Historical Fact: Some readers may have a pressing question: What happens to debt, including mortgages, under hyperinflation? In finance, there is a popular quote, “there is no free lunch.” By 1924, Weimar Germany will redenominate and reinstate debt into the brand new Rentenmark after bailing out Deutsche Bank and Commerzbank. It’s a messy process and beyond the scope of this publication you’re reading.
The prominent German industrialist Hugo Stinnes suggests a fringe dictatorship might seize power because the poorly drawn up armistice extracts too great a toll on the Teutonic nation. He reckons that one of the infant right wing parties could take power some day. Whatever the case, trouble is brewing.
ON JULY 4TH President Joe Biden stood on the White House lawn to declare that America was nearing independence from the coronavirus. But with covid-19 not fully “vanquished”, he called upon his fellow citizens to get vaccinated, telling them that “it’s the most patriotic thing you can do.” About 55% of Americans over the age of 12 have now been fully vaccinated, and a further 10% have had the first of two doses. But in recent weeks America’s vaccination rate has slowed markedly. In April 3m doses were administered each day; since June that figure has fallen to an average of 1m per day.
There are three possible explanations for this slow-down. The first is that it is typical for vaccination rates to fall as more people are jabbed, since those in cities and other easy-to-reach areas are likely to have been targeted already. Yet America does not appear to have reached such a threshold. Other rich countries, such as sparsely populated Canada, continued to vaccinate at a decent clip until about 75% of their populations had received their first dose (see left-hand chart). Germany, which has vaccinated a similar proportion of its citizens as America, is currently vaccinating at nearly three times the rate.
Germany’s Federal Fiscal Court, the Bundesfinanzhof, demanded changes Monday to pension taxation to avoid future double taxation of retirement savings.
Prior to 2005, pensions had been basically tax-exempt because contributions came from taxed salaries. Under a 2005 law change, pension contribution payments gradually become tax-free. However, the taxable share of the pension increased. Because of the change, there is the potential of double taxation during the transition period if the tax-exempt portion of the pension is less than the contributions made earlier from taxed salaries.
A married couple who were assessed together for income tax purposes in 2009 filed a complaint against the rules, alleging that their 2009 tax assessment was unlawful. The court rejected the complaint as unfounded, stating that the plaintiffs had not been violated of their rights.
But here’s what I only started to understand last week (and I was kind of mind-blown by that, so I’m thrilled to share it with you): Our life expectancy increases with every minute we live. When I turned 30, my life expectancy got up to 90.37 years. Once I turn 80, it’ll be 93.76 years.
A mix of hard lockdown, vaccinations and testing is necessary to “prevent intensive care units from being overflowed,” the head of the German Interdisciplinary Association for Intensive Care and Emergency Medicine, Christian Karagiannidis, told the Rheinische Post newspaper.
Last week Austria, Norway, Denmark, and Iceland all suspended the administration of the Oxford-AstraZeneca COVID-19 vaccine, citing reports of blood clots occurring in a few folks who had been inoculated with it. Ireland, France, Germany, Italy, Spain, Thailand, and the Netherlands have now joined them.
“There is no causal effect established or anything like that yet,” Irish Prime Minister Micheal Martin told CNBC, “but as a precautionary move in line with the precautionary principle and in an abundance of caution, our clinical advice was to pause the program whilst the EMA does a review of this.”
The precautionary principle is an ideological construct that eschews risk-benefit evaluations and essentially requires that all new technologies be somehow proved entirely risk-free before they can be used.
Germany’s biggest lenders, Deutsche Bank AG and Commerzbank AG , have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say they can no longer absorb the negative interest rates the European Central Bank charges them. The more customer deposits banks have, the more they have to park with the central bank.
That is creating an unusual incentive, where banks that usually want deposits as an inexpensive form of financing, are essentially telling customers to go away. Banks are even providing new online tools to help customers take their deposits elsewhere.
Banks in Europe resisted passing negative rates on to customers when the ECB first introduced them in 2014, fearing backlash. Some did it only with corporate depositors, who were less likely to complain to local politicians. The banks resorted to other ways to pass on the costs of negative rates, charging higher fees, for instance.
Absent that nightmare scenario—and most prognosticators believe science can vanquish any of COVID-19’s shape-shifting—the conventional Wall Street wisdom is for better days ahead on both the health and the economics fronts. And since escalating rates are co-dependent on an improving economy, a sunny thesis appears pretty solid.
Historically speaking, low rates like today’s are an aberration. Thus, at some point, it’s reasonable to assume they will return to normal. Or at least to higher than now, to a degree. A new normal that’s hardly towering.
At the same time, as coronavirus case counts soar in each of these four nations, publics are largely split on whether their country has done a good job handling the outbreak. Ideology plays a role in people’s assessments of their national coronavirus response, but this rings especially true in the U.S. and UK, where those on the political left are more critical. Those who feel better about their nation’s economic situation are more likely to give positive reviews of how the virus has been handled thus far.