We may not be hearing quite as much about inflation at the moment, but that doesn’t mean it’s gone anywhere. It may have started to come down in the United States, but it still remains at near record high levels.
The rate of 7.7% in October is still the highest figure we’ve seen prior to 2022 since 1982.
Now that the Federal Reserve has decided to cut rates, we’ve seen four consecutive 0. 75 percentage point hikes. This is the fastest pace of increase in 35 years, and more increases are almost actually expected in the next 12 months.
So while inflation looks like it might be starting to turn a corner in the US, in many other countries around the world it continues its relentless march upwards.
Many economies have been hit by emerging costs as a result of the pandemic, but there are also a small number of notable outliers that have managed to keep their inflation rates low.
So where does the U. S. have compatibility in the grand scheme of things?
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While we’re not very satisfied with peak inflation in the single to double digits, we’re doing quite well compared to the hardest-hit countries. It is clear that most of the countries with the worst inflation rates in the world are experiencing severe economic turbulence.
These peak inflation rates don’t occur in fully functioning economies, and many countries end up reverting to the U. S. dollar if their own currency loses price too quickly. You can also get them to abandon your coin altogether, either by creating a new one or sticking to it. the dollar permanently.
Either way, it’s not good news for the other people who live there.
The African country has faced high inflation rates for decades. From figures of between 20 and 50% in the 1990s, to more than 500% in the early 200s, and then to become so high that they are practically immeasurable after 2008.
They experienced extreme hyperinflation during this time, with the estimated peak of November 2008 a rate of 79,600,000,000% per month.
Given this history, the current inflation rate doesn’t look too bad. It is also declining, with the Zimbabwe Treasury forecasting that inflation could fall to double digits in 2023.
There’s a financial crisis going on in Lebanon and the currency appears to be collapsing as a result. The financial sector in the country has been experiencing massive losses, but the World Bank has stated that these are too large to be bailed out.
The current hole in the finances stands at $72 billion, which is three times higher than Lebanon’s entire GDP.
An estimated three-quarters of the country’s population has fallen into poverty as a result of these criticisms, and it doesn’t look like it’s going to end anytime soon. Lebanon’s GDP fell by 58% between 2019 and 2021, ending 15 years of economic growth.
The World Bank is working on a way out of the situation, but it’s not likely to be straightforward or quick.
Like Zimbabwe, Venezuela has experienced hyperinflation in recent years. In April of 2019, the International Monetary Fund estimated that the headline rate in the country would hit 10,000,000% by the end of the year, though official figures have been hard to come by.
The country has been experiencing an economic and political crisis since 2016, even though peak inflation has been common in the country since the early 1980s.
There have been some signs of a timid economic recovery after many years of cuts in public spending and budget cuts that have helped the country’s bottom line.
In addition to these, there are many other countries experiencing huge inflation rates as well. Syria (+139%), Sudan, (+103%), Argentina (+88%), Turkey (+85.51%) and Sri Lanka (+66%) are some examples with a further 37 countries currently running inflation rates above 15%.
At the other end of the spectrum, some countries have managed to keep their inflation rates remarkably low. Unsurprisingly, however, this list is much shorter than those with record-breaking inflation rates.
A notable trend is that almost all of the countries with the lowest inflation rates are in Asia. Much of this can be attributed to other intake behaviors in this part of the world. One example is that Asian cultures consume much more rice than Western countries, with a much smaller amount of wheat products in their diet.
The price of wheat was up around 17% in the first half of 2022 compared to 8% for rice. There are other examples of prices coming down in foods such as pork, for reasons unrelated to the Covid19 pandemic.
And of course, the other important thing is that life has returned to normal in many countries in Asia. China is still enforcing a zero-Covid approach, Hong Kong is similarly restrictive, and Malaysia has also been slow to transition to mainstreaming. That demand has returned to pre-pandemic levels, as it has in other parts of the world.
As a result, many countries in the region are experiencing low levels of inflation. Some examples include Macau (+1.02%), Hong Kong (+1.8%), mainland China (+2.1%), Oman (+2.39%) and Taiwan (+2.72%).
It remains to be seen whether those countries will keep those rates low or simply delay the inevitable.
So, in general, the U. S. numbers are so bad. Of course, costs are coming up more than business as usual and we all have to tighten our belts, but we can be grateful to live in a country where 8 or 9% inflation is widespread inflation. high time.
Among the G20, the US sits around the middle of the pack.
China 2. 1%
Saudi Arabia 3. 0%
Switzerland 3.0%
Japan 3.7%
South Korea 5. 7%
Indonesia 5. 7%
France 6. 2%
Brazil 6. 5%
Singapore 6. 7%
India 6.8%
Canada 6. 9%
Australia 7. 3%
Spain 7. 3%
South Africa 7. 6%
United States 7. 7%
Mexico 8. 4%
Germany 10. 4%
United Kingdom 11. 1%
Italy 11. 8%
Russia 12. 6%
Netherlands 14.3%
Turkey 85. 51%
Argentina 88%
Inflation is a hugely damaging force that can see household wealth evaporate overnight, and it creates significant challenges for people living in countries that can experience hyperinflation.
Regardless of the extent of inflation, there is only one way to properly protect yourself from it. It’s about keeping your capital in long-term expansion assets. Bank money loses price every year, even in solid countries like the United States.
Many classic investment bureaucracies, such as real estate and the stock market, will grow faster than the rate of inflation in the long run. This means that the cash invested in those assets will increase their cost above the rate of value accumulation. which will protect your wealth in periods of peak inflation.
The challenge is that those assets have their own drawbacks. The assets are expensive and illiquid, with maximum taxes and fees related to buying, selling, and simply owning them.
Stock markets, on the other hand, can be very volatile. As noted this year, stocks can fall especially in the short term, and it can be tricky for investors to stick to a long-term plan as they face significant losses in their portfolios. .
To help investors who don’t know what to do in this situation, we’ve created the Inflation Protection Kit. It’s an investment kit that uses the power of AI to invest in assets that have historically been a hedge against inflation.
Each week, our AI predicts which assets in the Kit universe will perform the most productively based on risk and then rebalances the portfolio to create the optimal mix.
The assets across the ruleset are Treasury Inflation-Protected Securities (TIPS), gold and other valuable metals, as well as a basket of commodities such as oil and wheat. These are all assets that have a tendency to keep their price in the opposite of emerging prices.
For investors who don’t want to enjoy the volatility of the stock market, but still want to keep their budget in line with inflation, this is a great option to consider.
Download Q. ai today for AI-powered investment strategies.