Germany is the largest creditor in the world. €3.5 trillion in net foreign assets — more than Japan, more than China. That sounds like wealth. It is the opposite: it is the most precise description of how the Megamachine turns real values into book entries and book entries into political legitimation.
Gold in New York (Fed) · 1,236 tonnes (~€150 bn)
Gold in London (Bank of England) · 432 tonnes (~€52 bn)
Total net foreign assets · €3,500 bn
Of which lost returns since 2008 · €2,000–3,000 bn
I. Target2 — the biggest loan never decided
The Bundesbank holds claims of over one trillion euros against the Eurosystem. This figure stands in its balance sheet as an asset. In reality it is a permanent overdraft facility for the southern countries of the eurozone — created not by decision, not by treaty, but by the automatic mechanics of the euro system. Germany cannot refuse it, cannot limit it, cannot call it in.
Hans-Werner Sinn denounced this for years and was largely ignored. His warning was precise: these are unlimited and unsecured overdraft accounts. Isabel Schnabel, today a member of the ECB Executive Board, stated at a Bundestag hearing in 2019 that the value of these claims was "zero". Literally. Zero. But in the balance sheet they stand as assets. In political debate they count as proof of Germany's strength.
That is the Megamachine in its purest form: a system produces figures that impress and legitimise decisions — without anyone having decided that these figures should come into being, and without anyone taking responsibility for their possible worthlessness. Nobody is to blame. The system did it.
II. Gold in foreign vaults
Germany owns 3,350 tonnes of gold — the second-largest reserve in the world. 37 per cent of it is stored at the Federal Reserve in New York. 12 per cent at the Bank of England in London. Only 51 per cent in Frankfurt.
Germany has legal ownership of the gold. But it cannot simply go and fetch it. The Fed does not carry out complete physical inventories. Bundesbank staff may inspect particular bars on a sample basis — subject to conditions. When the Bundesbank announced in 2013 that it would bring half the gold to Frankfurt by 2020, 1,236 tonnes ended up remaining in New York.
Between 1963 and 1966 Charles de Gaulle had over 3,000 tonnes of French gold brought back from the USA to France. By ship and by plane. He did not trust Washington. That was the behaviour of a sovereign. Germany trusts. That is the behaviour of a system that can no longer — or will no longer — distinguish its own interests from those of its partners.
III. The worst asset manager in the world
For decades Germany has exported more than it imports. The current-account surpluses pile up into mountains of claims on other countries. Germany delivers real goods — cars, machines, chemical products — and receives promises of payment in return. That sounds like success. It is structural weakness.
A study by the Kiel Institute for the World Economy measured the scale of the disaster: anyone who had invested one euro internationally in 1975 on the American pattern would have owned 40 to 60 times as much in 2017. With German returns: seven times as much. American investors turned €100 into €6,000. German investors: €700. Among the G7 countries Germany comes last in returns on foreign assets. In the decade after 2008 alone Germany missed out on €2 to 3 trillion — had it merely invested averagely. Not brilliantly. Averagely.
In the international financial world there is a term for this: "Stupid German Money". The Landesbanken, the regional public banks, showed the way: in the 2000s they bought American subprime mortgages — the most toxic securities in history. When the bubble burst, they lost billions. The taxpayer rescued them. Printed paper became bank balance sheets — at the expense of the general public.
IV. The Megamachine dimension
Why is this so — and why does it stay so? The answer lies not in individual incompetence but in system logic.
Germany's export surpluses are the flip side of the austerity policy in the euro crisis. What stands as debt in Greek state budgets stands as claims in German balance sheets. Two sides of the same Megamachine. The system produces imbalances — and at the same time produces the narratives that legitimise these imbalances: Greek profligacy here, German thrift there. The structural cause — a monetary union without a fiscal union — remains invisible in both narratives.
The illusion of wealth is no oversight. It is a system function. The €3.5 trillion that stands in the books as assets allows the Megamachine to keep running without touching the structural causes. As long as the figure impresses, nobody has to ask whether the claims are recoverable, where the gold really lies, why the returns are so miserable. The music plays. People dance.
Germany is not rich. Germany has claims. Claims against countries that cannot pay. Claims against systems that do not work. Claims against partners who may not remain partners. The true wealth of a nation does not lie in balance sheets — it lies in infrastructure that works, in education that enables, in industry that produces. All of that is decaying. While the figures grow.
V. Whom the illusion serves
The illusion of wealth serves those who govern today: they can point to figures that impress. "Largest creditor in the world" sounds like success, like stability, like prosperity. Nobody asks whether the claims are recoverable.
It serves the buffered zone: as long as the export surplus counts as strength, the question of why there is no investment at home, why capital flees, why conditions here are not right, is not on the agenda. The export surplus is not a sign of strength — it is a sign that the Megamachine is sucking capital out of the domestic economy and channelling it into foreign vaults, where it earns poor returns and creates political dependencies.
And it serves the system as a whole: as long as Germany reckons itself rich, the structural question — why one of the richest economies in the world lets its infrastructure decay, does not refurbish its schools, neglects its digital infrastructure — remains without a satisfactory answer. The answer is hidden in the balance sheets: the money is there. It is just not here.
That is the last bullet of the Megamachine: not censorship, not violence — but the production of figures convincing enough that nobody looks behind them. Germany is the richest poor country in the world. And the music is still playing.