The first five years of the global crisis is over, investors flee from complex financial products in gold, silver and
commodities. Experts warn against a false sense of security. I was searching out for the bottom in my last post.
Everything seems perfect. The German stock index DAX has this week reopened the 7,000-point mark with flying colors , the record is missing just one of thousands. Unemployment is at its lowest level in 20 years. Of the two economic troubles, inflation or recession, this country is no trace.
But imagine might be savers and consumers a false sense of security. The world faces a lost decade. These days, of which half is behind us. In particular Germany, which has so far mastered the crisis relatively unscathed, should get to feel it in the next five years, the impact. Investors can take out the first half of the lost decade, important insights in order to prepare for the next five years.
Crisis is far from over “We should not give us the illusion that the crisis will soon be over,” as quoted by Patrick Artus of the French bank Natixis. Years of negative developments such as the growing debt, or the de-industrialization of specific sectors should now be reversed. “Such a process takes time.”
Arthur looks to get politically and economically unstable savers years. “Investors have to live with depressed markets and considerable fluctuations learn.” In his view, it must not remain in a lost decade. “The euro crisis may also last 20 years,”
Exactly five years ago, the crisis took its course. As a harbinger shocked the end of July 2007, the commercial bank IKB’s financial and political. The former banking superintendent Jochen Sanio warned that bank imbalances such as during the Great Depression. In August, the entire money market fund on which the banks to a standstill. The European Central Bank (ECB) with injections of money prevented a collapse.
After a brief economic recovery is now the global business community on the inclined plane. The economic performance of the euro zone shrank in the second quarter and might soon have to suffer the next recession. In such a Britain already infected, and the American economy is growing in homeopathic doses.
Business in emerging markets cools
To top it all cools down in the emerging economy . Investors commute almost as manic depression between hope and fear. Accordingly, they move one day full risk, another day, they shy away from any danger and flee from all risky assets.
In this jargon “Risk-On/Risk-Off” above transactions fall of shares on foreign currency bonds to all systems simultaneously on the move. A reasonable spread of risk in this environment is becoming increasingly difficult.
Since the outbreak of the crisis are other certainties have been overturned. Painful experience had investors that government bonds are subject to far western states of risk and the saved money is not safe with any financial institution. The word deposit insurance has now arrived in the everyday language of the Germans. Even at rates close to zero, so in some cases even negative returns to savers had to get used to.
Bank stocks are the big losers
The depressed level of interest rates is the most visible sign of the lost decade. But the performance of other asset classes, announces the leaden age. Since August 2007, the banks are among the biggest losers. The Euro Stoxx sector index has fallen by 78 per cent of banks , the shares of Commerzbank lost 95 percent. Banks are the backbone of any economy, with a broken financial system can not grow economy.
Generally, shares were in the past five years, the losers. Hardest hit the market in Athens, the stock index lost 87 percent Athex. But with Chinese equities recorded losses of investors. In contrast, takes the drop in the Dax of five percent from almost moderate. Germany is considered a stable investment position in the crisis.
Yen has risen 62 percent against the euro
Demand for the safe and above all highly liquid investments. The crisis also taught that the best investment is worth nothing if you can not doubt in a position to liquidate immediately, because there are not enough trading volume. Bunds combine safety and liquidity. The pension Rex barometer has risen since August 2007, more than a third. The surest sign of the lost decade revealed the foreign exchange market. There, the yen has gained against the euro almost 62 percent in value. Because Japan is the relative winners. The country has experience with leaden times.
Gold benefited from the status as a parallel currency
The yen has been exceeded only by gold and silver. The precious metal benefited from its new status as a parallel currency. If the central banks flood the markets with fresh money, investors flee to systems that are not in endless supply. Since the beginning of the crisis in 2007, the central banks balance sheets for the equivalent of ten billion dollars have expanded. This increase does not begin to receive an equal amount of increase of his goods and services.
The precious metals bull market also shows that investors now prefer clear products without much fuss. Complicated and incomprehensible structures for investors who lost in the crisis the most. In the product model of clarity fits, find that on the winning side just simple “qualified” investments. Serve with the advances of the U.S. dollar, which has consolidated its position as a reserve currency but also the raw corn, which benefited from shortages.
Forecasts are deceptively
Generally, investors had in the first half of the lost decade of painful experience that they can not rely too heavily on forecasts. Economists seem to need time to adjust to the new darker realities. And so Germany could also prove to be illusory optimism. “Germany’s strength comes from its export success. And should not continue like this,” Jennifer McKeown, economist quotes an independent research firm Capital Economics. “Germany will fall back into recession in 2013″, is the renowned economist safe.