Inflation in the US and EU is going through the roof

Inflation in the US and EU is going through the roof

Irina Badmaeva

Inflation in the US and the EU is going thro-ugh the roof – the A-mericans and Europeans have not seen this since the 80s. The cost of gasoline and electricity is especially hard on the pocket. This is the result of anti-Russian sanctions. How long will the West have to save – in the material RIA Novosti.
What do sanctions lead to?
In March, annual inflation in the country accelerated to eight and a half percent, according to the US Department of Labor. In February it was 7.9.
Gasoline has risen in price most of all: more than four dollars per gallon (about four liters). As a result, transportation costs have increased.
Prices for Americans’ favorite fast food have skyrocketed. Not far behind are electricity and rent, which account for about a third of total spending.
It’s all about Russia’s m-ilitary operation in Ukraine, said Joe Biden. “Seventy percent of inflation is due to Putin’s increase in gasoline prices,” he says.
In fact, goods in America have been rising in price since last year, notes The Wall Street Journal. It is more profitable to blame Moscow than your own political course. The publication cites “excessive federal spending and loose monetary policy” as the reason for record inflation.
To overcome the consequences of the coronacrisis, the financial authorities of developed countries have launched a printing press. The US Federal Reserve has flooded the economy with trillions of dollars. At the same time, it maintained a low base rate – close to zero.
“In fact, dollars and eur-os settled with profits in ba-nks and in the hands of in-vestors who invested in se-curities on the stock mark-et. But everything went up: from grain and oil to carrier services,” says Artem Deev, head of the analytical department at AMarkets.
People actively spent the money they received during the pandemic and thereby dispersed prices. The shortage of some goods played a role. First of all, those wh-ere there were not enough microcircuits: gadgets, cars.
The Fed has been insisting for the past year that inflation is short-lived. But in fact, I overslept the moment when it was necessary to restrain growth. In mid-March, for the first time in four years, the regulator raised the rate to 0.25-0.5 percent per annum.
“Most likely, by the end of June it will be one and a half percent. We will have to act aggressively to curb inflation. But it is not certain that this will be possible by mid-summer,” Andrey Loboda, director of external relations at BitRiver, predicts.
The Fed’s sluggishness has already hit Americans’ pockets hard. I had to fork out even more because of anti-Russian sanctions. On March 8, Joe Biden banned the purchase of oil and ot-her energy resources from Russia. It was clear that the decision would not go unnoticed for consumers. And so it happened. Oil quotes immediately rose to $130 per barrel. Next, they began to rewrite the scoreboard at gas stations.
“According to the polls, only six percent blame Putin. The majority – the policy of the American president,” – said the host of the American Fox News channel Sean Hannity.
According to him, in the 15 months of Biden’s rule, “everything goes wrong.” “I can’t name anything that would be implemented correctly. <…> Yes, Putin is to blame for all the troubles. This is a lie. The inhabitants of the United States, fortunately, understand this,” the journalist said.
Rising gasoline is a painful topic for the United States. But the main nightmare for the country is the green energy course promoted by Joe Biden, Sean Hannity is sure.
The sharp decline in the use of oil and gas resulted in rising fuel prices and accelerating inflation. However, it seems that the American president chose to forget about this.
Inflation goes around the world
Washington is putting pressure on the EU to give up hydrocarbons from Russia there as well. But the Europeans are in no hurry. Some states “depend on Russian oil and gas by 100 percent,” said the head of the European Commis-sion, Ursula von der Leyen.
By the way, the Americans once removed Venezuelan and Iranian black gold from the market with the help of sanctions.
At the same time, prices in the Old World are also going through the roof. In 19 countries, inflation reached 7.5 percent in March, Eurostat calculated. Most of all – in Lithuania. There, the figure was 15.6. In Germany – 7.3: this is the highest level in 40 years. Then oil prices soared due to the consequences of the Iran-Iraq war.
Most of all last month energy carriers have risen in price in Europe. In second place are food, alcohol and tobacco. The third is services.
“The rise in prices will continue. The gap in production and logistics chains, the shortage of raw materials and high world prices will contribute to this,” Artem Deev believes.
In Germany, inflation during the year will be seven to eight percent, said Karl von Rohr, vice president of Deutsche Bank. And it will exceed ten in the event of an embargo on Russian energy resources, the bank predicts.
“The loop of stagflation (high inflation and slowdown in economic growth) is increasingly tightening the EU economy. There are no prerequisites for a cha-nge in the situation. The lo-w GDP growth of Germany and France sets a negative trend for all countries of W-estern Europe. The region i-s at a dangerous point. Ind-ustry and industries with a high added cost is under pr-essure. In addition, the pri-nting press of the European Central Bank does not turn off,” explains Loboda.
Inflation is hitting records in the UK as well. In March, in annual terms, it was seven percent – the highest since 1992. The economy has been hit the hardest by rising electricity prices. Bills for gas and electricity for the British rose by 54 percent – from 1227 to 1971 pounds (1660 and 2570 dollars respectively). The next increase is expected in October.
Electricity can rise in price by 115-130 percent in a year.
In Russia, annual inflation accelerated to 16.69 percent in March due to world prices. “Plus the devaluation of the ruble. The rest is an increase in the costs of manufacturers who depend on foreign components. Imported goods have risen in price, which after a while will be in short supply,” says Mikhail Kogan, head of the analytical research department at the Higher School of Financial Management.
Several critical domestic industries are highly dependent on imported goods. The share of foreign value added exceeds 50 percent. Basically, these are imports from those countries that have joined the anti-Russian sanctions. Finding an alternative is hard. And it will take years to replace the drop-down components on your own.
In the second and beginning of the third quarter, Russia “will enter a period of structural transformation and a search for new business models,” Central Bank head Elvira Nabiullina said in the State Duma.
The economy cannot li-ve on stocks forever. Ther-efore, inflation will accelerate further. Already in May, prices are expected to rise by 20 percent.

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