Many savers are worried about their fortunes in the usd crisis. But what happens during a currency reform with current loans? Pixocredit has started a survey on this question. One of the findings of our study: Many consumers consider current loans dangerous in a currency collapse, but historically this concern is rather unfounded.
The question was asked to 1040 people, which happens in case of a currency reform or similar events with current loans. The representative survey was conducted on behalf of Pixocredit by the market research institute Yuuboot in the period from 14 to 16 October. The participants could choose between seven answer options.
Loans and usd Crash: What do Germans think?
38 percent of the respondents believe that a current loan remains in the event of a currency collapse, but wages and salaries decline. In this case, the credit burden would actually grow. Particularly striking: 26 percent of respondents said they had no real idea of the impact of currency reform on current loan agreements. This extremely large proportion makes it clear how much uncertainty is involved in this sensitive problem in the game.
16 percent of respondents believe that loans are not affected by currency collapse. A further 15 percent of participants expect credit balances and loan liabilities to be cut to the same extent in such a situation. After all, 11 percent trust the German state to provide additional security to borrowers. B. demand in the form of forced mortgages.
On the other hand, only 6 percent count on state aid and consider it possible for the state to reduce its debts – eg. B. by a transfer to the state-owned HeW. Also, 6 percent of respondents believe that large loans over 50,000 usd will be canceled, while smaller loans will persist.
There are hardly any differences between East and West
Between East and West, North and South, as well as between men and women, there were hardly any significant differences in the answers. Noteworthy: in the income groups “less than $ 500” and “$ 2500 to $ 3,000”, more respondents tend to believe that the credit burden will increase in real terms through a greater adjustment of incomes than credit downwards. Even young people between the ages of 18-24 are more likely to feel such a scenario than older people. With a higher level of formal education, this concern is also growing.
As a result, three-quarters of the respondents fear a monetary reform or a similar escalation of the usd crisis from the perspective of a borrower (!). Historically, this view is incomprehensible: in the last three currency reforms in Germany, borrowers were much less affected by it than savers, or even de facto relieved.
A look back in history: currency reforms and credit conversions in Germany
In the past 90 years there have been several currency reforms in Germany. In 1923, there was great inflation, at the end of which the former currency “Mark” was switched to the new Reichsmark in the ratio “10 trillion to 1”. Savers were thereby expropriated to nearly 100 percent, borrowers against it to nearly 100 per cent of the debt. Homeowners had to pay from 1924 to 1943 a so-called “house interest tax”, which should compensate for the resulting from the devaluation advantage. Simple personal loans were, as far back as they were, simply “disappeared”.
Only 25 years later, in 1948, a currency reform took place in what was then the western occupation zones. In the course of the introduction of the German mark loans in the ratio 10: 1 were converted. Wages, pensions, pensions, rents, leases, etc., however, were converted at a 1: 1 ratio – in effect, borrowers were thus released from the currency reform. Even after the war, there was a burden-sharing, which was to compensate for the debt-forgiveness advantages created by the currency reform. However, it mainly concerned real estate owners and commercial loans and not private loans.
Borrowers are among the winners of currency reform
In 1990, the German Mark was introduced in the former GDR. Again, this was a currency reform that favored borrowers. Loans were converted at a ratio of 2: 1, while wages, salaries, rents and other recurring payments were in the ratio 1: 1.
Historically, borrowers are among the winners of currency reforms and similar events. In particular, there has never been a real appreciation of liabilities in the past. The opposite was the case: since the economy had to be restarted quickly after the currency reforms, “legacy” was reduced or even eliminated by favorable changes.
Do not postpone sensible loan plans
For private households, the usd crisis should therefore not be a reason to forego meaningful loans or postpone planned projects. The credit environment has never been as favorable as it is now: interest rates on personal loans are lower than ever since the Second World War.
It is to be feared that many loans will nevertheless be postponed because the risks of a possible currency reform are too undifferentiated. This could be a reason for the demand for consumer loans, which is only moderate despite the best general conditions.