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Photo: Peter Steffen / dpa
Do you feel like everything is getting more expensive?
You are not mistaken.
The prices are rising.
Fruit, vegetables, gasoline, clothing, rents, furniture, travel, dining out: In July, inflation was 3.8 percent.
Bundesbank boss Jens Weidmann expects up to five percent soon.
The last time it was comparable was 28 years ago.
It will be scarce for people with a low or middle income.
Statistically, anyone who barely managed to get by with their money in 2020 is already broke one day before the end of the month.
I am amazed at the sausage with which those responsible dismiss the topic. Federal Minister of Economics Peter Altmaier considers it a temporary phenomenon. Christine Lagarde, head of the European Central Bank, cares more about the global climate than about stable prices in Germany. In Europe we are considered neurotics anyway, who should "finally relax a bit," as the British historian Frederick Taylor recently explained in SPIEGEL.
It is true that part of the inflation is due to special effects, such as VAT, which was temporarily reduced due to Corona. But it is also true that real inflation has long been higher than the statistics show. Houses and apartments they used themselves, for example, are neglected by the ECB's inflation rate. The prices for real estate have risen dramatically in recent years.
Have you ever wondered how your parents could afford a brand new VW Golf when they were your age when you only drove a used one? The answer: In 1974 the first VW Golf with basic equipment cost the equivalent of around 4100 euros. According to official inflation, around 200 percent since 1974, that would mean a good 12,000 euros. For this amount you don't get a Golf these days, just a Dacia Duster from Romania. A new Golf cost you at least 20,000 euros, almost 400 percent more than in 1974.
400 instead of 200 percent - the statisticians explain this difference between real price increases and official inflation by the fact that a new VW Golf is not so easy to compare with an old one; it is bigger, faster, more modern, and recently even with a digital display.
That is why they take the better equipment out of inflation.
This trick is called the "hedonic method": Adjusted for inflation, the Golf becomes the Dacia.
It may soon be enough to just take a transport bike with an auxiliary motor.
High inflation rates are dangerous.
They eat up purchasing power and savings, lead to old-age poverty, and poison the economy.
There is no need to panic, but I wish the issue was taken more seriously in politics than it is now.