#Weekly #Review - Financial Markets & Economics: Commentaries by Fabian Wintersberger

   Small Businesses Are Those Left Behind The world has fought its battle against the corona-virus pandemic for 11 months now. Huge expansions of central banks balance sheets, zero/negative interest rate policies and government spending programs were implemented to dampen the economic damages that government imposed lockdowns and social distancing measures caused.   As a result of the low interest rates environment companies have loaded up on huge amounts of debt in 2020. Since 1995 the median debt to assets of US restaurants have fluctuated somewhere around 15 and 35 percent. According to a Crescat Capital Chart in July it has skyrocketed to around 70% this year: Additionally, restaurants suffer from an implosion of revenues because of government imposed lockdowns and restrictions on the one hand and on the other hand because of people cutting back on restaurant visits. Those additional loans were made possible because of government guarantees - instead of the bank who m...

  Wie Gelddrucken funktioniert Ein Rückblick & ein Ausblick -> English Version Am Mittwoch fand die letzte Sitzung des Federal Open Market Committee statt. Obwohl der Auftritt von Jerome Powell weniger taubenhaft ausfiel als erwartet sind von Seiten der US-Notenbank keine Zinserhöhungen vor 2023 zu erwarten. Auch ein Ende der Anleihekäufe ist nicht in Sicht, weil die Inflation laut Powell nachhaltig 2% erreichen muss. Im letzten Kommentar dieses Jahr beschäftigen wir uns mit der Geldpolitik der Notenbanken und ihre Folgen und wagen einen Blick in die Zukunft.   Seit die Federal Reserve im Dezember 2008 mit QE1 begonnen hat und damit denselben Weg wie die Bank of Japan eingeschlagen hat, genau so alt sind einerseits die Wahrnungen vor Inflation auf der einen Seite und andererseits die Sorgen, dass die Fed durch die Bilanzverlängerung die Fed früher oder später nicht mehr unabhängig von der US-Regierung agieren könnte. Kritiker der Kaufprogramme befürchteten, dass die Fe...

How Money Printing Works   A Review & an Outlook --> German Version This Wednesday, the last FOMC-meeting of this year, took place. Although the press conference with Fed-Chair Jerome Powell was less dovish than expected, he assured the public that the Fed will not raise interest rates before 2023. An end of the Feds asset purchases is not in sight because - according to Powell - inflation needs to be sustainable at 2 % for a while. The anticipated consequences are highly discussed in the financial world. While one camp argues that central banks' low-interest rates and asset purchases will finally result in an inflationary period, the other points out that a deflationary period is more likely. "There have been warnings about inflation since 2008, but it never happened. On the contrary, we saw a period of deflation despite all those central banks' actions". Here, I analyze the effects of different kinds of QE and argue why all this did not result in an inflation...