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I cannot help but think that the premise of this article is misguided. Loden is a type of cloth. It is not just used for making capes (although the Loden Cape is a well known type of garment, just like the Yorkshire flat cap), Loden is also used for making coats, trousers, jackets and dresses, probably many other things as well. I could present evidence that this is so by referring to sites such as the Germanwear shop on Ebay but these would be unsuitable to link to a Wikipedia article because that would be advertising.
The description of how Loden cloth is made is accurate but incomplete. The shrinking process consists of boiling the wool fabric for a long time, traditionally this was done over a log fire but more recently electricity or gas is used to heat the water, optionally various dyes are put into the water to give the fabric its final colour.
Perhaps the article should be split into two with a separate article about Loden cloth and Loden capes.