Schuldenkrise ohne Ende – Wirtschaftspolitik am Limit?

Schuldenkrise ohne Ende – Wirtschaftspolitik am Limit? Zurich, May 21 2015 Dr. Daniel Stelter Eine ungelöste Krise Ungelöste Krise 2 •  Schulden •  Ungleichgewichte Billiges Geld Ten-‐year government bond yield1, change 02/922 to 01/02 in percentage points -‐3.1 -‐3.6 -‐3.8 -‐5.7 -‐7.5 -‐9.9 -‐18.3 1.Central government bond yields on the secondary market, gross of tax, with a residual maturity of around 10 years; 2.Greece 09/92 due to lack of data Source: Thomson Reuters Datastream; bto analysis 3 Ein Boom im “Süden” Unit labor costs, Q1 2000 = 100 150 140 130 120 110 100 0 2000 Note: Debt data based on unconsolidated total liabilities (for corporates only loans) at market prices (exception: Belgium non-‐ﬁnancial sector debt is consolidated) Source: Eurostat; bto analysis 4 2012 Auf Schulden gebaut Change in debt and GDP between 2000 and 2008 (%) 240 220 221 200 180 160 149 140 146 120 100 80 71 60 71 73 40 89 68 57 35 34 Portugal France 31 20 0 Ireland Greece Spain Increase in debt Sources: ECB, Eurostat, bto analysis 5 56 Italy Increase in GDP 42 19 21 Netherlands Germany Rekord-‐Schulden bei Krisenbeginn Debt in GDP 2008 (%) 400
350
322 312 300
250
113
260 231 200
52
150
67
164
84
50
Ireland Households Sources: ECB, Eurostat, bto analysis Greece Spain 41
99
72
68
Portugal France 40
0
235 Non-‐ﬁnancial insItuIons 119
Government 90
70
58
67
Netherlands Germany 106
Italy 198 62
88
149
113
44
6 218 136
100
50
268 92
Keine “normale” Rezession Example: Spain Sector balance (% of GDP)1 20 Shift from 2006 in private sector: 16% of GDP 10 0 -‐10 -‐20 Shift from 2006 in public sector: 2002 2003 2004 RoW 1. Saving -‐ investment Note: For ﬁgures, four-‐quarter averages ending with 2Q/2011 are used Source: Eurostat 7 2005 2006 Government 2007 2008 Corporate business 2009 2010 Households Q3 2011 -‐11% of GDP Dauerbeatmung durch die EZB Auf der Intensivstation Ungelöste Krise 8 •  EZB •  Schulden •  Ungleichgewichte Whatever it takes 30
25
20
15
Mario Draghi President of the European Central Bank
10
5
0
2010 Souce: Wikipedia (picture); xxx; bto analysis 9 2011 2012 2013 2014 2015 Belgium Germany Greece France Netherlands Portugal Czech Republic Ireland Spain Italy Austria Sweden UK Und jetzt QE FED and ECB balance sheets (B$, B€) 4,400 Fed 4,000 3,600 3,200 2,800 EAPP ECB 2,400 TLTRO2 TLTRO1 2,000 1,600 1,200 800 2007 2008 2009 Souce: Pictet Wealth Management; Datastream; bto analysis 10 2010 2011 2012 2013 2014 2015 2016 Stabilisierung in Europa – „Boom“ in Deutschland Kurzfrist Stabilität Auf der Intensivstation Ungelöste Krise 11 •  Tiefe Zinsen •  Weicher Euro •  EZB •  Schulden •  Ungleichgewichte Kreditwachstum positiv Loans to households and non-‐ﬁnancial corporates 15.0 30 7.5 20 0.0 10 -‐7.5 0 -‐15.0 -‐10 -‐22.5 -‐20 -‐30.0 2010 Lending survey 2011 2012 2013 2014 -‐30 3M MA (M€) Loans transactions (M€) Note: Loans are net of redemptions Source: UCB; ECB; Haver; bto analysis 12 Belebt die Realwirtschaft Economic momentum set to accelerate Manufacturing PMI index Money supply change SA (%) 60 12 58 10 56 54 18 52 50 6 48 4 46 44 2 42 40 2001 2003 Manufacturing PMI Note: Includes a simulation until year end (shaded area) Source: UCB; ECB; Markit; Haver; bto analysis 13 2005 2007 2009 2011 2013 Money supply 2015 0 Selbst der Konsum wächst Euro area: retail sales (index) 118 113 108 Germany France 103 Euro zone 98 Italy 93 88 Spain 83 78 2005 2006 2007 Souce: Pictet Wealth Management; Datastream; bto analysis 14 2008 2009 2010 2011 2012 2013 2014 2015 Der schwache Euro hilft US$/€ and M1 growth diﬀerenIal 1.8 1.6 1.4 1.2 1.0 0.8 0.6 US$/€ 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Souce: Pictet Wealth Management; Datastream; bto analysis 15 M1 growth diﬀerential (US-‐EA) Europa überrascht positiv – die USA negativ Economic surprise index 80 60 40 20 0 -‐20 -‐40 -‐60 -‐80 -‐100 2012 2013 2014 EMU economic surprises index (Citigroup) US economic surprises index (Citigroup) EmMa economic surprises index (Citigroup) Source: Datastream; Bank J. Safra Sarasin; bto analysis 16 Weitaus extremere Massnahmen kommen Extreme Intervention Kurzfrist Stabilität Auf der Intensivstation Ungelöste Krise 17 •  Sozialisierung •  Monetrarisierung •  Tiefe Zinsen •  Weicher Euro •  EZB •  Schulden •  Ungleichgewichte Aufschwung? Zentralbanken senken Zinsen weltweit Canada: Unexpected rate cut (ﬁrst since 2009) on slowing inﬂation ECB: Finally announced the widely expected expansion to ist QE program Sweden: Cut rates to avoid SEK appreciation vs. Euro Denmark: Cut rates to defend the peg to the euro Russia: Rate cut to support growth, as lower oil prices exacerbate the impact of Western sanctions over Ukraine crisis Switzerland: SNB stunned markets by ending the franc's peg to the euro—but partly oﬀset the move with a rate cut Brazil: Rate hike in face of rising inﬂation and low growth Monetary policy tightening Source: Deutsche Bank; bto analysis 18 PBoC: Rate cut driven by low growth momentum, ﬁscal slide and low inﬂation EM: Surprise rate cuts across EM to tackle growth fears, falling inﬂation expectations, and appreciating currencies (vs. Euro) Monetary policy easing Australia: Rate cut to counter slowdown in growth momentum and AUD appreciation Schulden wachsen weiter! Increase in debt (all non-‐ﬁnancial sectors) relative to GDP 2008 – 2013 (%) 125
114
100
73
75
50
69
40
35
30
25
26
4
0
Ireland Greece Spain Portugal France Sources: ECB, Eurostat, Federal Reserve, U.S. Bureau of Economic Analysis (BEA), Bank of Japan, OECD, bto analysis 19 Italy Netherlands Germany Mehr Schulden als 2008! Current debt levels (% of GDP) 500
450 400
384 101
305 300
65
217
301 200
87
255 165
131
175
94
57
45
249 126
95
202 93
102
79
57
103
132
283 265 88
129
100
66
294 77
65
372 95
95
66
73
79
133
67
203
94
103
UK USA 0
Ireland Greece Households Spain Portugal France Non-‐ﬁnancial insItuIons Italy Government Note: Data as of 2013; Japan 2012 Sources: ECB, Eurostat, Federal Reserve, U.S. Bureau of Economic Analysis (BEA), Bank of Japan, OECD, bto analysis 20 Nether-‐ Germany lands Japan Unmöglich zu stoppen – Beispiel: Staaten Required consolidation (in % of GDP) Spain Japan Portugal France Italy UK Finland Netherlands Schweden Belgium USA Ireland Greece (before Syriza) Germany -‐2.3 2.6 -‐5.4 Primary balance in 2014 -‐1.3 3.7 0.1 -‐2.3 0.2 3.6 1.7 -‐2.7 -‐0.8 -‐0.3 -‐1.6 0.1 -‐1.0 -‐0.6 -‐1.6 0.1 0.8 -‐1.0 -‐0.8 -‐0.2 0.4 2.7 1.4 0.0 2.1 Necessary primary balance to stabilize debt Souce: McKinsey Country Debt database, IMF; HIS; EIU; Oxford Economics; OECD; McKinsey Global Growth Model; McKinsey Global Institute; bto-‐Analyse 21 4.9 4.1 3.6 2.5 1.9 1.9 1.3 1.1 1.0 0.7 0.2 -‐ -‐ -‐ 180 % Schulden tragbar Current debt level (% zu BIP) 500
450 400
384 101
305 300
65
217
180% 301 87
255 165
131
175
94
57
45
103
132
95
283 265 249 126
88
129
100
66
294 77
65
200
372 202 93
102
79
57
95
95
66
73
79
133
67
203
94
103
UK USA 0
Ireland Greece Households Spain Portugal France Non-‐ﬁnancial insItuIons Italy Government Note: Data as of 2013; Japan 2012 Sources: ECB, Eurostat, Federal Reserve, U.S. Bureau of Economic Analysis (BEA), Bank of Japan, OECD, bto analysis 22 Nether-‐ Germany lands Japan €3 –7 Billionen zu viel Schulden Debt overhang 2013 (B€) – debt > 18o% of GDP 11,647 12,000 11,000 10,000 9,000 8,000 7,949 7,796 7,000 6,000 5,000 4,000 3,000 2,000 1,233 1,000 443
0 Euro zone 227
Ireland Greece Note: Data as of 2013; Japan 2012 Sources: Eurostat, Federal Reserve, Bank of Japan, bto analysis 23 1,545 1,329 339
Spain Portugal France Italy 1,952 687
606
Nether-‐ Germany lands UK USA Japan Finanzmärkte betäubt Risiko gross! Extreme Intervention Kurzfrist Stabilität Auf der Intensivstation Ungelöste Krise 24 •  Volatilität unterdrückt •  Vertrauen in Notenbanken? •  Sozialisierung •  Monetarisierung •  Tiefe Zinsen •  Weicher Euro •  EZB •  Schulden •  Ungleichgewichte Alles bleibt möglich! "Inﬂation" •  ZB Politik gelingt Inﬂation in der Realwirtschaft zu erzeugen. •  Getrieben durch Vertrauensverlust in Geld. •  Realwerte mit Cash-‐Flow Kraft werden ourperformen. •  Schulden nicht gut, wegen Zinsrisiko. "Deﬂation" •  Deﬂation führt zu einer Pleitewelle. Schlecht für Credit. •  Realwerte sichern mittel-‐/
langfristig Vermögen. •  Notwendigkeit des internationalen Risikoausgleichs. •  Schulden real sehr teuer Vermögenssicherung in allen Szenarien, inkl. Bail-‐Ins 25 Ungelöste Krise – erhebliche Risiken Vermögen gefährdet Risiko gross! Extreme Intervention Kurzfrist Stabilität Auf der Intensivstation Ungelöste Krise 26 •  Krise ungelöst •  Schulden = Vermögen müssen schrumpfen •  Volatilität unterdrückt •  Vertrauen in Notenbanken? •  Sozialisierung •  Monetarisierung •  Tiefe Zinsen •  Weicher Euro •  EZB •  Schulden •  Ungleichgewichte How to deal with too much debt? Austerity 27 How to deal with too much debt? Austerity Growing out of the problem 28 How to deal with too much debt? Austerity Growing out of the problem Back to Mesopotamia 29 Rockstar Economist 30 IWF: Vermögensabgabe als Lösung? The sharp deterioration of the public ﬁnances in many countries has revived interest in a "capital levy"—a one-‐oﬀ tax on private wealth—as an exceptional measure to restore debt sustainability1. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and—until he changed his mind—Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inﬂating it away (these, in turn, are a particular form of wealth tax—
on bondholders—that also falls on non-‐residents). There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital ﬂight—in turn spurring inﬂation. The tax rates needed to bring down public debt to pre-‐crisis levels, moreover, are sizable: reducing debt ratios to end-‐2007 levels would require (for a sample of 15 Euro zone countries) a tax rate of about 10% on households with positive net wealth2. IMF: “Only a theoretical option” 1. As for instance in Bach (2012); 2. IMF staﬀ calculation using the Eurosystem's Household Finance and Consumption Survey (Household Finance and Consumption Network 2013); unweighted average Source: IMF 31 Einmalige Vermögensabgabe? Division of wealth(B€) 12.8 10,000 75.8 612.6 75.8 777.6 742.5 202.8 928.2 9,282 9,000 7,776 8,000 7,000 7,425 6,126 6,000 5,000 4,000 3,000 2,028 2,000 758
1,000 128
0 Ireland xxx Income from 10% wealth tax Sources: Die Welt, bto analysis 32 758
Greece Spain Portugal France Italy Netherlands Germany 10% wären nicht genug! Debt overhang and income from a 10% wealth tax (B€) 2,000 1,462 1,500 1,283 1,234 928
1,000 778
743
613
500 370
13
Ireland 203
76
Greece 76
Spain Debt overhang Source: bto analysis 33 682
331
205
0 674
Portugal France Income from a 10% wealth tax Italy Netherlands Germany Solidarität wird teuer! Debt overhang (B€) 2,500 2,051 2,000 1,563 1,462 1,500 1,283 1,204 1,234 1,000 791
500 682
370
126
149
331
205
127
0 Ireland Greece Spain Portugal Share of debt overhang according to GDP Sources: ECB, Eurostat, Die Welt, bto analysis 34 France Actual debt overhang Italy Germany Zypern als Muster? Sources: The Telegraph, bto analysis 35 Pleiten sind normal Greece Mexico Russia Poland Chile Brazil Spain Turkey Austria Indonesia Germany China India Portugal Japan South Africa France UK Italy Share of years in default or rescheduling since independence or 1800 Total number of external defaults and rescheduling 0
5
10
15
20
Sources: BofA Merrill Lynch Global Investment Strategy; www.carmenreinhart.com; bto analysis 36 25
30
35
40
45
50
How to deal with too much debt? Austerity Growing out of the problem Back to Mesopotamia Inﬂation 37 Wirkt Geldpolitik? Jaime, Caruana If a medicine does not work as expected, it’s not necessarily because the dosage was too low. Maybe instead the overall treatment, and the role of the medicine within it, should be reconsidered. Most likely something else is needed General Manager of the Bank for International Settlements 16 May 2013
Sources: Speech of Jaime Curana to OMFIF (Golden Series Lecture), London, 16 May 2013; Bank of International Settlements "BIS Quarterly Review June 2013"; Board of Governors of the Federal Reserve System—
Press Release May 1, 2013 38 Verzweiﬂung greift um sich! Need to forbid usage of cash for payments NaIonalize all banks Force direct credit to companies for investments Wolfgang Münchau FT, Spiegel columnist Shows dangerous anti free market trend Sources: Eurostat; bto analysis 39 Lösung über die Notenbank Bilanz? After buying £325B of debt from the market, the public sector (the Treasury) is paying interest to itself (the BoE) on debt that it owes to itself. Instead of selling the debt back into the market, the BoE can re7re the debt. At a stroke, £325bn of UK government debt disappears. If the US follows suit, about $1.5T of US government debt will be reDred. The main obstacle to reDring the debt lies with the markets and credit ra7ng agencies. They may see this as a slide towards Weimar Republic economics: monetary ﬁnancing of government debt by prinDng money. Consequently, both the BoE and the Treasury cannot be seen to advocate reDring QE-‐acquired debt at this stage. Source: Financial Times, 11 March 2012, page 9 40 How to deal with too much debt? Austerity Growing out of the problem Back to Mesopotamia Inﬂation 41 Was tun mit dem Geld? An expert's advice To that question, I’d answer: Spend it! High living is the best tax shelter. Speciﬁcally: expensive, durable goods with high resale potential. Examples: Yachts, jewelry, art, antiques, land. Be sure the property yields no money income, only capital appreciation which you can cash in later. Milton Friedman Bonus: When you can, use the investment in the meantime—
like a vacation home or a Rolls-‐Royce. Source: Milton Friedman in "Strategy for Business", BCG Perspective No. 196 (1976) 42 Thank you for your attention More at: www.think-‐beyondtheobvious.com

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