YOUR MONEY IS WORTH LESS
Inflation was shot up to 7,40% before the start of the war in Russia and Ukraine, being more than three times higher than the increases that we were normally used to, a situation that we have already commented in previous articles. The problem is that we only needed a war that would limit free trade, forcing all economic agents to stock up with much more expensive options on the market. In addition to sanctions that, although the focus is on Russia, also have a direct impact on Europe and consequently on Spain...
What will be the scenario to live now?
Well, the reality is that a big problem comes to us from two main fronts...
1) The inflation that was already expected to not stop rising due to the exaggerated expansionary monetary policies which the world central banks were abusing to deal with the Covid crisis that has not yet reached its peak.
2) The longer the war lasts, not only will we suffer from the previous point, but prices will rise even more as we cannot resort to the Russian economy as we have done in recent years, which offered very competitive prices in terms of energy and natural resources. .
What does this new scenario imply?
To be very brief, if the prices of all products and services do not stop rising because they sell them to us more expensive, plus the intention that the government had and has to raise taxes in various areas to be able to correct the deficit that in recent years has had our country. It means that our ability to earn money and purchasing power is exaggeratedly reduced, forcing practically everyone to have to lower their standard of living to get ahead of this crisis that seems to have no end. The bad news keeps coming from various fronts and the solutions seem to be scarce.
What do we recommend?
Due confidence in Fiat money is clearly being lost, since its value is getting lower, the most suitable alternatives to deal with this situation is to have the fair and necessary exposure to the euro, the dollar, the ruble , etc. Through valuable raw materials such as gold and, on the other hand, cryptocurrencies, since their value, unlike money, rises over time, equaling or even exceeding inflation and tax increases, but let it be clear... Before you make any decision is recommendable that you consult an expert and assess your personal situation in order to adapt the strategy to your personal needs.
A cordial greeting!