Everyone remembers the March 2020 images of overflowing shopping trolleys, with toilet paper, rice and tin cans fighting for every available cubic centimetre of space. We were all buying mountains of preserved goods out of an intrinsic fear to be well prepared for the pandemic.
After the worst seems to be over, we now have to deal with the impact of large-scale supply shortages, coupled with the unbridled money printing of national banks all around the world. Cumulatively, this is known as inflation; for the layperson, though, it simply means fewer goods in the shopping trolley and reduced purchasing power of their savings. What you can do to escape inflation before it is too late is explained in the following article.
The crux with energy and commodities
For more than a decade, we have lived on an island of the blessed with barely perceptible inflation. But those days are over once and for all, as prices in Europe and around the world continue to rise steadily, with no end in sight. In May, for example, the inflation rate in Europe averaged 8.1% compared to the same month last year, once again exceeding the European Central Bank's target of 2% by more than 6%.
The main price drivers were once again higher energy prices. While they led to a reduction in overall inflation in the last two years due to the pandemic, energy prices have risen by a staggering 300%. Particularly the prices for fuel and heating oil have exploded in recent weeks. In many places, drivers had to pay a sum exceeding 150 euros for a full single tank of petrol, equating to 2.50 Euro for a litre of Super at some freeway gas stations.
On the other hand, rising commodity prices have also led to a significant increase in producer prices. Copper, steel and timber are once again arousing investor appetite after a fashion not witnessed for a long time. For many economists, the reason for this rally is the temporary shortage of raw materials: After many production facilities had to close due to the pandemic or at least had to cut back and the demand for services and trade goods collapsed, people are now building, shopping and producing as much as they can afford. Commodity traders simply cannot keep up with the surge in orders, and when they do, the markets are already sold out.
Home builders, commuters, but also every consumer who buys groceries in the supermarket notices it in his or her own wallet: what one could easily afford years ago is increasingly becoming an effort, and if there is not enough money available, then fewer and fewer products find their way into the shopping trolley. Many economic researchers proclaim a "subjective inflation", which –– if you ask randomly selected people on the street –– is now felt by everyone, regardless of social class.
Demonetization par excellence
A recently published survey by the German Savings Banks Association shows that the current biggest concern of savers is rising inflation. Especially the over-60s view the inflation trend critically; but also in the Gen Z group, 61% of the respondents view the development with great concern. And this is justified, because the hard-earned assets in the bank account are becoming worth less and less.
It gets worse. Not only inflation is contributing to this, but also the now ubiquitous negative interest rates on savings deposits. This means that you have to pay penalty interest on your current or savings account above a certain amount of money, instead of the bank paying you positive interest for handing over your money. In the truest sense of the word, it's a topsy-turvy world.
Due to a lack of alternatives, the majority of Europeans still deposit their money in the bank. Some, however, do invest in shares, but only because their bank recommends it. Yet new, lucrative asset classes with which one can cheat inflation and negative interest rates are never advertised there.
New forms of investment, such as saving with cryptocurrencies, can not be found in all those pretty folders piling up in bank foyers. But why is this the case? The answer is relatively simple: the bank cannot introduce fees for these products and consequently cannot earn anything from it, because traditional banking services are not required for investment products in the crypto sector –– goodbye account management fees, horrendous bank charges and custody fees.
The security of your house bank, but without the horrendous fees
Investment forms with cryptocurrencies are becoming increasingly popular. There are two main reasons for this: Firstly, they often offer returns banks used to hand out decades ago, and secondly, most companies that handle cryptocurrencies use sophisticated security technology that puts many traditional banks to shame.
At Cake DeFi, we are pioneers when it comes to keeping the client funds that have been entrusted to us as safe as possible. As a result, we not only use the latest encryption algorithms, coupled with anti-social engineering measures, but we also solely use transfer methods based on a sophisticated multi-signature method. You can't invest your money in crypto any safer than with Cake DeFi!
Customers who invest their cryptocurrencies in our Lending product –– a kind of crypto savings account –– also enjoy guaranteed returns of 6.5%, which are insured by our institutional partners. However, most of our client funds are held in "cold storage" anyway and are not connected to the internet. Therefore, even the most sophisticated hackers have no chance of getting anywhere near these funds.
Our leading security technology is also reflected in our excellent rating on Trustpilot. This not only puts the fear of God into our competitors, but also shows that customers simply love our secure service. Here you can find some customer reviews:
It’s just natural that everyone wants to prevent their assets from melting away and tries to identify investment projects that offer the best returns. However, one should never lose sight of the security aspect. When it comes to your money, then trust only the best!
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