The banking expert Markus Krall, described by the leading media as a crash prophet, has also been criticized by us for some of his statements in recent years. Nonetheless, in recent years he has provided some very interesting and noteworthy analysis of the financial system. Years ago he spoke of the onset of hyperinflation. Was he right, only it took a little longer? In a current interview with Marc Friedrich, Markus Krall talks regarding the fact that we are now facing stagflation – i.e. the phenomenon of simultaneous recession and inflation (Here is a more detailed explanation of the term).
Why Germany is on the verge of stagflation – Markus Krall with explanation
Why are we so close to stagflation? On the one hand, according to Markus Krall, there is inflationary pressure due to the enormous money supply overhang that was created by the ECB. At the same time you can see the collapse of the supply chains. And Germany is facing a recession. The whole situation is stagflationary and increases the ECB’s dilemma. According to Markus Krall, it doesn’t matter what the ECB does, it will only get worse. The inflation was triggered by producer price inflation, which is currently over 30 percent. With a gap of 3 to 6 months, this inflation breaks through to consumer prices.
Autumn will decide
According to Markus Krall, autumn will decide regarding stagflation. Because in autumn the energy crisis will come to a head. The effect of the wrong political decisions will then be passed on to the rising prices. Markus Krall mentions what is actually not yet on the horizon in Europe – namely the possible upcoming recession in China. In his opinion, the “relaunched planned economy” there has choked off economic growth. He sees a socio-political crisis looming in Germany that might pose a threat to democracy.
How do citizens protect their purchasing power now?
Not only with a possible stagflation, but also now with the high inflation of currently 7.6 percent in Germany the question arises as to how citizens can protect their purchasing power. According to Markus Krall, this is difficult because of the income. When it comes to consumption, spending can be reduced or postponed to the future. It is most likely to be in asset allocation. He himself admits that as the head of Degussa he is of course trapped, but he is still clearly in favor of tangible assets such as precious metals, including gold and silver in particular. He also mentions stocks as an investment opportunity. Real estate is problematic because of the existing bubble and the now rapidly rising interest rates.