MintDice Blog Post Image

Inflation Around the World: Is Russia Exempt?

Have you headed to the gas pump lately? If so you’ve likely felt stumped as you watched the price climb continually to a point far beyond what you planned to pay.

Across the United States, citizens are grumbling as inflation reaches a 40-year high, causing many people to be unable to afford their basic bills. But America isn’t the only one struggling, as the world pegged currency, the inflation troubles America is experiencing are quickly spreading throughout Europe and South America.

But what about Russia? Shouldn’t they have massive amounts of inflation because their economy was stifled when the rest of the world stopped trade in February 2022? Actually, the exact opposite is happening, and it is baffling economists around the world.

Read on to find out more about inflation in the United States and around the world and what you can do to weather the coming bear market.

Markus Winkler  32te X Yhzp Y Unsplash(1)

Inflation in the United States

Inflation in the United States is currently being reported at above 8%, which as we all know, the United States routinely under-reports, meaning the actual number is probably nearing 20%. People everywhere are complaining they can’t afford their bills, but really, the citizens brought it on themselves.

In 2020 during the global pandemic, citizens kept asking for economic relief. It came in the form of stalled rent payments, stimulus checks, and student loan pauses. As a result, the government printed 1/5th of US dollars in circulation in the last year. This has caused wild inflation that a simple interest rate hike, planned for the month of June, isn’t going to fix.

What will (possibly) fix the United States economy is if all COVID policies were removed, meaning everyone goes back to paying for their student loans. Additionally, interest rate hikes must be increased. This will lower the available money supply, which will, in turn, stop some of the out-of-control inflation.

While this sucks for those who were hoping for student loan forgiveness, the extra printed money along with the extra spending money Americans have been given (in place of paying their loans) is wrecking the economy. And before you argue that some people are still paying you should know that in a recent survey over 99% of Americans have stopped paying their student loans.

The minute this charge comes back on people’s monthly debt sheets, likely the problem with empty jobs will ease as well, as some people will need a second job to keep up with payments. This will also curb much of the current over-abundant spending which is increasing the prices of goods and services.

But because the US is the pegged world currency, the problems go far beyond the US borders.

Inflation in Europe

European inflation is just as bad as American inflation, if not worse. Currently, countries like the Netherlands are reporting 10% inflation. Although their economists tend to be more honest than US policymakers, there is still a chance that they are underreporting, meaning their inflation is likely the same as the US.

But unlike America, many European countries have very little they can do to ease inflation. Sure, they can raise the interest rate, but that’s about it. Most European governments are already tight on cash. Not only that, but European people can’t deal with inflation the same way Americans can.

In America, if you need more money, you go and get another job. At the tax rates offered in America, your second job can bring in a much-needed $1,000 extra dollars a month. In Europe, namely the Netherlands, a second job is automatically taxed at a high rate, sometimes 50%. Meaning you would only take home half of what you made. Not to mention that night jobs, like waiting tables, that most Americans turn towards in times of trouble, are paid at a flat rate in Europe and not by tips.

This means that if a Dutch national gets a second job waiting tables to make ends meet, they are typically paid around 12 euros an hour. Even if they work 20 hours a week (4 hours a night for 5 nights) they only get 240 euros a week before the government comes in and takes half. This leaves them with only 120 extra euros a week, which at that point, it doesn’t seem worth it to work an extra job.

Therefore this inflation has led European families everywhere to fall into hardship. What was once the middle class is now lower class as prices in the grocery stores nearly double. Cities like Paris and Berlin, which were once popular weekend destinations for Europeans, report that tourism still hasn’t bounced back since covid as many Europeans are feeling the pinch with inflation and have to cut out their weekend trips.

Things in Europe aren’t supposed to get better. No, they’re supposed to get worse, as energy shortages begin to hit. Without Russian energy, many homes may go without heating this winter. Speaking of Russia, how are they holding up?

Tengyart Uqj to Hlk S Yc Unsplash

Inflation in Russia

Actually, Russia has the most stable currency in the world right now. Their currency, the Ruble, is more stable than the US dollar (obviously), the British Pound, and the Japanese Yen. But how is this possible?

Well, when Russia was cut off from the rest of the world, many citizens rushed the banks, fearing an economic collapse. To stop this, the Russian government switched back to the gold standard. Historically, the gold standard has kept currencies much more stable.

Then, even though most countries are not buying goods from Russia, some countries don’t have a choice. And when they come knocking on Russia’s door, Russia insists they pay in their currency, the Russian Ruble. This has led to many foreign governments buying their currency in order to get the supplies they need.

Additionally, the Russian government stopped paying out foreign dividends this year. Now, if you aren’t a Russian investor, you can’t get dividends from Russia, and historically, even American investors would flock to Russian oil stocks. This has kept millions of dollars that used to leave Russia, within it the borders.

But, take all this with a grain of salt, because Russia has not been known for its honesty. In fact, it’s been mostly dishonest since World War II. While they may say their currency is the most stable, there is no way to verify what is actually going on in Russia at the moment.

In the meantime, if you are scared about inflation, you only have a couple of options. You can invest in gold or Bitcoin. Either will likely weather the coming bear market. Besides that, it might be time to get a second job and hunker down for the long haul because as they say, things have to get worse before they can get better.

Inflation | United states | Europe | Russia | Bitcoin | Us inflation | Europe inflation

Check out our games!

Wager cryptos with our provably fair casino games!