Be it the real estate and share rally in Japan in the 1980s, the technology boom at the turn of the millennium or the subprime crisis: all these bubbles are a joke compared to the bubbles that have recently emerged in the government bond market of the European Monetary Union. Thanks to politicians, banks and insurance companies see these as "officially" risk-free and buy them almost indefinitely. I emphasize "officially" in this context because this is of course not actually the case.

This is because no government actually has its own central bank anymore, which can print money if necessary to provide the state with funds. This was true at least until 2012, when Mario Draghi announced that he would do whatever was necessary to save the euro. The eurozone states were now able to continue diligently adding new debt to their existing debt - thanks to the ECB's measures, interest rates remained low.

Income lost due to corona? No matter, you can continue to consume with short-time work benefits or dollar checks.

All of this serves one main purpose: politicians want to enable voters to consume today what they may only be able to afford tomorrow, or perhaps never. Income lost due to corona? Never mind, you can continue to consume with short-time work benefits or dollar checks.

I am not questioning the fact that these gifts of money are absolutely understandable from a social point of view. But they are financed with government bonds, which are still considered completely risk-free despite rising debt and a weak economy. In this respect, they are essentially no different from the subprime bonds that triggered the real estate crash in the US.

Would you lend the Italian state your own money for ten years at one percent interest? Probably not. The managers of banks, insurance companies and pension funds do it anyway, because it is not their own and because the state has created an irresistible incentive to buy by making it risk-free by law.

It will become clear that central banks can ensure the nominal value of all that money, but not the real purchasing power.

It is fascinating that such investments are not only permitted as pension products, but are also prescribed. After all, increasing deglobalization due to trade conflicts will lead to fewer opportunities for consumption and ultimately to rising inflation rates. It will then become clear that central banks can ensure the nominal value of all that money, but not the real purchasing power.

That is why, according to my calculations, even the more solid German government bonds will lose a third of their value in future - per decade! And that is still the best case scenario.

The only reassuring thing about this bubble is that it will not burst. In contrast to previous cases, it did not come about because the state wanted to solve certain problems in the private sector. Countries are using it to cover up their own decades of mismanagement. And of course they don't want to admit it to themselves.