The double force of the government against Putin

With so much rhetorical detonation on a Thursday, the audience forgets that for many weeks, until the end, a completely insane gas levy was being prepared in Berlin with full force, which would have been at the expense of citizens and companies (i.e. the “consumers”) on October 1st should become reality.

Now they are not burdened, but relieved – the “Wumms” fund finances gas price and electricity price brakes as well as direct aid. Reason prevails when a basic quantity of gas is capped, but beyond that market prices act that deal with supply and demand, but not with elections and agony. Not only is the fighting rhetoric of the first Corona summer being reactivated, but also the “Economic Stabilization Fund” (WSF) created at the time.

That’s wonderful, because like magic, the debt brake can also be adhered to in the Putin war in 2023. All the impressive financial cream pots called “shadow budgets” that have built up alongside the official budget don’t count from a purely arithmetical point of view. And our brave opposition from the former government bank is still researching how the 200 billion came about, when Robert Habeck and Christian Lindner had just worked on each other like doped freestyle wrestlers.

But maybe it is also the case that ten percent inflation, which Germany is now reporting, has two extraordinarily nice effects for the cameralistics: on the one hand, government debt is inflated away, while on the other hand, fiscal revenues automatically increase, qua value added tax or income tax, where the mechanics of the progressively increasing tariff strikes.

Larry Fink, head of the world’s largest asset manager Blackrock, takes a completely different direction in the interview: “One of the questions I’ve asked every central banker is: What’s so magical about two percent inflation? Why not three percent? I don’t think two percent is a natural rate. It will be some time before we even get back to three percent.”

It is a chapter in the history of the money illusion. This becomes clear when you read Allianz boss Oliver Bäte’s interview with editor-in-chief Sebastian Matthes. “The enormous debt in Europe should worry us,” warns the man from the insurance industry: “The debt has never been higher, public and partly private. At some point the market will turn, and then the creditworthiness of entire countries will be in question.”

The 57-year-old manager also says about…

• depreciation: “We are looking at inflation wrong. Unlike in the USA, we are dealing with inflation driven by the price of energy. We cannot solve this with interest rate control alone.”
• underestimated crises: “The social security systems will collapse in a few years if we don’t take consistent countermeasures now. Any child can figure that out. In order to overcome the crisis, you need a reform program as extensive as the energy transition.”
• change: “Our country is much more powerful than many people think. I do think that German industry will experience an efficiency revolution because efficient machines and climate-friendly systems will be in greater demand than ever. But we also have to be honest enough that not every company will survive.”
• the expensive crash of their own fund “Structured Alpha”: “In essence, it is about the criminal actions of three fund managers who misrepresented risks while circumventing the control systems. Perhaps for too long I trusted that the people here would do everything right at first. On the other hand, I can’t get up in the morning and suspect a scammer behind every tree.”

Sometimes, however, you can no longer see the trees for the forest.

Speaking of performance: At yesterday’s jury meeting for the “Weconomy” start-up competition, it was possible to experience just how much innovative strength there is in young companies, who take over the active part in Schumpeter’s theory of “creative destruction”. Among the ten winners, which we chose from 20 candidates, are “Levy Health” or “JuniorJob” from Cologne, the company of 19-year-old Celina Goette and Bersa Shazimiani.

With emphasis, they fill the gap left by Stepstone & Co. and use their app and chat activities to address students who are looking for internships and jobs in companies. In turn, they have the chance to get closer to “Gen Z” and can make it clear that in a time of “over-academicization” specific vocational training has many advantages.

However, the optimism of the industry is weakened in view of the symptoms of the crisis: According to the “German Startup Monitor”, only 54 percent of young companies expect positive development – in 2021 it was 72 percent.

“Recruitment freeze” is a terribly brutal word for an internet company that was just a beneficiary of the corona pandemic. And yet just Meta, Mark Zuckerberg’s parent company, has just announced internally that it will freeze jobs – to reduce costs. The company will pause the search for job candidates and will not make any offers until the job freeze is lifted later in the year, says HR manager Lori Goler: “Our budget for 2023 will be very tight for all teams as we try to minimize costs “. Meta is hit by a slump in advertising – and by TikTok, the video offering of the Chinese group Bytedance.

My cultural tip for the weekend: “The Inflation Ghost” by Thomas Mayer. It is a history of money that is lovingly and academically prepared, which, to the author’s regret, is not a history of “sovereign money” and which ends with comments on the current problem of “stagflation”. The founding director of the research institute of the wealth manager Flossbach von Storch shows his skepticism about the possibilities of central banks, which of course also explains his soft spot for privatized money, where Mayer sees the future in cryptocurrencies like Bitcoin.

This educational book about the mechanics of a means of calculation, payment and a store of value is on the shortlist for our German Business Book Prize 2022. And now it’s your turn: Which do you think is the best business book of the year? Choose from the ten shortlisted titles who should win the readers’ prize. Here you go directly to the vote.

And then there is the Franconian city of Erlangen, also known as the “Corporate Town” as the world’s largest Siemens location, which creates a small sensation. In the current “Atlas of the Future” by the Prognos Institute, the district that was once revamped by the Huguenots suddenly appears at number one. Erlangen has a very strong university, many settlements in research-intensive sectors such as medical technology and, together with Nuremberg and Fürth, form “a metropolitan region that is not that much smaller than Munich,” says Managing Director Christian Böllhoff. In general, there is “a renaissance of intelligently positioned regions” such as the Lake Constance district or the “Ems-Vechta region of the future”.

As a Munich resident, you have to accept the fact that after many years, your own metropolis no longer plays the first fiddle at Prognos. The natives still consider the local opera house, the local football and basketball club, the catering trade, the universities and the deep-tech start-ups to be unreachable, after all, CEO Tim Cook recently traveled to the Oktoberfest and to his important development branch.

Thanks to Karl Valentin, we know here: “The stranger is only stranger in a foreign country.”

I wish you a pleasant weekend, even if you are not in a region of the future.

It greets you cordially

Her

Hans Jürgen Jakobs

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