia are part of the 27 country European Union.

Here is a summary of things that I learned and think important:

You might say that is to be expected, given they live in or close to those geographies. Then again, I am concerned (and strongly believe everyone should be concerned) about the contagion issues that may arise in the United States (in particular) in the event of a continued escalation of the Eurozone's financial crisis, and the current United Kingdom double-dip recession.

Accordingly, if you read this Newsletter you know I believe those in the U.S. and Canada who care about their economic futures ought to know a lot more than most seem to about economic events developing outside North America;

there was no real consensus among the many people I spoke with as to whether the Eurozone would survive in its present form, or whether in the end the euro would survive in a different structure than it currently does.

That said, the majority of the people I spoke with thought that on balance Germany would support the euro and the euro will survive for at least the time being. Three of the people I spoke with, each of who I consider to be among the best informed and thoughtful of my 'people on the street' were pessimistic with respect to the long-term survival of the euro;

In summary, I am very glad my wife and I took the trip we did. I had visited Denmark previously, West Germany many times, and East Germany just after the Berlin Wall came down in 1989. I had not visited the other countries previously. That said, I:

The other thing I confirmed - again based on a non-statistically valid sample - is what I consider to be the broadly uninformed and U.S. centric attitude of at least some Americans.

When I asked an American I met on the trip - who was not retired, and who worked in the U.S. public service - what his thoughts were with respect to the ongoing financial crisis in the Eurozone his immediate and curt reply was:

"I don't know anything about it and could care less. I only care about what happens in America in my area of expertise".

Certainly many Americans I know are thoughtful, caring and well informed people. That said, I believe the attitude I experienced is all too often an American 'first responder' answer to a lot of things. Simply put, I think the sort of answer I got from one American on our trip has a very high probability going forward of biting him in the precise spot I suspect he doesn't want to be bitten.

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
* Canadian Institute of Chartered Business Valuators
** through The Ian R. Campbell Research Initiative

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