Maria Viemann

Corona crisis spurs crypto currencies

At the beginning of the Corona pandemic, crypto currencies looked like clear losers of the crisis. However, this has gradually changed since mid-March, and even the recent drop in Bitcoin’s share price back into the USD 10,000 range does not change this. The expansion of expansive monetary policy observed worldwide and the fiscal programs of historic proportions have probably made a significant contribution to the positive momentum. The mix of escalating government debt ratios and, at least in the long term, considerably increasing price pressure has apparently led investors to look for investment opportunities outside the euro, US dollar and other currencies. Numerous crypto-currency proponents also assume sustainable, corona-induced changes in people’s behavior, which would have led to a higher general acceptance of block-chain-based currencies. The background is an assumed structural break in the form of a digitalization push, which has been triggered by increasing web conferences, home office and…

Good mood on the US housing market despite Corona

The US housing market has so far come through the corona pandemic largely unscathed, despite exploding unemployment, many corona infections and already quite high real estate prices. But the mood on the housing market collapsed only briefly, only to reach a higher level immediately afterwards. House prices are currently stagnating and are at their all-time high during the pandemic. Three percent for a 30-year standard mortgage – never before have houses been financed so cheaply. The market environment is accordingly attractive for buyers with a secure job. The search for a suitable home is already more difficult. The supply of real estate is scarcer than ever before. The low interest rates will continue to support demand and stabilize the market in conjunction with the scarce supply of real estate. The danger of a noticeable price correction is also decreasing in view of the economic recovery that has begun. On the…

USA: Recovery on the labor market continues, but momentum is likely to decline further

The situation on the US labor market continued to improve in August as a result of the economic recovery: although slightly fewer jobs were created than in July, the overall increase in employment was quite respectable at around 1.4 million. As a result, the unemployment rate fell surprisingly sharply from just over 10 percent to 8.4 percent, possibly as a result of the now significantly reduced federal subsidies for unemployment assistance. According to the Statistics Office, however, there are still errors in classification, so that the unemployment rate is likely to be somewhat higher. Nevertheless, the latest labor market figures give a positive signal for the US economy, which is receiving a lot of attention, especially during the election campaign, and Donald Trump is certainly welcome. Once again, job growth was mainly in the service sector, where the employment situation continues to „normalize“. In the retail trade and the leisure…

When reality becomes too complicated

The corona pandemic has put the economy and society in many countries to a severe test. Not everyone is able to adapt to the changed reality. There are many losers among companies, even in sectors that have so far been favored by the zeitgeist, such as tourism and air travel. They have to fight for survival and are partly dependent on state aid. There are also groups in society that cannot cope with the new reality and are currently making themselves noisy. In some cases, the existence of the virus is simply negated. Simple solutions are sought to escape the complexity of the world. The heroes of these people are often politicians such as Donald Trump or Vladimir Putin, who give the impression that a simple world view and tough action can lead to the solution of problems. In this particular world, there is a fundamental mistrust of all institutions….

Trump or Biden – in the short term this is unlikely to make a difference to the economy

What would be the impact of Trump’s re-election or Biden’s election victory? Both would probably focus their efforts after the election on supporting the economy on its recovery path. Biden, in particular, has repeatedly advocated a stronger role for the state – he would increase government spending substantially. He wants to finance this with higher taxes for companies and wealthy citizens. Trump, on the other hand, is likely to remain true to his course: He wants to use tax cuts to give the economy a boost again. Even if the approach to fiscal policy differs between Trump and Biden in this respect, the election result would probably not have a major impact on the economy, at least not over the next two to three years. The measures that can ultimately be implemented will largely depend on the composition of Congress. Only with the backing of both chambers could the future…

Japan’s head of government Abe withdraws

Japan’s Prime Minister Shinzo Abe has announced his early resignation for health reasons. With Abe, a politician will go who will leave great marks and who has above all ensured more stability and predictability in Japanese politics. His „adventomics“, i.e. the mix of extremely loose monetary policy and expansive (debt-financed) fiscal policy, combined with numerous reform promises, has shaped his almost eight-year term of office. And it is likely to continue to set the basic direction of economic policy until the next parliamentary elections in a year’s time and probably beyond. Abenomics‘ assessment is mixed at best, because Japan’s economic growth could only accelerate noticeably in the first half of Abe’s term of office. Above all, sustainable structural reforms for the economy have been disappointingly neglected. But its policies have brought Japan out of permanent deflation. The last time there were negative rates of price change there was in the…

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