FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
Libertex information and reviews
Libertex
91%
FxPro information and reviews
FxPro
90%

The Inflation Monster Strikes. Better One Small Fish Than An Empty Dish


9 September 2022

London Mayor Sadiq Khan says that millions of Britons won’t be able to afford heating or basic food this winter if things remain as they are now. The present state of affairs has no precedents in the past. Price inflation in the UK appears to be over 10% for the first time since 1982. Household utility bills, not to mention industrial spending, are expected to rise steadily over the next two years unless the government provides financial support to the private and industrial sectors.

What is happening in the EU?

European gas prices at the leading European gas hub (TTF Holland) rose by almost 350% year-on-year, while futures contracts for electricity in Germany and France rose by 540% and 790%, respectively! 30-40% of Europe’s gas needs are households. About 80% of household gas demand is for heating, with the rest for hot water and cooking.

Typically, gas demand is higher during the winter gas season, which runs from October to March. But increased demand for gas is also observed this summer. People use energy for air conditioning. In the business sector, the heat wave also increased the energy volume needed to cool equipment.

And these are the July figures for Germany – the rise in prices for the following goods in the EU’s largest economy in July. At the same time, half of Europeans blame their governments and energy companies, not Russia, for increasing energy prices — the Spanish Mundo writes, citing a survey conducted by Euroskopia. The study covers Austria, Germany, Greece, Spain, Italy, the Netherlands, Poland, Portugal, and France.

What is ahead for Europe?

It seems (most independent experts mention this scenario as a basic one) that difficult times are coming. These difficult times come inevitably at the end of the overconsumption cycle. The gap between physical income and spending is growing. And the lack of gas from Russia is only a piece of the trouble. The problems began long before the sanctions. They became evident at the peak of COVID.

Are bonds a savior?

The overall situation is complicated because the stock market has been extremely volatile this year, and many people have seen negative results in their brokerage accounts. This point concerns mainly passive investors, treating shares as bank deposits. Against this background, some long-term European investors tried to invest in a more stable, conservative asset — government bonds.

Pros and cons of bonds

Pros

Cons

Bonds are long-term investments. You cannot pay off bonds until you hold them for a certain period. At the rising inflation time, bonds might look attractive for long-term investing compared to bank deposits. But, of course, this is not an asset that can generate big profits. It’s just about hiding money from the Inflation Monster.

Do you want to invest and earn more than any bonds could bring?

And it doesn’t matter where you are. If you are interested in investments and trading, depending solely on your desire and strategy, feel free to open an account with an international broker.

#source

Share:


Related

The Pound is having tough times
The Pound is having tough times

The Pound Sterling is keeping balance against the USD as much as possible. The current quote for the instrument is 1.0800. The news released yesterday were rather puzzling. The Bank of England announced...

29 Sep 2022

EUR/USD: bears now target 0.9500
EUR/USD: bears now target 0.9500

EUR/USD drops for the seventh straight session and tests 0.9535. Below the 2022 low at 0.9535 comes the 0.9500 region. EUR/USD extends the leg lower to the proximity of 0.9530 earlier on Wednesday...

28 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back in March...

27 Sep 2022

Penny Stocks: What Are They?
Penny Stocks: What Are They?

Locating penny stocks with buy ratings is getting more and more challenging. The markets become less adventurous as interest rates rise. That indicates that penny stocks, which are riskier by definition...

20 Sep 2022

Bitcoin and Ethereum: Inflation Brought Down The Prices
Bitcoin and Ethereum: Inflation Brought Down The Prices

Strong inflation brought down the price of bitcoin yesterday from $22,800 to the $20,000 support level. This morning, the price of Ethereum formed a new seven-day low at the $1550 level...

15 Sep 2022

Cooler USD & Stocks Higher Ahead of CPI
Cooler USD & Stocks Higher Ahead of CPI

USDIndex – Slips (108.00 tested) for a 5th straight day, lifting EUR & GBP. Fed Funds Futures back to 90% chance of 75 bp (third consecutive) hike...

14 Sep 2022


Editors' Picks

HFM information and reviews
HFM
89%
IronFX information and reviews
IronFX
88%
FXCM information and reviews
FXCM
87%
NordFX information and reviews
NordFX
85%
Vantage information and reviews
Vantage
84%
FP Markets information and reviews
FP Markets
81%

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.