War and Corona to distract people from politicians' wrong decisions

The value of money is eroding. Zero interest is destroying the services of general interest for millions of Germans. But so far there has been no outcry from those affected.

Inflation rises and rises. It is the most merciless and probably also the most anti-social tax imaginable. And it is now also threatening the economic foundations of the middle class, long after the poor section of the population has been in serious trouble.

In conjunction with meager or disappeared interest rates, price inflation not only makes daily shopping, eating, clothing, heating, refueling or lighting more expensive. It also washes away the services of general interest for millions of people. Because the capital stocks of life insurance companies or private pension funds are also dwindling. 7.4 percent annual currency depreciation shrinks the savings by half within ten years with zero interest. However, there are doubts as to whether the official inflation rate reflects the development correctly or whether the actual inflation rate is even higher.

Against this background, it is surprising how (superficially) calm the Germans are in accepting their rapid expropriation. That so far there has been no outcry, no demonstrations against it.

Chancellor Scholz, who, as a former finance minister, is well informed about the upcoming devastation in our country's prosperity, largely ignores the problem. Elsewhere, the war in Ukraine has recently been identified as the trigger for the upward trend in prices.

But the argument is goes beyond that. When the dairy industry announced price jumps for dairy products of 20 to 25 percent in May, they pointed out that these prices had been negotiated months ago, long before the war broke out. The next step, which will then also be affected by the war with all its consequences, is still pending.

Consequence of political decisions
In truth, the broad surge in inflation has a bundle of politically engineered and sometimes even intentional causes. With the energy transition, cheap energy sources were switched off and replaced by more expensive, less reliable ones. This is driving prices across the product range, especially food.

Corona is also said to have caused supply shortages worldwide. But it must be said here that it was ultimately the lockdown measures, not the virus itself, that caused these problems. China is showing how an anti-Covid strategy gone haywire can lead to disaster. The fact that Minister of Health Lauterbach is currently showing such great interest in at least delaying the scientific review of the corona measures suggests that he himself has long known that many of the restrictions are nonsensical.

Before all of this, however, monetary policy opened the door to the inflationary disaster. Through unbridled "money printing", the ECB in particular has inflated the money supply far beyond the reasonable level in order to save bankrupt states, banks or companies. Now this money is flooding the markets, devaluing people's assets and incomes. Because while other currency areas are slowly raising their interest rates again in order to take money out of the market, the ECB does not dare to do so: countries like Italy and France have borrowed so much with the cheap ECB money that even moderate interest rates are bringing them to their knees and thus bring the euro experiment to an end.

Admitting these connections would be tantamount to a political disclosure oath. So those responsible simply ignore the issue of inflation or they use every new crisis as a scapegoat to distract from their own wrong path: First it was Corona, now the Ukraine war was added as an excuse. However, a solution to this (like any other) problem is only conceivable if at least the causes are honestly named. The public must force politicians to do this.

Source: Preußische Allgemeine Zeitung