The current inflation and associated price increases are a direct result of the European Central Bank’s years of money expansion. According to a recent study by the Sparkassen, in combination with exploding energy and food prices, most Germans are struggling to pay their bills. The Sparkassen are warning of the severe consequences that inflation-related price increases will have on most Germans. They found that currently, around 60% of private households in Germany are spending more than their entire monthly income on everyday expenses.
Helmut Schleweis, the President of the German Savings Banks Association, recently stated that households with a net income of less than 3,600 euros currently have no money left at the end of the month and can only balance financial differences through savings. Schleweis appealed to the German government to think particularly about these income groups in the planned relief packages. He believes that more sustainable investment in energy efficiency is urgently needed, especially for households that have previously managed well on their own.
Schleweis also warns that the increasingly empty bank accounts will affect consumer behavior and, therefore, the economy. He expects a significant decline, especially in the hospitality, retail, and service industries. The Sparkassen have also evaluated the consequences of exploding costs for the middle class of their approximately 300,000 corporate customers. The conclusion is that all German companies are now affected by massive increases in energy prices.
Schleweis believes that the most efficient means would be for the state to limit energy prices. Only in this way can a wave of insolvencies possibly be prevented. Currently, the chemical industry, mechanical engineering, construction, and the automotive industry are suffering from high energy prices. The inflation will undoubtedly change the purchasing and consumption behavior of millions of Germans shortly, and thus, more and more small and medium-sized enterprises will be threatened with insolvency.
Meanwhile, voices on the internet are increasingly calling out the broken fiat money system and advocating for Bitcoin as a fair, uncensored, and free currency. According to these maximalists, Bitcoin, which is limited to 21 million and thus represents a deflationary currency, is the only solution that will protect the population from impoverishment and secure prosperity in the long term.
