The Corona-crisis – Weakens the crisis, our purchasing power?Inflation is the bugbear of those days. The Corona-crisis on our purchasing power answers to the four most pressing questions could have:.Markus Diem Meier2 Kommentare2Geringe investments and the reluctance of consumers to prevent currently a rise in inflation: However, after the crisis, this could change.Photo: Olivier bird sang why to come again, fears of inflation?
for the same reason, as it did after the financial crisis: Central banks create on a gigantic scale, liquidity, and countries spend a lot of money. Alone, the balance sheet total of the Swiss national Bank (SNB) has grown since before the financial crisis to more than eight times. However, in the Wake of the financial crisis, a reduction in overall demand had the result that companies have remained on their estates to sit, what slowed down the pressure on prices and led to even negative inflation rates. The time is different. If, as in the Lockdown, companies less are allowed to offer, it can lead to scarcity, which leads by itself to higher prices. Also, this Argument has fueled the issue of rising Inflation again.
which is Why a forecast of most Economists for the next time, however, no higher inflation?
until now, the demand for goods is significantly stronger than the offer of the company. The fear of bankruptcies, unemployment and loss of Income means that people often only buy the Essentials and everything else without. Therefore, the sale of watches and cars is broke especially. To is not a higher level of inflation to come, given the restraint in consumer spending. You even went back. According to the measurements of the consumer price index, the prices in Switzerland fall since February; in April, they fell by as much as 1.3 percent. According to the latest forecast of the Swiss national Bank, they themselves will rise in the year 2022, to just 0.7 percent.
Why not fuel the money of the Central banks to inject inflation?
A textbook wisdom says that inflation of the money supply sooner or later leads to Inflation. Because with more money, no real assets are created. Crucial in the analysis of the words “money” and “sooner or later”. The Central banks are creating lots of new money, but this is hardly in the economy. While the balance sheet total of the SNB has, since 2007, more than eightfold, this is not true for the actual in the economy, existing money supply.
The so-called M3 money supply, which includes cash, deposits at banks, savings deposits and time deposits has doubled in the same period, and increased by only 75 percent. In the case of the SNB foreign exchange purchases to the weakening of the Swiss franc – they are mainly for the Growth of the balance-responsible – led to a corresponding expansion of the banks ‘ deposits at your. But instead of that, the newly created money would have brought about low interest rates to more productive investment or to an increase in consumption, it has fueled the capital markets, and has led there since the financial crisis almost continuously rising prices. All of this does not guarantee that Inflation will also remain after the crisis is deep
What to expect when the worst of the crisis phase is over?
If the total demand is normalized after the crisis, is not excluded, a significant increase in Inflation. In a forum of Economists is headed for a number of reasons. The high level of debt of States stands out as a result of the Corona-crisis. After previous periods of very high debt, are freed of countries, often with a higher Inflation of your obligations. Because if the value of money goes down, so does that of the debt. But at the same time the purchasing power of the population decreases.
This does not higher interest rates as a result of the Inflation the governments the bill is too salty, you have an increase in Interest rate by market intervention prevents. Theoretically, it is also possible that Central banks will help out later in the States with newly-created money. This also leads to Inflation. However, this leads to a reduction of the debt by Inflation, or to a direct financing of governments by Central banks, would those give up, your goal is to keep prices stable, and its independence would no longer exist.
Already, the Central bankers set themselves violently against all efforts in this direction to the military. But this is also partly the result of demands and movements, which have to be seen in this independence anyway no sense and also no Problem if the Central banks spending directly to the States to Finance.
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