Dear readers,

In the next few months, we'll probably take big steps back towards normality, thanks to vaccination in Europe. That is wonderful. At the same time, however, it is now high time for some fundamental thinking - about the role of the state, economic policy and monetary policy. It's about exiting emergency mode.

No doubt about it. When disasters strike, the state is called upon. After that, it should back off. Currently, the discussion is exactly the opposite. Father state is supposed to provide higher wages, more social security, more regulation, more justice and more prosperity. Individual responsibility, competition and the market economy are being written in small print right now. Is that what we want? The stories in this issue underline that innovation is made by entrepreneurs - not civil servants.

We are also at a crucial crossroads in monetary policy. Over the next two years, almost all economists predict that Europe will experience an economic boom with nominal growth rates of between five and seven percent. It should be obvious to everyone that zero interest rates or even negative interest rates are not appropriate in such an environment.

We see two possible directions. One is the path of gradual interest rate increases. The infinite source of money would bubble less strongly. Sovereigns would have to be sound and pay somewhat higher interest rates on the small portion of their debt that is up for refinancing. And the party in real assets would probably be over. That might be unpleasant. But investors and government budgets could take it. The alternative is to stick with the negative interest rate policy "so as not to jeopardize the economic recovery." The ECB would then probably have to buy up all bonds and abolish the steering mechanism of interest rates altogether. Governments would have infinite capital to fund "more government" and further fuel growth. Buying real assets on credit would be even more attractive. Economic and real asset booms would accelerate until.... .

We all suspected long ago that this would not go well. Perhaps now comes the ECB's last chance to secure long-term monetary stability. We are curious. Because investment strategies differ in each scenario and can change very quickly, we will comment on this regularly at www.private-wealth.de. Just sign up.

Yours sincerely

Klaus Meitinger Moritz Eckes
Editor in Chief Publisher