{"id":22375,"date":"2022-04-25T13:52:09","date_gmt":"2022-04-25T11:52:09","guid":{"rendered":"https:\/\/fiala.de\/inflation-when-money-is-no-longer-worth-anything\/"},"modified":"2023-03-30T18:38:44","modified_gmt":"2023-03-30T16:38:44","slug":"inflation-when-money-is-no-longer-worth-anything","status":"publish","type":"post","link":"https:\/\/www.fiala.de\/en\/inflation-when-money-is-no-longer-worth-anything\/","title":{"rendered":"Inflation: When money is no longer worth anything"},"content":{"rendered":"\t\t
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Inflation and its prospects<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Things look bleak, and not just at the supermarket checkout and gas station. With a current inflation rate of over 7.3%<\/strong>, we can practically watch our hard-saved wealth shrink. What was a small luxury<\/strong> yesterday can be prohibitively expensive today.<\/p>\n

After more than two years of a pandemic, a European conflict and a vaccination marathon, we are now facing the next catastrophe<\/strong>. Goods and services are becoming more and more expensive. Gasoline and energy are unaffordable and reserves for old age<\/strong> or larger investments are melting away with each passing day. If inflation persists<\/strong>, there is even a risk of damage to the economy in the long term. Experts believe that the current situation is not just one of classic inflation<\/strong>, but one can speak of so-called stagflation<\/strong>. A neologism from the 1970s, when people were also concerned about economic growth<\/strong>, a rapid rise in prices and a constantly high unemployment rate<\/strong>. <\/p>\n

Unpleasant times for the land of savings books and conservative investors<\/strong>. Instead of interest and compound interest<\/strong>, which have been below the rate of inflation for years, even more bitter times now await us. Lucky are those who have diversified<\/strong> their assets<\/strong> and have already got their flocks in the dry before the pandemic.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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What means inflation<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Inflation<\/strong> is a percentage change in the price situation<\/strong> on the free market. To measure these, a fictitious shopping basket<\/strong> is used as a reference, containing a cross-section of shopper behavior and types of goods<\/strong>. If prices rise disproportionately (2% inflation is desired by the economy) while interest rates are low or even falling,<\/strong> this is called inflation<\/strong>. In this context, changes in the price structure of services, consumer goods and food <\/strong>must occur in equal measure, with the effect that the purchasing power of a single euro decreases. Inflation, even supposedly low, can be perceived by the population as significantly stronger, especially in poor economic conditions<\/strong>. This “perceived inflation” can deviate greatly from the real nominal value. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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How to protect your assets from inflation<\/span><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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