In developed industrial countries, inflation remains very low. But in developing countries, on the contrary, inflation is showing steady growth. Therefore, gold in these countries is a protection against depreciation of savings.
Gold is the best protection against the hidden alienation of property, that is, from inflation, which imperceptibly and gradually reduces the purchasing power of paper money. In simple words, we can say that when the money supply grows, but there are no goods and services, in this case the purchasing power of money decreases. This is how inflation arises.
If inflation exceeds interest rates on deposits with banks, then the real welfare of citizens in the accounts is reduced every day. But at the same time, the debt burden of borrowers, primarily the state, is reduced. This is one of the reasons why the financial authorities of some countries are interested in rising inflation.
For many years now, official inflation in industrialized countries has been low. For example, in the USA this indicator is 2.3% per year. The influx of money into the financial sector of the country led to an increase in stock quotes and real estate prices, but consumer prices remained almost unchanged. Even if inflation statistics are deliberately adjusted for the better, it still remains low in many Western countries. And there are several reasons for this.
In order for prices to rise, a shortage of consumer goods is necessary. Now any product can be found without problems. Markets in many sectors of the economy are saturated with any product. The openness of prices on the Internet and the great competition in retail trade create the conditions for the appearance of the lowest possible prices. Globalization plays an important role.
The reverse situation is observed in developing countries. They record a steady increase in inflation due to the shortage of many goods, and the financial authorities of these countries resort to the printing press for a short-term solution to problems. Basically, such countries depend on imports of foreign goods: medicines and food. Under these conditions, the purchasing power of national currencies is declining, and the price of gold, on the contrary, is starting to rise.
Below is a list of countries with high inflation:
Venezuela - 3.9113.80%
Zimbabwe - 521.20%
South Sudan - 170.50%
Sudan - 57.70%
Argentina - 51.40%
Liberia - 30.90%
Iran - 27.80%
Those who own gold in these countries will be able to protect their welfare from total loss. But if people save money in conditions of galloping inflation, then they are doomed to bankruptcy.