01.03.2012 07:20 Clock | Editorial
Dirk Müller: "We are in the final phase before the Reset"
Dirk Mueller talks about the European debt crisis, the future of the euro and the fact that the citizens in the existing system "quite simply always the stupid one" is.
Mr. Miller, is to blame for the euro, that many countries are now in such a predicament?
The main problem is the massive indebtedness of the entire system, worldwide. We have in Europe with the euro but also a home-made problem. The introduction of the euro has been without a solid foundation in the sense of a common fiscal and financial policies and to the effect was a mistake. The economic power of countries and their national currencies must be consistent with each other. The euro is for Germany a bit too weak for the periphery, however, much too heavy. If countries are to act in self-responsibility, they also need their own currency.
As you can see the future of the euro?
Currently holds the policy to be laid with a vengeance on euros. The single currency was not only an economic but a political agenda. Therefore, we tried to get this now still alive as long as possible. For too long, the last but not anymore, because it would need a substantial transfer union, would have to pay each year in the rich countries like Germany, transfer payments in the tens of billions. Really imagine this is certainly not intentional and not.
The other option would be a decades-long-lasting complete democratization of Europe through new elections, laws and treaties, in order to create a federal system - the "United States of Europe" However, this is an absolute utopia that will ever realizing Sun remains for me.. only the last option: A resolution of the euro in its present form and a complete or partial return to national currencies.
Does that mean we would then get back to our D-Mark?
Conceivably this is in any case. Another interesting idea would be a nuclear North or € with Member States on equal terms. This can a common economic policy easier to enforce and these newly created currency would also be one of the most stable of the world.
Would not that be fatal for Germany's export?
This argument is of course often. Germany was also in the days of very strong D-Mark exporter. We produce high-tech products, for their safety and quality of the buyers probably are willing to pay a few percent more. On the other hand, the population of the country would benefit also from an appreciation of their currencies. The purchasing power of their income would rise.
We remain in a nuclear € and the Southerners get their drachmas, pesetas and lire again - the debt of the country remains but also to get an exit from the euro zone is not it?
True, there are only three possibilities for the state to rid itself of its debts, and in all variants, as citizens than at the end of the losers. First, a clear cut shall, where you simply cancels debts, as can be seen now in Greece. In the same way but it will cut the power of those who hold Greek bonds. Secondly there is the classic type of debt financing through tax increases. Here, too, as all citizens is the first in the line of fire.
The last and probably most convenient option is the debt through inflation. But that is what you need just a single currency, which you can print any size and can thus devalue. Viewed positively, one can develop an economy in its own business model again - for example, would the tourism in the peripheral countries are interesting again. However, even here in the first instance of the expropriated depositors - especially older people here would be deprived of their pensions. The citizens in our system is quite simply always the loser.
You mean the system is to blame for our situation?
The basic problem is this: We create money as debt money, that is, money is created by a person receiving a loan. Thus, all financial assets is somewhere over a debt. Once someone pays interest on its debt, that money ends up on the asset side of another. This money has accumulated over time with fewer people.
And herein lies the problem: The vast majority of the population ever higher debt carries, while only a few are on the other side of the bill. The top ten percent of the population is shared by two thirds of all private assets of almost five billion euros. The rest has the belts tighten ever more closely, in all areas. For where the debts are in the system does not matter. Whether the citizens directly, the state through higher taxes or higher prices for their products by companies - the citizen always pays.
How long can it then still walk like that?
It will go on as long as until the burden that weighs upon the masses to large. In my opinion we are already in this final phase. How long it takes just yet I do not know, but there will come a great restart - a redistribution from top to bottom. History shows that every few decades, such a reset occurs.
How such a breach will look in practice?
No matter what happens, it will certainly affect all men once. Ultimately, however, the masses are relieved. This can happen for example on inflation: the claims of creditors are worth less in real terms, on the other hand, the debtor, ie the general population, real relieved. The discussion here, debt cuts are part of this redistribution. Investors will put a greater or lesser proportion of their assets, whereas the mass in turn benefits from the declining debt burden. In the U.S. there was a response to the Great Depression of the 1930s, the so-called New Deal, in the form of extreme taxation of assets also contributed to the redistribution. A strong increase above the top tax rates or property taxes are also conceivable.
If this reset is so inevitable, why is there even still discussed and debated? Is that what happens in Brussels now, not then it is irrelevant?
It is far more important than the politics, at least in part, has the reins in his hand when it comes to determining how the restart should be. You can define who is still encumbered. Here, however, is also passed way too much time and many mistakes were made. For too long has been held to the idea, simply to alleviate the stress the fact that one or more of the boat picks.
Would you look at the inevitability of a debt made earlier section, only the banks would have been affected. Meanwhile, both central banks, as well as states and thus affected the citizens themselves. What needs to happen now is a clear indication of direction for the future course of change.
What needs to change because fundamentally, so that we get the same problems again in the future?
We have a completely insane system in our monetary system. Private commercial banks have the ultimate control over the creation of money and money created from nothing, so to speak. Why should such a right is not fully transferable to another level? An idea that there is this long is that of a full monetary system. There is a kind of fourth state power, the "Monetative", which assumes the creation of money. You would provide in the form of an independent central bank and the state banks with money.
All securities that are in compensation for deposits from customers at banks in the books are replaced by newly created money from the central bank. The money in the reserve accounts would be retained, but should be independent of the banks are no longer made in the form of credit in circulation. The Monetative in the form of the central bank would then have absolute control over how much new money comes into circulation.
That would be but for full funding by states or by printing money?
That's right, the states would be financed directly by the central bank, in our case the ECB. Currently there is a way that the commercial banks to borrow money without limit at the ECB to lower interest rates or simply draw even money to be significantly more expensive to lend to states and fully to cram so the bags. That goes wrong, should the ECB to step in again.
Why take this interim step is not easy to get out? The central bank gets the exclusive right to create money and lend to states. The states would thus naturally blocked access to the free market - the Federal Reserve would then have the opportunity exactly as much money to provide, as is currently required to fund the growth. They may be monthly or quarterly, based on past growth rates or anpeilen a desired growth.
Are there examples of alternative monetary systems?
Yes, there is. The many regional currencies in Germany alone are a good example. The Chiemgauer is one of the best known. These regional funds operate without compound interest and even canceled, if they are not put into circulation. There are some ideas and models, however, are those who control the levers of power, usually not interested in change.
The monetary system completely upside down sounds very much like to have a dream. Are there any tangible ideas to improve the situation?
Think of the Glass-Steagall Act in the U.S. in the 1930s. Better known as a dual banking system, he made sure to separate their own speculation and the retail operations of banks to strictly separate. That this Act in the 1980s and 90s was again stückweiseabgeschafft was, in retrospect a mistake from the hubris out of the financial markets. With the new Volcker Regel this idea comes in part back. Even here one should stop the gaming of the banks with new money.
Another improvement I see in the tax preference for pay and risk capital against speculation and interest income. Why anyone would risk almost can generate a return - no matter how good or bad it's the economy - and have to pay even lower taxes than many of the workers on their payroll? This would be relatively easy to implement measures - so here's the policy once again asked to be finally rid themselves of the financial industry and, more should be predetermined based on the sustainability of its financial regulatory framework.
About me: Dirk Müller (born 1968) became known as a stockbroker to a wide audience through television: he was regularly seen in front of the DAX board at the Frankfurt stock exchange-rate with its corresponding expression for the equity market. Since the beginning of the financial crisis in the U.S. Mueller is impossible to imagine as a financial expert from the media: Mueller strongly criticizes the neglect of politics, to rating agencies and economic research institutes. Mueller sees the expiration date of the current economic system is achieved in the medium and counted with a reorientation of the European Monetary System.
Interview by Philip Hagspiel
Dirk Müller: "We are in the final phase before the Reset"
Dirk Mueller talks about the European debt crisis, the future of the euro and the fact that the citizens in the existing system "quite simply always the stupid one" is.
Mr. Miller, is to blame for the euro, that many countries are now in such a predicament?
The main problem is the massive indebtedness of the entire system, worldwide. We have in Europe with the euro but also a home-made problem. The introduction of the euro has been without a solid foundation in the sense of a common fiscal and financial policies and to the effect was a mistake. The economic power of countries and their national currencies must be consistent with each other. The euro is for Germany a bit too weak for the periphery, however, much too heavy. If countries are to act in self-responsibility, they also need their own currency.
As you can see the future of the euro?
Currently holds the policy to be laid with a vengeance on euros. The single currency was not only an economic but a political agenda. Therefore, we tried to get this now still alive as long as possible. For too long, the last but not anymore, because it would need a substantial transfer union, would have to pay each year in the rich countries like Germany, transfer payments in the tens of billions. Really imagine this is certainly not intentional and not.
The other option would be a decades-long-lasting complete democratization of Europe through new elections, laws and treaties, in order to create a federal system - the "United States of Europe" However, this is an absolute utopia that will ever realizing Sun remains for me.. only the last option: A resolution of the euro in its present form and a complete or partial return to national currencies.
Does that mean we would then get back to our D-Mark?
Conceivably this is in any case. Another interesting idea would be a nuclear North or € with Member States on equal terms. This can a common economic policy easier to enforce and these newly created currency would also be one of the most stable of the world.
Would not that be fatal for Germany's export?
This argument is of course often. Germany was also in the days of very strong D-Mark exporter. We produce high-tech products, for their safety and quality of the buyers probably are willing to pay a few percent more. On the other hand, the population of the country would benefit also from an appreciation of their currencies. The purchasing power of their income would rise.
We remain in a nuclear € and the Southerners get their drachmas, pesetas and lire again - the debt of the country remains but also to get an exit from the euro zone is not it?
True, there are only three possibilities for the state to rid itself of its debts, and in all variants, as citizens than at the end of the losers. First, a clear cut shall, where you simply cancels debts, as can be seen now in Greece. In the same way but it will cut the power of those who hold Greek bonds. Secondly there is the classic type of debt financing through tax increases. Here, too, as all citizens is the first in the line of fire.
The last and probably most convenient option is the debt through inflation. But that is what you need just a single currency, which you can print any size and can thus devalue. Viewed positively, one can develop an economy in its own business model again - for example, would the tourism in the peripheral countries are interesting again. However, even here in the first instance of the expropriated depositors - especially older people here would be deprived of their pensions. The citizens in our system is quite simply always the loser.
You mean the system is to blame for our situation?
The basic problem is this: We create money as debt money, that is, money is created by a person receiving a loan. Thus, all financial assets is somewhere over a debt. Once someone pays interest on its debt, that money ends up on the asset side of another. This money has accumulated over time with fewer people.
And herein lies the problem: The vast majority of the population ever higher debt carries, while only a few are on the other side of the bill. The top ten percent of the population is shared by two thirds of all private assets of almost five billion euros. The rest has the belts tighten ever more closely, in all areas. For where the debts are in the system does not matter. Whether the citizens directly, the state through higher taxes or higher prices for their products by companies - the citizen always pays.
How long can it then still walk like that?
It will go on as long as until the burden that weighs upon the masses to large. In my opinion we are already in this final phase. How long it takes just yet I do not know, but there will come a great restart - a redistribution from top to bottom. History shows that every few decades, such a reset occurs.
How such a breach will look in practice?
No matter what happens, it will certainly affect all men once. Ultimately, however, the masses are relieved. This can happen for example on inflation: the claims of creditors are worth less in real terms, on the other hand, the debtor, ie the general population, real relieved. The discussion here, debt cuts are part of this redistribution. Investors will put a greater or lesser proportion of their assets, whereas the mass in turn benefits from the declining debt burden. In the U.S. there was a response to the Great Depression of the 1930s, the so-called New Deal, in the form of extreme taxation of assets also contributed to the redistribution. A strong increase above the top tax rates or property taxes are also conceivable.
If this reset is so inevitable, why is there even still discussed and debated? Is that what happens in Brussels now, not then it is irrelevant?
It is far more important than the politics, at least in part, has the reins in his hand when it comes to determining how the restart should be. You can define who is still encumbered. Here, however, is also passed way too much time and many mistakes were made. For too long has been held to the idea, simply to alleviate the stress the fact that one or more of the boat picks.
Would you look at the inevitability of a debt made earlier section, only the banks would have been affected. Meanwhile, both central banks, as well as states and thus affected the citizens themselves. What needs to happen now is a clear indication of direction for the future course of change.
What needs to change because fundamentally, so that we get the same problems again in the future?
We have a completely insane system in our monetary system. Private commercial banks have the ultimate control over the creation of money and money created from nothing, so to speak. Why should such a right is not fully transferable to another level? An idea that there is this long is that of a full monetary system. There is a kind of fourth state power, the "Monetative", which assumes the creation of money. You would provide in the form of an independent central bank and the state banks with money.
All securities that are in compensation for deposits from customers at banks in the books are replaced by newly created money from the central bank. The money in the reserve accounts would be retained, but should be independent of the banks are no longer made in the form of credit in circulation. The Monetative in the form of the central bank would then have absolute control over how much new money comes into circulation.
That would be but for full funding by states or by printing money?
That's right, the states would be financed directly by the central bank, in our case the ECB. Currently there is a way that the commercial banks to borrow money without limit at the ECB to lower interest rates or simply draw even money to be significantly more expensive to lend to states and fully to cram so the bags. That goes wrong, should the ECB to step in again.
Why take this interim step is not easy to get out? The central bank gets the exclusive right to create money and lend to states. The states would thus naturally blocked access to the free market - the Federal Reserve would then have the opportunity exactly as much money to provide, as is currently required to fund the growth. They may be monthly or quarterly, based on past growth rates or anpeilen a desired growth.
Are there examples of alternative monetary systems?
Yes, there is. The many regional currencies in Germany alone are a good example. The Chiemgauer is one of the best known. These regional funds operate without compound interest and even canceled, if they are not put into circulation. There are some ideas and models, however, are those who control the levers of power, usually not interested in change.
The monetary system completely upside down sounds very much like to have a dream. Are there any tangible ideas to improve the situation?
Think of the Glass-Steagall Act in the U.S. in the 1930s. Better known as a dual banking system, he made sure to separate their own speculation and the retail operations of banks to strictly separate. That this Act in the 1980s and 90s was again stückweiseabgeschafft was, in retrospect a mistake from the hubris out of the financial markets. With the new Volcker Regel this idea comes in part back. Even here one should stop the gaming of the banks with new money.
Another improvement I see in the tax preference for pay and risk capital against speculation and interest income. Why anyone would risk almost can generate a return - no matter how good or bad it's the economy - and have to pay even lower taxes than many of the workers on their payroll? This would be relatively easy to implement measures - so here's the policy once again asked to be finally rid themselves of the financial industry and, more should be predetermined based on the sustainability of its financial regulatory framework.
About me: Dirk Müller (born 1968) became known as a stockbroker to a wide audience through television: he was regularly seen in front of the DAX board at the Frankfurt stock exchange-rate with its corresponding expression for the equity market. Since the beginning of the financial crisis in the U.S. Mueller is impossible to imagine as a financial expert from the media: Mueller strongly criticizes the neglect of politics, to rating agencies and economic research institutes. Mueller sees the expiration date of the current economic system is achieved in the medium and counted with a reorientation of the European Monetary System.
Interview by Philip Hagspiel
