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Frankfurt banking district
Photo: Frank Rumpenhorst / dpa
So now the time has come.
After years of nagging about supposedly false zero interest rates, Europe's central bank raised its key interest rate again for the first time on Thursday - by half a percentage point.
Is redemption now coming for Germany's savers?
Is there now an end to what eager professors have been shouting up as expropriation?
Not really, of course.
At least if inflation is still so high - and there are still negative interest rates in real terms.
And if at all, only if the turnaround in interest rates does not soon contribute to what is currently becoming apparent: that the economy will slide into a recession.
Because those who are unemployed or losing income also have fewer opportunities to save.
A little higher interest rates don't help either - and much higher rates would only make things worse.
Because that would also drastically increase the cost of financing for anyone wanting to invest -- which would only throw the economy into an even worse recession.
There are already increasing signs of a slump in construction activity.
Then there would be a lot to be said for the central bankers cutting interest rates again in the foreseeable future;
and at least stop the upward turn again soon.
Central banks in panic
There is something else that speaks against the saga of the redeemed saver.
Above all, it is one industry that is very happy about the end of zero interest rates: the banks.
And with some probability not out of pure empathy with their saving customers.
The fact that the financiers are the happiest says a lot about where the damned zero interest rates actually came from – and why the drama surrounding them doesn't simply dissipate when the central banks panic hike their key interest rates.
The phenomenon has it all.
As the management consultants from PwC have just calculated, the earnings of German banks in the overnight money business are expected to more than triple this year to 3.3 billion euros - reports the "Handelsblatt".
Of course, savers also get (slightly) more interest on their call money account when the key interest rate is higher.
However, the banks also invest their money.
In addition, the financial institutions give credit, on which they now charge more interest.
And the assumption is obvious that they get more money than they give to the savers.
Makes, right, an increasing profit.
According to estimates by the PwC experts, thanks to the farewell to the evil zero interest rate, earnings should even increase to almost 15 billion euros in the coming year.
Interest rates high, bank happy.
The fact that this is the case also explains in retrospect, of course, why bank economists such as the chief economist at the troubled Commerzbank have always been at the forefront in recent years when the evil ECB had to be horribly scolded - for allegedly only doing all this for the slobbering Southerners do.
And because that is terrible for the savers.
It was terrible, especially for our own bank.
From there it gets a bit cheeky.
Zero interest as a receipt for bank excesses
If interest rates have fallen at an accelerated rate since the Great Financial Crisis of 2008, that was not a whim of lousy central bankers - but a direct consequence of this crisis.
A fundamental crisis in the banking world.
Because in the unleashed world of finance it has always been more lucrative to invest in financial products than in the real economy.
And that favored all these excesses and private credit hypes, which eventually led to the crash.
After that, the pressure to reduce debt prevailed for years.
Which, in case of doubt, only increased the tendency towards underinvestment.
Result: too little real credit demand and growth, and too much financial magic.
Which as a combination led to a lot of deflationary pressures for a long time – so prices threatened to fall rather than rise.
Interest rates therefore had to fall drastically.
To which the central bankers around the world then made their contribution – by further lowering the key interest rates in order to avoid deeper crises.
If true, it makes the years of nagging some bankers seem all the bolder - as does their current joy (which most are still trying to bite back).
Then the zero interest rates were a kind of acknowledgment of earlier bank excesses.
It is at least courageous for those responsible to complain about the consequences of their own disasters.
more on the subject
First increase in eleven years: What rising interest rates mean for GermanyBy Tim Bartz, Frankfurt am Main
The fact that they are now happy about the end of low interest rates is understandable from a mathematical point of view, but all the more bizarre.
At least in Europe, the higher rates are not because the danger of weak economic development and demand for credit has been averted - but mainly because Vladimir Putin is raging and the costs of raw materials, energy and food have exploded.
Higher interest rates, on the other hand, only help to a limited extent, if at all.
The fact that the turnaround in interest rates can quickly become dangerous is already suggested by the recent comments from the industry.
Because the higher interest rates are not met with excessive demand, which needs to be calmed, the risk of unwanted side effects is great – for the banks too.
In the executive floors, the joy of higher interest rates is mixed with the fear of a recession, according to the "Handelsblatt".
Clear.
Because the mixture of higher interest rates and the already acute recession dynamics can lead to defaults in the lending business - for example in construction loans.
It is still unclear whether the positive effects will outweigh the positive effects for the banks, says an analyst afterwards.
One could also formulate it differently: as long as the basic problem of a lack of real economic momentum and urgently needed investments is not resolved, simply raising interest rates will not help.
On the contrary.
As long as companies in Germany are making record profits, as they did this year, without spending the money on investments, that is not a sign of a healthy economy either.
Making profits (and bunkering) is not an end in itself.
Conclusion for Germany's savers: It only gets really good when interest rates rise again because the economy is growing healthily - and the central bankers are keeping the corresponding inflation low with moderately appropriate interest rates.
Not if, as they are now, amidst growing signs of a recession, they are trying to remedy supply-side inflation, which is extremely difficult to curb with higher interest rates and with a great deal of collateral damage.
