The four seasons of the Kondratieff cycle
17. May 2024
- Stability and security. Made in Switzerland.
- Stability and security. Made in Switzerland.
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Inflation is the general increase in the price levels of an economic area over a certain period of time. The national consumer price index (CPI) is used to measure this in Switzerland and elsewhere. If this index rises, fewer goods or services can be bought with the same amount of money than before (e.g. 100 CHF). As a result, the purchasing power of money decreases with inflation.
This affects virtually everyone, but savers who leave their money in the bank are most affected.
Please use our inflation calculator and see how much you stand to lose through inflation. You can find out how you can protect your assets below.
Source: Federal Reserve Bank Of St. Louis, EOD Historical Data
The equivalent value of a currency unit remains the same if money supply and economic growth move in lockstep. A faster increase in the money supply will sooner or later lead to inflation.
Central banks around the world have expanded the money supply extremely since the beginning of 2020 due to the Covid-19 pandemic. At the end of 2020, for example, there were around 25 percent more US dollars than at the beginning of the year. The more units of a national currency there are, the less each unit is worth. Purchasing power is diluted. At the same time, supply bottlenecks arose worldwide due to the Covid pandemic. Many goods became scarce and therefore more expensive, causing high costs and slowing economic growth. This created the perfect environment for the rapid rise in inflation in the US and Europe in 2021.
The most common measure is the annual percentage change in the consumer price index. The CPI measures inflation based on the price development of a basket of goods, which includes the most important consumer goods, rent, petrol and other essential household expenses.
The weighting of the basket of goods is updated annually. Prices for asset classes such as real estate, precious metals or stocks are not included in the basket. If these so-called asset prices were included in the calculation, we would have had a much higher inflation rate in recent years
The current basket of goods of the Federal Statistical Office can be viewed under National Consumer Price Index.
In an inflationary economic environment, saving in a bank account that does not generate interest is not worthwhile. On the contrary: Due to the rising prices of everyday goods, your savings are constantly losing purchasing power. Retirement savings that are held in a bank account are also affected. In the following short video, we explain why maintaining purchasing power is very important for your assets.
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More InformationUse our inflation calculator to see how much you are directly affected by inflation and how much your money loses purchasing power over time in a bank account.
The online calculator aims to show a hypothetical future course of the purchasing power deterioration of each currency. The value of money is assumed to be the purchasing power of money. The loss in value due to inflation therefore results from the loss of purchasing power of money over the period under consideration. On the basis of the parameters entered, the inflation calculator shows how the value of money is impacted over the selected period and states for each year the value of today’s purchasing power as well as the assumed future loss of value in relation to the beginning of that period.
The assumed future inflation rates and return expectations of the RealUnit may differ from the values actually recorded in the future. The results of the calculations are for information purposes only and do not constitute an offer or a solicitation of an offer. There is no guarantee for the currency, accuracy and completeness of the results. RealUnit Schweiz AG assumes no liability in connection with the calculation results. Investment decisions should be made after a thorough reading of the current prospectus, which can be found on the Downloads page.
The focus should be on scarce, real assets, as they can keep up with price increases.
The following are considered useful investments in this context:
*stored outside the banking system in Switzerland
Balance as of 30.09.2024
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RealUnit Schweiz AG is a listed investment company that invests in a broadly diversified range of real assets. We pursue the goal of protecting the assets entrusted to us from crises and loss of purchasing power in the best possible way.
