Due to Corona, the next bad news rolls on savers

the The current development around the Corona Virus in the News Ticker How heavily loaded the Coronavirus is from the economy? Economic researchers and ana

Due to Corona, the next bad news rolls on savers
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  • The current development around the Corona Virus in the News Ticker

How heavily loaded the Coronavirus is from the economy? Economic researchers and analysts sit up straight on your models, estimate and count to find the answer to this question. Much will depend on the further spread of the Virus, whether the consumer less to buy and about how much interruptions to Supply are a burden on the production. Also have an important role to play, whether it's a corporate move investments because of the uncertain situation.

it is certain, however, that the first quarter will be bad. "According to Apple and Microsoft investors prepare for a Tsunami of profit warnings," says Jochen Stanzl from the broker CMC Markets. The OECD cut its Outlook for the global economy from 2.9 to 2.4 per cent. For Germany, the organization is only a Plus when the gross domestic product of 0.3 percent, or 0.1 percentage points less than in November. In Italy, the impact of the new health care crisis, will stagnate the economy of the new prediction that, however. If the outbreak of the novel Coronavirus takes longer and the Asia-Pacific region, Europe and North America wide to be covered, are still to be feared more pronounced effects, fears of the OECD. In this case, the global growth to 2020, could even drop to 1.5 percent. DAX 12.059,63 PTS. +74,24 (+0,62%) Xetra

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To the rate of data

ECB to act

This is not good news for the President of the European Central Bank (ECB), Christine Lagarde. She needs a strong economic growth, the Inflation picks up and interest rates rise again. In February, the value for the Euro area was just 1.2 percent. "The ECB's hoped-for powerful reinforcement of the underlying inflation is still not in sight," said the Commerzbank, the Numbers. "Inflation is too low for the ECB." So far, the Central Bank expects a growth of 1.1 percent for 2020. The analysts of UBS estimate that this will be too high. They expect that the ECB will lower its Outlook to a growth of 0.9 percent.

Lagarde has already announced that the ECB, the development will not watch idly: "If it is necessary, we are ready to take appropriate and targeted action," she said. - Circuit with minus interest rates!

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criminal interest rate is likely to continue to

increase the resources of The ECB are, however, limited. Unlike the US Central Bank, the Fed cannot lower interest rates so simple more. The policy rate is already at zero percent. The observers, therefore, expect that the ECB will lower the interest rate Penalty of minus 0.5 to minus 0.6 percent. May be this step is not yet in the March session of the governing Council, on 12. March. At the next meeting at the end of April, the probability of this is, but from the point of view of the observer is relatively large. But the pressure for the ECB is due to the surprising rate cut by the US Central Bank at 2. March increased.

however, The question is, what brings a further reduction of the deposits interest rate. Finally, this Time is not the Problem that there is too little demand and you would have to encourage companies and consumers with cheap money. Instead, supply chains are interrupted, and the people because of the spread of insecure. "Unlike in the global financial crisis, the Central banks will be able to help in the fight against the economic damage caused by the Coronavirus just a little," says Marcel Fratzscher, President of the German Institute for economic research (DIW). "Because the biggest economic Problem is a Collapse of the global value chains and the lack of confidence of consumers."

ECB takes stock of its monetary policy

Also, the current balance sheet of the ECB about the effects of their loose monetary policy, leaves room for doubt. The new Director compared Isabel Schnabel recently, the actual development in terms of growth, Inflation and employment with a hypothetical history without purchases of bonds and penalty interest.

According to these calculations, the ECB, the flood of money provided, the Bank pumped over bond purchases so far of 2.6 trillion euros into the markets – for example, in 2019, for an employment increase of two million in the Euro area. Many people could help so, however, the Plus corresponds to a small increase of 1.3 percent. Growth and Inflation would have been last year without the Intervention by about 0.3 percentage points lower.

employment governing The change in employment with (yellow) and without special measures

Inflation governing The change in the Inflation (yellow) and without special measures

growth governing The change in economic growth (yellow) and without special measures

"Apart from the theoretical Doubt as to such calculations, it is striking that the ECB reported effects of loose monetary policy on Inflation and economic activity are low," a rating of Jörg Krämer, chief economist of Commerzbank, the balance sheet. "In my opinion, you can hardly justify the massive negative side-effects of loose monetary policy." So the constructive state funding have put to sleep with touch press, the willingness to reform in countries such as Italy. In addition to the duration of a dangerous bubble in the real estate markets are not threatened only in Germany, "the Bursting of entire economies cause serious harm". Finally, many companies were held mainly in the South of the monetary Union with low interest rates artificially alive. "These Zombie companies are abandoning healthy company's resources and weaken the growth of productivity."

savers need to know rethink

the ECB to the increasing dangers of their loose monetary policy. Nevertheless, it is likely to go to demonstrate in this Situation the ability to act. "A Central Bank should leave no doubt that you will act is determined and the effect of capable of something. Otherwise, only the uncertainty in the System multiplied“, said the head of the Belgian Central Bank, Pierre desire.

For savers, this means that a rate of return above the Inflation foreseeable future is even less likely. The loss of value of Savings, will continue. Despite the currently uncertain situation on the stock exchanges, the shares are, therefore, the only way to achieve returns above the inflation rate.

read also: "We need urgent help" - Coronavirus in the district of Heinsberg: "the Situation is taking a dangerous dimension to"

Where Coronavirus occurs? Real-time map showing the spread of the disease, FOCUS Online/Wochit Where is Coronavirus? Real-time map showing the spread of the disease

Date Of Update: 04 March 2020, 10:00

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