Stagnation among German consumers.

To look at the charts of "Households' assessment of the economic situation" and "Propensity to purchase" in the Bundesbank's "Monthly Report" for May 2005 is to see a genuine consumer pessimism growing sharply stronger. The Bundesbank, of course, is Germany's central bank.

The two measures are plotted on graph showing the years 1999 through 2005. Already by 1999, both measures were sliding out of positive expectations into the negative side of the graph. The slope of the declining line is steep. For the next two years, the assessment and purchase indexes seemingly struggled to recover.

At the ends of the two five month moving average lines, the Bundesbank plots more variable monthly figures. And at the terminus the monthly lines head almost straight down as though a draughtsman had been startled in his work.

Germany's consumer spending is in the doldrums.

As if to underscore the pessimism, a June 20, 2005 Bloomberg News report carried the word that for the first time, German households paid back more money than they borrowed. Bloomberg said the Bundesbank termed the development "extraordinary".

Consumer spending in Germany has not grown for the past three years. And unemployment, nearly 12 percent, is close to a record high for the post-World War II era.

A separate Bloomberg report, on June 23, 2005 reported that the Ifo institute, one of Germany's most prominent economic think tanks, had reduced its forecast of 2005 GDP growth from 1.2 percent to 0.8 percent.

Is there a consensus on what's wrong? No there isn't. Some economists blame a lack of investment, others unemployment, still others high oil prices. Indeed, according to the Bundesbank's May 2005 "Monthly Report" fuel sales were down - even sales of home heating oil in the cold weather no less.

More than likely, Germany represents the general transitional state of the world, as globalization vastly increases the connections among national economies and new, ever more complex systems are required to deal with transactional volume.

UNEMPLOYMENT AND AN AGEING POPULATION ARE SERIOUS PROBLEMS

The population growth rate for Germany is above the regional average, due in part to a birth rate of 9 per thousand inhabitants, which is lower than the average of 11 per thousand for Western Europe. Job creation has not kept up with growth of the labor force in recent years, and it is unlikely that the situation will improve any further in 2005. Unemployment is running about 12 percent, and this continues to undercut consumer confidence.

Germany's population reached 83-million people mid-2004, which amounted to just under 45 percent of Western Europe's 185-million inhabitants. According to data released by the Population Reference Bureau (PRB), Germany's population will fall to 82-million 2025. Also, according to that source, Germany is going to have a population of 75-million people in 2050.

The PRB revealed that a substantial 88 percent of Germany's population lived in urban areas during 2004, and that the country's population density is a relatively high 599 people per square mile. Germany is the fourth largest country in area in Europe after Russia, by far the largest, the Ukraine and Sweden. It is number two in population size, again after Russia.

Another source of demographic data, the CIA's World Factbook, indicates that 14 percent of Germany's population was birth to 14 years old in 2004, while 67 percent was 15 to 64 years old, and 19 percent of the populace was 65 years of age and over.

CIA 2005 estimates showed the country's population growth rate at zero, and the net migration rate at 2.18 per thousand.

According to the United Nations Population Division, in the year 2050, 12 percent of Germany's population will be birth to 14 years old, while 48 percent will be aged 15 to 59, and 38 percent of the populace will be 60 years of age and over.