News from Germany
Hangabout…… are you saying you can borrow money on your credit card, reinvest it with the same bank, and make a profit…?
Geez… that’s even better than debt cancelation! Not even I would have thought of THAT!
I like this new Matrix…
thank you for collecting and presenting news from germany here.
I think the probable gas shortages can turn out to be quite serious in the short term, and bring the "Peak-Gas" agenda to the headlines pretty soon. It may also be another example to show the dishonesty of our political elite, who actualy assures, we have nothing to fear about.
Michael Höhne wrote:
Barclaycard: You can borrow 25,000 Euro for 12 months with a monthly payment of 2,127.61. The total interest is 531.32.
Are you sure this is correct? Did you check with them?
AKAIK Barclaycard is a credit card, so it could it be a monthly interest rate.
Also, it looks very strange a bank would lend for such a low interest rate (2.13%) whereas it could lend to another bank at a higher rate! 1 year Euribor is at 3.185 % as of today.
Prices have changed, but here are today’s numbers:
25,000 Euros / 12 Months: 12 monthly payments of 2,146.50 = 25,758 Euros
25,000 Euros / 36 Months: 36 monthly payments of 736.30 = 26,506.80 Euros
Or Citibank, https://www.citibank.de
25,000 Euros / 12 Months: 12 monthly payments of 2,134,55 = 25,614,60 Euros
25,000 Euros / 36 Months: 36 monthly payments of 745,15 = 26,825.40 Euros
Currently, you can always create a new account somewhere and get 5% or even more for 12 months (e.g. GE Money Bank and DAB Bank offer 5.5% today). If I had 25,000 Euros to invest, then I could do it like this:
Year 1: go to bank A, deposit 25,000 and after 12 months get 1,375 (5,5%). I have to pay 25% taxes on 1,375, leaving 1031,25.
Year 2: go to bank B, deposit 26,031.25 and after 12 months get 1.431,72 (again 5,5%). I have to pay 25% taxes on 1.431,72, leaving 1,073.79.
Year 3: go to bank C, deposit 27,105,04 and after 12 months get 1,490,78 (again 5,5%). I have to pay 25% taxes on 1,490,78, leaving 1,118,08.
This is hypothetical, because I cannot predict how much interest you get in a year or two, but say the 5.5% were valid for 36 months, then I have 28,223.12 *after tax*. I can borrow the investment for 26,506.80, giving me a net profit of 1716,32 in three years without having done any productive work.
Maybe there are some hidden costs not mentioned on the web site, but anyway there’s clearly something wrong here. Fractional reserve banking allows this game to be played, but I wonder how long it can last. I don’t expect any changes in regulations though, because Germany has many elections this year, including the election for the Bundestag, so politicians have already started to compete and the financial meltdown turned into a discussion where parties are trying to profile themselves as the best party to solve the problem. They don’t have any clue and starting to do the same we know from the US. It won’t take long until we bailout our auto industry as well.
You can appreciate this video…Ron Paul on Germany and hyperinflation
There was a shift in news presented in the main stream media in Germany recently. While it has been said for a long time that Germany has to do the same bailouts as the U.S., there now is a more critical opinion. The FED announcement to buy treasuries worth a trillion seems to form a cornerstone. I saw two news shows today on different channels. In one of them a former CEO of HypoVereinsbank was interviewed and he said that the FED has to be very careful about its monetary policy, because it will be very difficult to remove the injected money when it’s time to do so. He was also asked if the U.S. will be able to pay back the massive debt. It first seemed that he wanted to say "No", but he then decided to use "It will be very difficult" and "History shows that it never worked" instead.The second was one of the most popular news show in Germany and they showed what happened in the markets after the FED announcement. The Euro gained about five cents from 1,31 to 1,36 and Gold raised from 895 to 945. Gold is rarely mentioned here. It was when heading for 1,000 dollars but suddenly disappeared from the news. You have to search for it when interested. Seeing it back in public media is worth mentioning.All in all, the opinion shown on TV goes into a direction where it modestly starts to criticize the U.S. Why that doesn’t surprise us, it’s an important change for the mainstream media. It will be interesting to see how it continues.
Scrapping Premium likely to be extended
The scrapping premium of 2,500 Euros to promote the sales of new cars will most likely be extended. The initial budget covered 600,000 applications worth 1,5 billion Euros. However, more than 350,000 were already requested in the first quarter of 2009.
The majority of purchases is for smaller cars with less gas consumption. More than 50% of these cars are from foreign (non-German) producers. Of course the companies having such small cars in their portfolio are urging government to extend the program, while companies selling bigger cars are against it. There are some voices saying that helping a single industry doesn’t help to solve the crisis. But all in all, the government is celebrating its great success.
I wonder what happens when they stop the program. At this time all people that haven’t bought a new car are either waiting for a new bailout package (oops, meant scrapping premium) or already decided that they don’t need a new car. And then sales figures will plummet once again.
BDI president says that the limit of indebtedness is reached
Hans-Peter Keitel, president of the federal association of the German industry (BDI) warned against further stimulus packages. "We are clearly in favor to say that the end uf such programs is now reached", Keitel said to the Deutschlandfunk on Sunday.
And this shouldn’t be changed by campaigns in this super election year. "We believe that the limit of indebtedness is reached", Keitel said, considering the several billions spent to cope with the financial crisis.
At least more people in influential positions are calling to stop these bailouts.
By the way, we have the election for the European Parliament in June and the election for the German Bundestag in September. Of course our politicians have already started the usual mud fight for the September election (Germany), but almost nothing is heard about Europe. This is quite usual here, because the Eurocrats are not too much interested in telling the people about how the European government works and what power is has. Almost 80% of new laws are decided in Brussels by unelected people and all member states have to adopt European law into national law. Though we elect a European parliament, this parliament cannot introduce bills. Only the European commission is allowed to, and these commissioners are not elected by the people.
The election campaigns will take ownership of public media soon and I already know what the guys will promise us. These campaigns will lead to people caring even less about the financial collapse than before, so I don’t expect Germans to be helpful this year. I’m trying to make a difference though.
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