High inflation surprises analysts and central bankers in the Czech Republic, Europe and the United States. At the same time, central banks have always sought to maintain some inflation rates, for example in the case of the Czech National Bank (CNB) it is 2%.
Central bankers believe that a certain rate of inflation – relatively low – is good for the economy. However, this goes against the way consumers perceive it. They are watching what inflation is doing with their savings, which they are increasingly turning away from.
At a time when consumers feel that inflation is getting out of control, they can, paradoxically, begin to act in a way that fuels higher prices. as Brian Wallheimer v Chicago booth reviewThis disparity was seen at a time when the United States was reporting 5% inflation.
“Consumers, who are actually inflation-driven, were unaffected by the news, because they were clearly already working knowing that prices are rising fast and they keep going up,” he wrote.
“Homeowners embarked on renovations knowing that lumber prices had historically been high. People who cook at home felt the impact on food prices. New and used car buyers have seen prices rise due to a lack of chips.”
How do you defend yourself?
But what should consumers do if they want to defend themselves against inflation, rather than fuel it with their own behaviour? According to Natland Group economist Petr Bartona, we now live in a time that offers many opportunities.
“The economy is going through big changes now. Big investments are needed for all of them, and there is no single reason why ordinary savers should not contribute to these investments, and consequently to the return on these changes, even though they feel they do not understand the investment,” he said when I asked Novink.
“Investment today can be done indirectly, for example through various investment funds that understand investments but do not have capital. People have free money, but they do not have an overview of where the projects are. Then it is possible for the two parties to come together and be beneficial for both sides.”
According to Barton, people used to insure against inflation through investments in the past, but did not know it. “They saved money in a savings account and did not have to worry any more. Then the free capital was used by the financial institution, which had a better use of the money. The income from the savings account was obtained only because the bank invested the money. Today, when the bank does not provide People have anything even in a savings account, there is nothing easier than to do the same as before, only through a specialist. ”
Don’t jump to the premiere
But the economist also urges caution. “The money in the bank is insured, not in mutual funds. At least not from the state. But you can insure yourself not to jump on the first high-return offer. Instead of promising the future, today’s saver should look to the past, especially the reputation of such a fund.”
It is necessary to monitor how long the fund has operated, who manages it and what it has already achieved. “Then what he invests in. Are his investments under management control so that he can solve any problems in them? Or is the only solution for such a fund to withdraw from the investment, thus only confirming a certain level of loss?”
“It is not as difficult as actual direct investment and then constant monitoring of how investment is developing. And the world of simple returns will not return in the foreseeable future, while inflation is now and it will swallow up everyone who does not insure himself against it with any income.”
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