Die-Corona-means crisis for the development of mankind a notch. Up to seven percent of the global wealth could slump this year, depending on whether it it the Nations succeeds, the further spread of the epidemic and to limit the economic consequences.
However, a single well would be minus to be not that Drastic. Finally, the world experienced a similar severe setback in the Great recession of 2009.
Depending on the course of the pandemic damage the whole decade overshadow threaten. In the worst case, people need to calculate that your wealth increases in the coming years, significantly slower than in the past decades.
The consulting company Boston Consulting Group (BCG), a leader in the field of welfare state analysis, has for the first time, attempted to do so, the financial long-term consequences of Covid-quantify 19. The experts of the BCG design three scenarios: In your “Global Wealth Report” by the math, what is the meaning of various serious growth crises as a result of Corona for the prosperity of the world.
In the worst case, namely, that the Corona-the shock in the global economy to stay behind at the end of the damage can grow the assets until 2024 by only 1.4 percent per year. This was still slightly above the recent growth rate of the world population of a little over one percent, but only slightly. The Per capita wealth of the mankind would stagnate, and since the purchase is not taken into account power-sapping effect of the depreciation of Money yet.
However, even in the best case – a quick recovery from the slump of the virus-crisis – is expected by 2024 in the world with an annual Asset increase of 4.5 percent. That would be a marked deterioration over the past decade, as humanity was able to expand its prosperity by 6.2 percent annually. In 2019, the increase was even higher at 9.6 per cent. It was the second best year since the Millennium.
On the savers of the world hard times to come – or at least heavier. Because the past years were for Prosperity is an exceptionally good time. This was not least a consequence of the outstanding shares development market since 2009.
Especially in the USA, but also in many countries in Europe and Asia, people have invested large parts of their capital to the stock market and benefit from the value growth of the company.
“The past decade brought the longest bull market in history,” says Anna Zakrzewski, Managing Director and Partner at BCG and expert asset management.
What helped in the past with the rapid spread of prosperity, investment in productive capital, means in the Corona times, but now uncertainty. While equity indices such as the Dax or the Dow Jones recovered quickly from the crash of the spring of 2020, whether the exchanges can set the pace of this upward trend continues, appears to be uncertain.
According to the Economists, most of the economies until 2022 or even later again the efficiency of reach that you had to 2019 already. And that means that in the current stock valuations are already much anticipated.
The rate increases in the coming years could be as a consequence of the pandemic and Lockdown is so low.
German save conservative
The Boston Consulting experts assume that the can be increase up to 2024 in this country, even in the negative scenario of 2.5 percent per annum. Thus, the analysts trust, Europe’s largest economy and its savers more resilience than other Nations in Western Europe. This is in line with the forecasts of various Economists, the confidence of the German economy, a relatively quick return to prior strength. At the beginning of 2022, it could be to the extent, perhaps even by the end of 2021.
The calming evaluation may, however, obscure a large shortcoming to be overlooked. For Americans investment risks result primarily from fluctuations in the financial markets, the so-called volatility. Here, these fluctuations are of less weight, because Federal citizens savings largely away from the capital markets.
You considered only the financial assets of 41 percent of the savings of the Germans on the Bank account or in the Form of money seem to be in safes or other Hiding. In hardly any other industrial country, the trust in cash and Bank balances is as large as in the Federal Republic of Germany.
“Germany is a Nation of savers,” says Zakrzewski. The Problem is the return of Inflation might be, if the Corona-crisis is not a consequence, which is now immediately recognizable:.
“A depreciation of money of thrust does not appear to me as an unlikely scenario,” says the Economist, Podcaster and book author Daniel Stelter. Meanwhile, the “trillion had become” the smallest rescue unit, the pointing of the seriousness of the situation.
The aid programs of governments and Central banks have set an intervention spiral, from which there is no Escape. In dangerous Combination with de-globalise and Zombification of the economy, the Rescue trillion could be abruptly in demand.
The relative scarcity of goods and services would lead, given the liquidity flood, to a High-speed of the prices. The acceleration in the velocity of circulation would then do the Rest.
Exactly that would be disastrous for German savers: the reality of their unremunerated Savings would lose drastically in value. Last alone, the Bank deposits amounted in Germany to 2.4 trillion euros (or the equivalent of $ 2.7 trillion), as data from the financial news service Bloomberg. Since 2016, the German citizens to achieve with conservative interest-bearing investments are no longer making a profit, which is above the rate of inflation.
The fears of Stelter and others prove true, should, could accelerate the real loss in value in the coming years. “Even with rising Inflation the European were to be bound in Central Bank hands,” says Economist Stelter.
The enormously high levels of debt in the monetary Union and, not least, the problems of the second-largest Euro-state in France to speak out against a more restrictive monetary policy with higher interest rates for savers.
Assets in the United States grew much stronger
All of the German middle class is especially. Their preference for conservative and supposedly safer forms of saving has the advantage that the assets in this country, not so Corona-exposed as they are elsewhere.
But it explains also, why the financial prosperity in Germany has not increased in the past decades, such as in the United States.
While the wealth in this country has risen since the end of the last century, from 4.1 to 7.7 trillion dollars, so almost 90 percent of the Americans about an increase of 172 percent.
Overall, the global financial wealth, according to BCG has data from 1999 to 2019, almost tripled, from $ 80 trillion in 1999 to 226 trillion dollars by the end of 2019.
Especially in the past ten years, the Era of the Wall Street and Nasdaq rally could millionaires and billionaires to increase their wealth faster than the middle class. The number of Dollar millionaires has climbed in this period from 8.9 million persons in at least 24 million. Setbacks have been relatively catching up fast again.
“Despite multiple crises, there has been asset growth are robust,” says Zakrzewski, and refers to past severe tests that could be relatively quickly done. After the severe banking crisis of 2008, the prosperity of the mankind has reached already two years later, a new all-time high. The global capitalism nothing throws so quickly off track.
The rich tend to invest in stocks as a “normal people”
The experts also noted that the asset has increased in concentration in the last ten years: According to the Boston Consulting millionaires were able to unite with 51 percent, a noticeably larger part of the global wealth as of 2009, 45 percent.
Well possible that the effect of Covid-19 break this Trend. The Wealthy are exposed due to their investment preferences (more shares) to be much more Expo than normal people.