The inflation rate in the euro zone is counted with two digits. The prices are 10% higher than a year ago.
Inflation at its highest since World War II
The rise in prices is above all linked to the explosion in the price of energy. Fatal for a continent that imports more than 60% of its energy. Cutting the pipelines with Russia could not be done without clashes…
The price per joule is up 41%. Food inflation is also starting to take hold, up 12% year-on-year.
And here are the countries where things are going the worst in Europe:
24% – Estonia
22% – Lithuania
22% – Latvia
17% – Poland
17% – Netherlands
13% – Slovakia
12% – Greece
12% – Belgium
11% – Austria
11% – Germany
In Estonia, if inflation continues at this rate for another year, prices will have risen by 54% by next winter. In other words, purchasing power will have fallen by 35%.
If inflation stays at these levels for two more years, prices will be 91% higher. That is a drop of nearly 50% in purchasing power.
The Germans, with 11% inflation, will lose 50% of their purchasing power within five years.
The old continent is paying dearly for the proxy war wanted by Uncle Sam in Ukraine. The destruction of the NordStream undersea pipelines that linked Russia to Germany also suggests that the worst is ahead of us.
Brrrr…
The EU condemns itself to pay for its gas several times its normal value. So much so that Berlin announces a plan of 200 billion euros for its energy shield. And it will be 500 billion for the euro area as a whole.
So much money that will have to be borrowed and which, once in the economy, will make the price increases permanent. In other words, if inflation will end up slowing down one day, prices will not fall!
But there are limits to debt. The English have just realized this through the collapse of the pound Sterling. That’s what happens when you think you can tackle inflation while going deeper into debt.
It makes no sense to raise rates while borrowing 60 billion to pay for an energy shield. The Bank of England has no choice but to pull out its printing press, which has caused the pound to lose 10% in just one week.
Europe and the euro face the same fate if the ECB adopts the same strategy (raising rates while printing more).
Hyperinflation is coming, as predicted by bitcoiners who despite a 57% drop in bitcoin over the past 6 months, 78% of them failed to sell their BTC. Now is not the time to flinch. Hodl!
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