The economic crisis triggered by Corona is currently affecting every country in the world. Surprisingly, however, the countermeasures that the states are applying always seem to be the same: printing a lot of money.
In the Eurozone, this approach is reflected in the fact that the amount of money in circulation has increased by about 54% since 2009, while gross domestic product has only increased by 22% in the same period. This does not yet take into account the decline in production, which in the southern European euro states has not yet come close to the level of 2008. In addition, the new EU budgets, which are limited for the time being until 2016, are likely to cause this money supply to rise even further. If the Mediterranean countries in particular do not succeed in reforming their economic systems, no corresponding countervalue will be created for the new money.
The development is similar in the USA. The size of the M1 money supply, i.e. the amount of money in real circulation, has shot up from about 4 trillion dollars before the Corona crisis to 16 trillion dollars within a year. As in the eurozone, this figure is likely to rise sharply in the next few years as a result of comprehensive financial packages on the part of the government.
The new figures from both the euro area and the USA, and from a number of other countries, point to a new phase of inflation that is likely to last for a long time.
Simon Dierich 