Good morning dear readers,
this wake-up call begins with a few tectonic shifts in the global economy. It doesn’t happen every morning either. One concerns the subject of inflation, which the Guild of Economists reliably divides into two camps. One believes that the price spook will end soon, the other sees dark forces of a misguided globalization at work that keeps inflation at a high level.
World Bank President David Malpass takes this position in an interview with my colleagues: Central banks should act more decisively against inflation to help small firms and developing countries. His reasoning: “The rise in inflation hits the poor hardest. They are less able to protect themselves against price increases. ”
The alarmed World Banker’s appeal could soon be followed by action:
Top jobs of the day
Find the best jobs now and
be notified by email.
- The US reports a price increase of almost seven percent. Wages are also increasing. Tomorrow, Jerome Powell, head of the Fed, is likely to announce a faster tightening of monetary policy – bond purchases will be throttled. Interest rate hikes soon are possible.
- In the euro area, inflation is just under five percent. However, there is no major wage pressure. On Thursday, Christine Lagarde, head of the European Central Bank (ECB), will probably first announce the end of PEPP from March 2022 – the bond purchase program that was started especially because of Corona.
So we are experiencing a two-speed economic policy. Because the US under Donald Trump and Joe Biden implemented the larger spending programs and even donated cash for everyone, the spikes there are much larger – and with them the corrections. But this is how the famous interest rate differential between the United States and Europe is increasing. Christian Morgenstern agrees with the announcements in Washington and Frankfurt: “Words are like lifebuoys that serve life; it is difficult for you to get to the bottom of things with them. ”
The other story with a long-distance effect – or shall we say Scholz-like: with “oomph” – concerns the German auto industry and its flourishing business with China. The topicality provides clear indications that we are in parallel worlds. In one, politicians from Hong Kong, Uyghurs, Taiwan, censorship and human rights talk, in the other, Chinese and German companies create facts.
And they do not point to the “decoupling” that America demands, the separation of businesses, but on the contrary to “happy coupling”, to productive connection. A high-ranking German manager whispered to me the other day that the People’s Republic was very predictable against the erratic USA, where the return of the pocket godfather Donald Trump is pending.
Of course, the selected participation levels are no coincidence: at ten percent and more, the financial supervisory authority would have to examine Bafin intensively, as it does with banks – Daimler maintains a financial institution with Mercedes-Bank that has a full banking license. Incidentally, like BMW, Daimler also wants to take over the majority in Beijing Benz Automotive (BBAC), BAIC’s partner company.
Conclusion: BMW, Daimler and the VW Group are dependent on business in China, comments my colleague Markus Fasse, “the higher the dependency of industry, the less leeway for German politics.”
A hardline policy against immigrants is well received by the right, but not necessarily by judges. This is the experience of Denmark’s former immigration minister, Inger Støjberg: She has been sentenced to 60 days in prison for abuse of office, carried out with electronic surveillance. A special court ruled that Støjberg had disregarded her ministerial duties when she illegally ordered the separation of underage couples seeking asylum.
In 2016, at her instruction, 23 couples, mostly with only a small age difference, were separated without an individual assessment because the women were each under 18. They were housed in different centers – which is why Støjberg is said to have violated the European Convention on Human Rights. The ex-minister sees a “defeat for Danish values, not just for me”. She can no longer appeal the judgment.
And then there’s a simple draw for the Champions League round of 16, which causes chaos and must be repeated in all seriousness. The names of football clubs had repeatedly ended up in the wrong pots in the process – all a software problem, as the Uefa association communicates. In fact, human error in general is now often explained in terms of technology, this damned technology. In any case, FC Bayern Munich was grateful for the lottery posse:
Initially, they were assigned to the strong club Atlético Madrid, then the slightly more harmless Red Bull players from Salzburg became. With so much play, sport and excitement, we close with Wilhelm Busch: “There is always a surprise / where you didn’t expect it.”
I wish you a surprisingly positive day.
I warmly greet you
Her
Hans-Jürgen Jakobs
Senior editor
You can subscribe to the Morning Briefing here:
