The US scientist Hyman P. Minsky, who died in 1996, became known for his theses on the sudden crisis despite a booming economy. The idea: the longer the economy runs, the more likely it is that banks, companies, consumers and investors will lose their sense of risk. They change their investment strategy and plunge into ever more daring financing. The financial markets are running hot, optimistic statements are making the rounds: "There is no longer any economic cycle. Interest rates will never rise again." The end of the party is then triggered by an incidental event. In view of the high level of debt, even small price losses are forcing the first investors to sell. Banks are now beginning to reclaim their loans. The hunt for returns becomes the hunt for cash. That's the Minsky moment.

Today, Minsky's theory is more relevant than ever. If debt capital does not cost anything for a very long time, the probability increases that somebody somewhere will do nonsensical or high-risk things on credit. Finally, zero interest rate leverage is the most convenient way to increase returns. In recent months we have seen more and more questionable transactions. Austria, for example, was able to place a 100-year bond with a yield of 2.1 per cent. This is in line with the European Central Bank's inflation target. If it reaches it, investors have secured real zero for 100 years. Argentina also managed to sell a 100-year-old bond - even though the country had already gone bankrupt eight times in its history. In Munich, a listed apartment building has just been sold at 70 times the net cold rent. And the painting "Salvator Mundi", attributed to Leonardo da Vinci, achieved the record auction price of 450.3 million dollars. The hype about the introduction of new crypto currencies also falls into this category.

There would be countless other examples. They are evidence that the Minsky moment is lurking in the background. He doesn't have to come in in the next few months. Or next year. But investors should be prepared. That's why many of the stories in this issue are about risk. On page 56, we present a model that warns you promptly of thunderstorms on the capital market. The current weather report is published monthly at www.private-wealth (user ID: privatewealth, password: defense). If you register there in person, we will even send you a message if a storm threatens. Because as always, the Minsky moment will come suddenly. Then there's no time to lose.

Sincerely,

Klaus Meitinger Editor-in-Chief

Moritz Eckes publisher