This year, the balance sheet of InterFace AG for 2009 was finished as early as February. When we analyzed the result, we discovered that the interest we were paid for our investments in 2009 was significantly less (in the five digits range) than in 2008. Mind you, this happened although we had put quite a bit of the profit into savings and 2009 was a good business year for us.
The explanation dawned on us quite soon:
Between 2008 and 2009, there was a drastic decline of interest rates. Nor did the trend reverse itself during the first months of 2010. On the contrary: currently, we get less than 1 % interest for our investments. Taking the inflation rate into consideration, this adds up to a negative interest rate.
The banks should currently enjoy golden times. They practically get their money for free! However, the interest rates for mortgage loans and overdrafts are hardly lower than before.
Wrong! Many banks are still in dire straits. I just read that nobody knows how, for instance, the Commerzbank is supposed to pay back its federal loan.
I used to believe that banks are supposed to take money from people who can spare some and give it to enterprises and persons who just need some. But apparently, bank business no longer has anything to do with the classical bank mandate.
Surprise, surprise! I recently read in the “Süddeutsche” that the Deutsche Bank, after now having again finished with a huge profit in 2009, no longer considers bank stock as investment. Instead, it is now considered an object of speculation. That sounds plausible. Consequently, you would have to end up making a profit if the market value climbs. And it is only logical that declining market values will cause loss.
RMD
(Translated by EG)
P.S.
A reader of my 6 % article wrote to say that “tax evaders” actually do have to pay 6 % per year (plus interest on interest). If it is considered tax fraud, you will even pay 12 %. Phew!
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