In the run-up to the awarding of the Federal cross of merit to Mario Draghi, the ancient tomb of the fights are again broken down between those who see in him the Saviour of the Eurozone and its critics, who blame him for the expropriation of German savers. It is undisputed that the policy of historically low capital market interest rates of the European Central Bank (ECB) in a Phase in which the two Megatrends of aging and digitalization contribute to falling interest rates. The ageing of the population leads to a decline in investment activity and in the Wake of the digitization of business dominate models that have small capital needs. Both developments will increase the saving activity and thus contribute to a reduction in capital market interest rates – not only in Europe but worldwide.

ECB can be held responsible

The short - and medium-term interest rate development, meanwhile, mainly due to the monetary policy measures of the ECB. And the ECB can therefore be made for such effects to be responsible, not only for the financial markets, but society as a Whole. About the author

Jochen Felsenheimer, managing Director and portfolio Manager at XAIA Investment. The Ph. D. people's author of several books and scientific articles on the topics of credit derivatives, credit markets and economic issues is the host.

The most urgent Problem of the excessive supply of Liquidity to the ECB related to redistribution of welfare is. Even if the feared expropriation of the savers is exaggerated by negative Deposit rates, in fact, and no one is forced to keep his money in Bank accounts, a redistribution of wealth. While the assets of the savers remain in the best case unchanged, is of particular benefit to those who own financial assets, and real estate.

The reason for this is not alone the governing attribute, but also the national interests within the EU, to prevent a consolidation of the European banking sector, consistently. A part of the European banks to set the liquidity injection of the ECB only partially into increased lending, while a significant portion flows to the capital markets and the inflation of asset values caused.

wealth is more uneven

Consequently, the assets of private households in Germany has increased in the last decade. But it is also distributed unequal, as already wealthy property owners benefit disproportionately from the low-interest-rate phase. The ECB policy has contributed to increasing inequality in the distribution of the assets. The social importance of these effects is all the more serious because these can be simply made by a return to a "normal" monetary policy is undone.

the latest proposals for The introduction of a wealth tax in Germany can be understood as a reaction to the monetary policy of the ECB. From an economic point of view, there is more efficient Redistribution policies as a tax on assets, however, are few, the attack in view of the current Situation.

As the most recent example is the introduction of a rent cap in Berlin, is a direct intervention in the distribution of wealth between property owners and tenants. The next step will be the introduction of the long propagated, European financial transaction tax and further measures are imminent, inevitably, you want to reduce the unequal distribution of wealth-related social problems. In any case, the following applies: A solution to the distribution problem, drastic requires measures that are not meeting on a broad consensus within the population.

the introduction of a financial transaction tax?

The introduction of a financial transaction tax currently stands on the Brink. Austria has not made it clear, to support the tax in its current Form. Thus, the European consensus is again a step further. For Federal Finance Minister Olaf Scholz of the SPD is in for a setback, mainly because the financial transaction is to support tax, the basic pension, another project of the social Democrats. With Stock Selection in Europe, you will be able to achieve excess Returns with the System. You put on the strongest trend signals from Germany and Europe. Long and Short. So make your investment a success, regardless of the DAX level. (Partner quote) Here is an exclusive free trial!

Also, companies see the impact

in addition to direct socially relevant effects are those that arise in the corporate sector should not be ignored. A year-long low-interest-rate policy also manifests itself in the lack of structural change, the company as a result of the Central Bank granted funding advantage to Dodge. And if the price of capital is held in the production process artificially low, the use of capital compared to labour from the perspective of the companies more attractive.

low-interest-rate policy can cost jobs

Both of these effects during recessionary tendencies a reduction in Employment and a paradox of the low interest rate show policy: in the Short term, it may be employment-enhancing in the long term can be exactly the opposite of the case.

A solution to these structural problems, drastic requires measures that are not meeting on a broad consensus within the population. Drastic government intervention in our economic system will be necessary, and the phase of low interest rates will, in all likelihood, as a prologue of profound systemic Changes.

probably The most radical proposal is currently in the left wing of the US Democrats very popular in the so-called "Modern Monetary theory". This suggests that the state should assume the Central role in monetary policy, he can draw money, and the money invested until full employment is reached.

Even if this solution aims proposal to the United States, to serve such ideas as a blueprint for a stronger role of the state in Europe. This is all the more threatening, since the cause of the European debt crisis, a high national debt. The proposal to solve a debt crisis by increasing the public debt, must at least be as bold denotes.

As commented on the FOCUS Online readers of this post:

"What's missing as yet: By the zero interest rate policy, the wrong behavior will be favored pattern. Savers get a beating, guilt-makers laugh one. It can't be."

"The ECB cancelled by a permanent money, the wages, the income and property of the citizens print to value-free bonds from reform to buy up unwilling bankrupt States, and to Finance their debt with zero interest rates and now the citizens have some 'assets' to pay again for it? No one has anything of it, if his property value rises, if he can exchange them only against the monopoly money the Euro the ECB. What are you supposed to loose because with this value, unremunerated Dirt do?"

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Date Of Update: 10 February 2020, 11:00