Topic: Inflation hitting a 25yr old record | Predictions for the future - page 2. (Read 428 times)

The increasing inflation is currently soaring across the globe, leading to excessive price increases in most goods, in fuel and energy. To make matters worse fuel and energy costs are not included in inflation's index, thus, a 5-6 or 7% increase, is actually a lot worse than anticipated.

In particular, Greece is now facing a 6.2% rise in inflation, compared to January 2021, the largest ever recorded since 1997, compared to 5.1% in December. Increases are now spreading across the spectrum of the economy and not just energy, as it was a while ago, thus reducing disposable income and reducing inflation not to an economic issue but to a wider social issue.

According to ELSTAT data, the goods with the largest increase compared to January 2021 are:

Natural gas with an increase of 154.8%
Heating Oil with an increase of 36%,
Electricity with 56.7%,
Fuels with 21.6%,
Lamb and goat with 17.6%,
Olive oil with 15.4% and
potatoes with 12.3%.
Fresh vegetables 14.4%
 
The situation is about to get worse, with depressing predictions of it surpassing 7%-8% in the upcoming March. How are we dealing with such a situation? It feels like a battle against an invisible enemy. Our available income is shrinking, what is the best way to tackle inflation? The most common answer I've seen is to invest, rather than save, but how exactly do you invest? Since when is buying cryptocurrencies, such as Bitcoin, tackling inflation, since it can also face periods that it's losing value.

Is it going to get any better, and how soon is that going to be, if prices ever recover. Personally, I highly doubt it that the situation is going to get any better within 2022.

That's why I was quoting Germany and its stupid solar program as an example.

When you need heat in the winter you need it during the night, when there is no sun.
When you need cooling during the summer you need it at peak sun hours, when there is also peak solar energy production.
Basically, when it comes to heating during cold winter Europe has only one chance we ditch coal, nuclear,  but during summer days we, fortunately, have another option.

Inflation doesn't go down drastically. It always happens slowly and steadily if corrective measures are taken by the government. The only way to deal with inflation is to reduce the demand. To reduce the demand, tou have to suck out the excess money from the hands of the common people to government coffers. Interest rate increases and higher taxes are the most effective ways to do that.

For a common people to survive during high inflation, he has to invest in an inflation adjusted instruments like real estate or Gold or cryptos. So when the purchasing power of a currency goes down, the prices of these assets goes up to fill in the hollow.

The situation won't get better anytime soon in my opinion primarily thanks to factors like the pandemic, corruption etc and this has been the case for a long time now. I would be surprised if inflation actually goes down drastically.

The ones who adapt successfully to these rising prices will continue to survive while the rest will perish since it's survival of the fittest in this world.

While I see where you're coming from, doesn't the same thing occur in the summer? A/C units use a ton of energy as well, however, I'm not sure on how comparable these two are. Particularly here, there's a widespread issue during the summer, due to the vast number of hotels opening up, the energy supply cannot keep up with the demand. However, this is probably an isolated incident and definitely doesn't occur throughout the globe.

My country does nothing, they are just hoping people will get used to the prices. If I have money, I'll just invest in real properties where I can make money through rentals or buy a farm.

.... in my country, fortunately, we have sufficient resources to meet domestic needs and do not need to import too much from other countries. so that the inflation rate here is quite low and under control.

That's what concerning me, fuel and energy prices hardly ever decrease, especially after reaching such prices. Eventually, they will drop, but they certainly won't return where they used to be.

Less energy is needed to heat houses, be it gas or electricity, less energy to heat schools, administration buildings even malls and shops, less demand means lowering the prices to acceptable levels. Europe imports now energy in all forms because during winter it can't function on its own production, once the days become longer, those damn solar panels that are useless in winter finally produce something, you don't need to burn that much stuff for electricity and so on and on. Once the entire oil industry is back on track it's simply impossible for the prices to be that high, all this happened because the world nearly stopped drilling and just barely bounced back although transportation and agriculture are back to pre-pandemic level consumption.

It's not going to get better or get back to what we've used to see. Once the price especially for fuel and other energy commodities rises, it's hard to pull it back. That's the reality that has been happening all of these years.

Good for those countries that have been researching and making renewable energy as a source as they might feel a little or not feel that much with the global economy's inflation and issue that's being tackled from country to country.

The solutions are what you've said, anything that you can hedge against the inflation like bitcoin, real estate, gold, income-generating asset. You invest on them. Don't forget that when crisis happens and you're affected by a possible war, cash is still needed.

Is it going to get any better, and how soon is that going to be, if prices ever recover. Personally, I highly doubt it that the situation is going to get any better within 2022.

It's a vicious cycle, the increasing cost of fuel has led to the increase of transportation costs, which obviously leads to higher prices in goods, in order to compensate for the difference. Same thing goes for electricity. However, you're mentioning that winter is about to finish, how is that going to make a difference in energy and fuel?

It's definitely not going to return to quarantine levels, that's for sure, but with the upcoming tourist season only a few months from now, I find it hard to believe that anything is going to change for the better, anytime soon.

Not totally invisible, from the Acropolis just look a bit to the left from the direction of Istambul with a really good pair of binoculars about, 3000km away! 
Just like in my case here and almost everywhere in Europe inflation is triggered by energy prices, look at Japan, finally getting 1%, Australia is at 3% just like Vietnam. If you haven't made the mistake of printing money and you don't really on some war mongrel for fuel this would have passed easy.

That said, things can't get on like this if they are only caused by energy, there is a barrier to how high prices can go before finally some other means of production strat becoming profitable, just like shale drilling did, and how Canada is ramping up production as never before.
Winter is almost done, one last push and we're out of this mess for a while, it will help a lot especially with gas and electricity prices, not that they are going to go back to the past levels but growth will slow down to maybe hopefully a near-complete standstill.