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DW-TV: And joining me now is Klaus Deutsch of Deutsche Bank Research. Now, are you an art connoisseur? What kind of art would I find in your house?
Klaus Deutsch: Well, you would find posters from Kandinsky and Picasso but no real art.
DW-TV: So, nothing you would sell to the highest bidder and make a lot of money with?
Klaus Deutsch: Well, I couldn't afford Picasso, so that's the problem.
DW-TV: Well, but there is a lot of money to be made with the originals, with art - does this boom that we're witnessing right now reflect in any way the actual economic situation? Are people that wealthy right now?
Klaus Deutsch: Well, yes and no: "yes" because you see a growing number of people being very wealthy worldwide and they demand art, so this drives prices up, because the number of old paintings is limited. But you also see it's a very special market, a very small and tiny market like gold or other special markets, and they're not really driven by the overall economic situation. But to some extent it's maybe a reflection that returns on interest or on dividends or shares are not as high as people expect, so they would like to invest in art.
DW-TV: Are you into football - or soccer?
Klaus Deutsch: Sure.
DW-TV: Well, to many people - and perhaps you will agree - soccer or football is also a kind of art form and right now the German economy should be profiting from the World Cup tournament. Let's find out about the actual economic mood. Here's our monthly D-B-I-X. Exclusively created for DW TV by Deutsche Bank Research, the D-B-I-X is based on economic data from Germany, Japan and the US. Our D-B-I-X takes into account the latest survey by the German ifo-institute, the current business prognosis by 400 US sales managers and the latest Japanese E-S-R-I results.Now, over the last few months, the D-B-I-X was constantly rising, reflecting an ever improving economic mood,but lately, the index - here in orange - has gone into a slide. The ifo-index, here in green, still looks a bit better, but even here the best days seem over. Klaus Deutsch, what happened?
Klaus Deutsch:
Well, essentially, US managers who do the purchasing for the retail and wholesale trade have become less optimistic. This is due to rising commodity prices, to general inflations, fears, too - a dampening of economic activity to some extent - so we are seeing a normalisation of growth patterns in the United States. In Germany, we still have very strong expectations of a good performance this year and good numbers on the ground as well.
DW-TV: But will we feel the effects of this dampening mood in the US as well over here?
Klaus Deutsch: Well, over time, sure. Export demand for German cars and other export products might decline a little bit. So it might reduce the profits of German corporations over the medium term.
DW-TV: Alright, but at the moment the World Cup keeps our spirits up high - after that, what are we in for, another recession?
Klaus Deutsch: No, but probably a dampening of economic activity in Germany as well, but this is not due to the United States but to our domestic economic policy, in particular the tax increase.
DW-TV: All right, we'll be talking about that another time. Klaus Deutsch, thank you very much for being here.
