In the European Union, which consists of 27 countries, the inflation rate rose even more. Here, an average value of 3.2% per annum was reached.
Particularly interesting is the fact that twelve months ago, significantly lower values ​​were recorded both in the Eurozone (-0.2% per annum) and in the European Union (+ 0.4% per annum). Moreover, the August inflation rates in various countries fluctuated in a relatively wide range from 0.4% (Malta) to 5% (Estonia, Lithuania, Poland).
According to Eurostat, the main reason for the acceleration in inflation was energy, followed by manufactured goods (excluding energy), services and food (including alcohol and tobacco).
The rise in inflation in the Eurozone to a new 10-year high did not come as a big surprise. After all, other countries have also recorded multi-year highs in recent months. While Germany last saw higher inflation nearly 27 years ago, Americans had to come to terms with a 5.4% loss in the dollar's purchasing power in June and July, the highest in 13 years.
Comparatively low inflation rates currently prevail in two important Asian economies. For example, for China, a value of 0.8% was recorded (August), and for Japan - even minus 0.3% (July).
While the precious metal gold is considered a proven inflation hedge in the financial world, it hasn't benefited from the acceleration in inflation this year. Various negative factors in recent months have outweighed the need to protect worried investors betting on gold
On the one hand, nowadays investors have more confidence in another tangible asset - shares. Strong buying interest in the DAX and Dow Jones led to new all-time highs in August this year. At the same time, most investors seem to believe the assessments of various central bankers and economic institutions, which view the current relatively high phase of inflation as a temporary phenomenon. The cutbacks in bond purchases announced by the Fed and the ECB by the end of 2021 are also cause for concern.
The European continent currently buys 80 billion euros of securities every month, and the Fed's buying program is as much as $ 120 billion. To buy such securities again to become profitable for private investors, their yield must at least exceed the inflation rate. This can only be successful if inflation falls and interest rates rise at the same time.
Even countries with the best credit ratings, such as Germany or the United States, will inevitably face problems if their financing costs rise to the current inflation rate of 3.9% or 5.3%. That is why - despite all the prophecies about doom - gold should be trusted more, not less, as a proven means of protecting capital from inflation.