The German house builder is witnessing in these days how dearly the upswing will cost the world.

Steel beams cost 69 percent more on an annual basis, insulation materials have more than doubled in price and Regips has increased in price by 344 percent.

But home builders are not the only leading indicator of rising inflation.

Bank of America has now issued a "temporary hyperinflation" warning.

Strategist Savita Subramanian has analyzed the minutes of the latest quarterly reports.

The company bosses (CEOs) have never warned of inflation in so many numbers as they do in the statistics dating back to 2011.

CEOs' inflation warnings are up nearly 800 percent year over year.

“Typically, the CEO indicator is a quarter ahead of actual inflation,” Subramanian writes.


"That indicates at least a temporary hyperinflation." The company bosses complained above all about rising raw material prices and transport costs.

But labor costs have also increased.

For years there has been a heated discussion in the financial markets about when and whether inflation will come at all.

And although the upswing is not really there yet, at least in this country, the topic is now omnipresent in people's minds.

A lot is at stake, especially for German savers who have hoarded 2.6 trillion euros interest-free on current and overnight money accounts.

Source: WORLD infographic

Should there really be a massive rise in inflation, the creeping loss of purchasing power for German citizens would result in a violent slump in prosperity.

The market watcher Grant Williams says that investors are facing an important decision.

Namely, whether or not you want to protect your savings from permanently higher inflation.

An explosive mix ensues


In fact, an explosive mix is ​​emerging.

The world economy is recovering.

Because of the pandemic, however, there are bottlenecks in semiconductors or transport capacities.

The prices for semiconductors and freight rates are rising accordingly.

In view of inflation rates of several hundred percent, one can already speak of hyperinflation in some cases.

That's not all.

At the same time, prices for raw materials are skyrocketing.

From agricultural commodities such as wheat to energy such as oil to industrial metals such as copper, everything is becoming more expensive.

The Bloomberg Commodity Index, which bundles all of the earth's treasures in one basket, has risen to its highest level in a decade.

The index has more than doubled since the corona low in March 2020.

Even the prices for CO2 pollution rights have skyrocketed.

For one ton of the greenhouse gas that corporations want to emit, they now have to pay more than 50 euros.


Firms are likely to try to pass the increased purchasing costs on to consumers.

A significant increase in inflation rates can already be observed.

In April, inflation in this country was already two percent, and the trend is rising.

Source: WORLD infographic

No major resistance is to be expected from the monetary authorities.

Both the European Central Bank and the US Fed have repeatedly stated that they regard the rise in inflation as a temporary phenomenon and will not counteract it with tighter monetary policy.

In addition, inflation has always been below the target of two percent in recent years, so an overshoot is now also acceptable.

Whether inflation stabilizes depends above all on wage developments.

Long-term inflation can only occur when prices jump into other areas of the economy.

It was the wage-price spiral that caused a sharp decline in purchasing power in the 1970s.

In the US, investors seem to be already positioning themselves.

There, the inflows into so-called value funds have risen sharply in recent weeks.

Value stocks such as oil stocks or mining companies, which earn their money primarily in the here and now and not in a few years' time, would benefit from a surge in prices.

If you want to do the same as the Americans, you can stick to an index fund with commodity stocks like the VanEck Vectors Global Mining (NASDAQ: VKN: A2JDEJ) or a value ETF like the Xtrackers MSCI World Value (NASDAQOTH: iShares Edge MSCI USA Value Factor) (WKN: A2AP35) or the Invesco MSCI Europe Value (WKN: A1JUK7).

“Everything on stocks” is the daily stock market shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists from WELT. For stock market experts and beginners.

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