PR92599

STOCKHOLM, Oct. 28, 2021 /PRNewswire=KYODO JBN/ --

GSB Gold Standard Pay, Sweden: Inflation rates are rising around the world,

including in the Federal Republic of Germany, where the rate next month will

probably be a whopping five percent. In view of this, many German citizens are

worried that prices could continue to rise at this pace.

In this context, Josip Heit from GSB Gold Standard Pay in Sweden, comments on

this issue and its far-reaching consequences.

Josip Heit explains the phenomenon of inflation as follows, "Consumers are

simply passively affected by inflation, prices rise and have to be paid by the

"end consumers". For those who live on wages or social benefits are "price

takers". So doing without is the order of the day, either by turning down the

heating or by saving on other living expenses. Inflation means for dependent

employees or the unemployed: they become a bit poorer, which hits those who

have little money anyway especially hard."

Companies in the manufacturing sector are currently suffering massively from

rising prices for raw materials and intermediate products, i.e. from rising

costs in the purchase of production and operating resources. This is reflected

in the so-called producer price inflation, i.e. in the prices settled between

companies. It was 14 per cent in September.

In this context, higher costs hurt customers, threatening what economists call

"demand destruction". In addition, companies have to consider whether the

competitive situation allows price increases at all. If companies do not raise

their prices, they lose profit.

For years, governments around the world have been absorbing the crises, which

occur at ever shorter intervals, with new national debts. As the EU Commission

recently announced, the national debt of the Eurozone increased from 84 to

almost 100 per cent of economic output in 2020 alone - and it continues to

rise, with new debt recently amounting to seven per cent of economic output.

This flood of credit can be financed because of the low interest rates provided

by the central banks, whereby the debts of states such as Greece, Italy,

Portugal, Romania and Bulgaria are being absorbed with even more debt; in this

context, the burden must ultimately be borne primarily by the German taxpayer.

However, if inflation now remains permanently high, the central banks could

find themselves forced to raise interest rates. "The increased inflation rates

have rekindled the discussion about a faster exit of central banks from the

extremely expansive monetary policy", in the UK, for example, key interest

rates will probably be raised as early as the beginning of November 2021.

Sharp increases in interest rates "could put a strain on the already severely

strained budgets of many states and make it virtually impossible to reduce debt

to a sustainable level" - which, in reverse, would mean Germany and its

citizens paying the debt for crisis countries.

Josip Heit, who recently launched his own website https://www.josipheit.com,

recalls the great inflation of 1923 and states: "Foreign exchange became the

reserve currency, homeowners became beggars, city dwellers fled to the

countryside, farmers were plundered, now almost a century after the devastating

inflation, fear is running rampant, because the trauma of the inflationary

period did not only stem from the loss of wealth.

The disappearance of money entailed a humiliating loss of freedom. Deep-rooted

was the general bitterness because not only the state but also the social order

was shaken - here and precisely here the economic leaders and politicians are

challenged, because mankind today is much better informed and would hardly

allow such a trauma, which is why a new inflation could at the same time mean

the end of money as mankind knows it...!"

Against this background, one must ultimately never forget what the US economist

Milton Friedman already said: "Inflation is taxation without legislation".

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Presse Kontakt:

GSB Gold Standard Pay KB

Frau Svenson

Phone: +46 8-655-2626

Fax:     +46 8-5051-6899

Video - https://www.youtube.com/watch?v=VGdhFvyiYy0

Photo - https://mma.prnewswire.com/media/1670630/GSB_Josip_Heit.jpg

Source: GSB Gold Standard Pay KB (Sweden)