by Nils Klawitter
Spiegel
Online

The uncertain
financial markets and the euro crisis have left many Germans feeling
nervous. Worried about the security of their savings accounts, increasing
numbers of people are deciding they would rather invest in material
goods like art, vintage cars and real estate instead. But experts
warn that nothing is 100 percent safe any more.

Franz Herrmann,
head of the German Association of Savers (BDS), has spent half a
century trying to be a good investor. As a child, he filled piggy
banks and, as an adolescent, he put money away in his savings account.
Later came a building loan contract, in addition to 12 life insurance
policies. “Money attracts money,” his father liked to
tell him, quoting a German saying. “I was hardwired for saving
money,” Hermann explains.

At 52, he says
he figured out “what’s going on.” He’d earned money through
his business selling beer steins and jewelry in Munich’s city center.
But he became convinced that he’d actually lost money through his
savings efforts and cancelled his insurance policies, while the
small interest earnings from his remaining savings accounts were
“eaten up by inflation,” he says. To fight back, Herrmann
formed the BDS. Now he makes appearances around the country, warning
of “money-destroying instruments.” He’s certain that saving
is “state-sanctioned robbery.”

Becoming poorer
by saving? As radical as Herrmann’s perspective may sound, a growing
number of people share his mistrust. They no longer believe in the
rates of return promised by the financial industry, while savings
and fixed deposit accounts yield pathetic interest earnings, and
the never-ending euro crisis feeds fears of inflation or even a
currency devaluation.

Surveys by
the polling institutes TNA Infratest and Allensbach reflect the
current crisis of faith in Germany: Nearly half of the respondents
now fear inflation, while every second person with a job questions
which form of private investment even makes sense anymore.

Sports Clubs,
Art and ‘Cement Gold’

“People
are becoming increasingly cautious about entrusting their hard-earned
money to the banks,” says Rolf Bürkl of market research
institute GfK. It has yet to become a mass movement, but a significant
number of people are shifting their money around, cancelling supposedly
rock-solid financial products like life insurance. Some two years
ago, customers had already begun criticizing the weak returns on
such investments, according to Philipp Vorndran, capital market
strategist for wealth management company Flossbach von Storch. “Now
many people are asking themselves just what kind of products they
actually own,” he says.

Instead of
trusting German banks, many investors are turning to tried-and-true
institutions such as the Hamburg soccer club St. Pauli. Within the
span of just four weeks, some 5,000 fans recently bought a total
of €6 million ($7.7 million) worth of shares in the club so
it could build a new stadium. They were promised 6 percent interest.
The club seems like a secure kind of bank to many. After all, it’s
been around since 1910 and has survived the many crises that have
befallen Germany since then.

Until now,
polls and studies have always shown that Germans tended to save
even more money than usual during uncertain times, according to
market researcher Bürkl. But, lately, trust in the financial
system has been flagging so rapidly that the crisis has triggered
a kind of clearance-sale mood. “The fearful saver has turned
into the fearful consumer,” he says.

The trend hasn’t
yet been captured in figures, with the savings rate down only moderately
so far. But consumer confidence is rising, and the pre-Christmas
retail market wasn’t the only area to profit.

Those who can
afford it are putting their money into their own homes, in the form
of better insulation or renovations. Roofers are booked out for
weeks in many regions. The sector is one of the winners of the crisis,
growing some 5 percent in 2011 to reach almost €8.5 billion
in turnover.

Many people
want to swiftly stash their money somewhere safe. Those who can
afford it are investing in supposedly secure goods. Record prices
are being paid at art auctions. Meanwhile, in cities with booming
economies, such as Hamburg and Munich, real-estate agents are reporting
bidding wars over so-called “cement gold,” as property
has been dubbed.

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the rest of the article

January
9, 2012

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© 2012 Spiegel Online