Politics

Oberhauswahlen in Japan: Abe verpasst die Zweidrittelmehrheit

Japan’s Prime Minister Shinzo Abe and his liberal-democratic LDP have missed their goal of achieving a two-thirds majority in the elections to the House of Lords, the second chamber of the Japanese parliament, together with their coalition partner Komeito. The government now has 141 of the 245 seats, including the seats not standing for re-election this time. Even with the votes of the conservative „Renewal Party“, which now has 16 seats, the two-thirds majority of 164 would be missed. With this, Abe must say goodbye to his long-cherished plan to bring about a change to the pacifist constitution. According to the statutes of his party, Abe has to resign from the LDP presidency in two years‘ time and thus also from the office of head of government. Perhaps the result of the recent elections to the House of Lords is also the chance that foreign policy issues and the discussion…

Currency war – expression of monetary hopelessness

The obstacles to a political influence on monetary policy have apparently not only fallen in countries with a correspondingly bad reputation. The step to the next border crossing is obvious: the activation of monetary policy; no longer only subliminal by the political attempt to convince monetary policy of the necessity of an even stronger expansion, but by a targeted devaluation policy of the domestic currency. It is not for nothing that not only the speculations about interest rate cuts have been overturning in recent months. The tiresome debate about a global currency war is also picking up speed again. Although the discussion may sound familiar, it currently has a new component. The financial markets now recognise the limits of traditional monetary policy and the (perceived) hopelessness of the central banks to such an extent that they even allow room for speculation about currency market interventions. And this not only with…

Greece has voted

Voters in Greece voted clearly in favour of a change of government on Sunday. After four years under Prime Minister Tsipras of the left-wing populist party Syriza, the conservatives of Kyriakos Mitsotakis emerged as clear winners. With counting almost complete, Mitsotakis’ Nea Dimokratia (ND) has gained 39.85% with 31.53% for Syriza. Including the bonus of 50 seats for the strongest party, ND can be assured of an absolute majority in the Greek parliament with 158 of a total 300 seats. Syriza will have 86. Four other parties will also have seats, they are: KINAL (22 seats, social-democratic), the Communist Party (15 seats), Ellinki (10 seats, right-wing conservative) as well as the party founded by the former finance minister Yannis Varoufakis, MeRA25 (9 seats, left-alternative). The right-wing extremist party „Golden Dawn“ failed at the 3% hurdle and will therefore not be represented in the Greek parliament. The party had previously held…

Profiteers of the trade dispute

At the G20 summit, a further escalation in the US-Chinese trade dispute has been averted for the time being. However, the truce now agreed between Beijing and Washington stipulates that the special tariffs, which have been in place since the summer of last year and have just been significantly raised, will continue to apply for the time being. This means that the burdens particularly on the Chinese export trade will remain relatively high. The Asian neighbours are also affected by the bilateral trade barriers between the US and China as they are strongly integrated into the production chains of the Chinese export industry. Taiwan, Korea and Malaysia are particularly affected, and Vietnam, Thailand and Japan to a slightly lesser extent. Since the introduction of US tariffs, their exports of intermediate goods to China have plummeted as strongly as China’s exports to the US. Nevertheless, China’s neighbours are also able to…

The world after the G20

At the recent G20 summit, US President Trump and his colleagues once again spared us a catastrophe through their heroic conduct. Or such at least has been the press narrative built up very skilfully and effectively (particularly by the US) for the last few weeks. The problems that needed to be solved were actually created by the heads of government themselves beforehand – yet the G20 summit is viewed as a success. One undoubtedly positive aspect is that there was no major spat at the G20 meeting, while the countries involved also managed to come up with a final declaration – a little humility at least. The commitment to environmental targets is also a positive and necessary thing, but unfortunately the US was ultimately not willing to play ball here. The agreement between the US and China to resume negotiations on economic cooperation, and the announcements by President Trump that…

Old, New and G20

If the price falls, demand rises, and this also applies to credit. As interest rates fall, debt rises across the globe. The regional distribution differs though. In emerging markets, there has been an increase in corporate debt in particular, while governments have been cautious. The situation in the industrialised countries is the opposite. Here, governments have taken advantage of low interest rates to increase debt, while companies are more reticent. In Germany in particular, companies have taken advantage of the good economic environment and improved their financial ratios. This is likely to have a positive impact in the future, as economic growth slackens. There are also new developments. A private consortium around Facebook announced in recent days that it will introduce a new crypto currency by the name of Libra. Central banks, regulators and politicians are reacting nervously to this news, and not without good reason. With over 2 billion…

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