Written by 10:42 Financial Centre, Member, News

DVFA Investment Professionals Take a Critical View of Big Government in the Longer Term

The topic of the DVFA monthly question in July was the current geopolitical situation and turning times and what they might mean now.

Cold War 2.0 or Regime of Radical Insecurity

The first question dealt with the association of terms with the new political regime. The paraphrases “Cold War 2.0” and “regime of radical insecurity” were almost on a par here with 44 % and 43 % respectively. 13 % opted for “postmodernism”.

Trade now without change? Remains to be seen

The next question asked whether the policy approach of change through trade has failed. 48 % think it is too early to judge. 36% see the approach as a failure and 16% still give Change through Trade a chance, answering no.

Length of new phase unclear

The question 3 was to define the epoch we are probably in right now. Half of the investment professionals think that it is not yet possible to say. 21% think it will take much longer than 10 years; 17% think a decade is realistic and 12% believe it will be shorter.

Great concern about too much state

The increasing trend towards more government and industrial policy is viewed very critically. In the comments, this path is regretted but seen as probably without alternative, also due to failures in the past – for example, the timely adjustment of the structural framework conditions. 58 % of the survey participants view the situation with concern, 28 % think one should continue to observe the development. 12 % think the trend is necessary and good, and 2 % have no opinion on the subject.

Personal fear of war and loss of prosperity

The last question asked which effects the investment professionals feared most for themselves personally. The threat of war was answered by 32%, inflation by 28%. Only 1% feared the threat of unemployment. Loss of wealth was the most frequent response to the question, at 39%. There is a strong awareness that people in the financial sector are in a rather privileged situation. A loss of prosperity reflected in the population as a whole could mean that there will be a further division in society, the middle class will be burdened even more and the gap between rich and poor will widen.

"The medium-term concerns about the renaissance of state interventionism and the personal fears of war and loss of prosperity were most clearly heard. Because of the feared loss of prosperity, there are also fears of stronger redistribution discussions in German society."

Ingo R. Mainert, Deputy Chairman of the Board of DVFA

Text: DVFA Press Release
Cover Image: Unsplash

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