By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, November 17, 2022

The euro area annual inflation rate was 10.6% in October 2022, up from 9.9% in September. A year earlier, the rate was 4.1%. European Union annual inflation was 11.5% in October 2022, up from 10.9% in September. A year earlier, the rate was 4.4%. These figures are published by Eurostat, the statistical office of the European Union.

The lowest annual rates were registered in France (7.1%), Spain (7.3%) and Malta (7.4%). The highest annual rates were recorded in Estonia (22.5%), Lithuania (22.1%) and Hungary (21.9%). Compared with September, annual inflation fell in eleven Member States, remained stable in three and rose in thirteen.

In October, the highest contribution to the annual euro area inflation rate came from energy (+4.44 percentage points, pp), followed by food, alcohol & tobacco (+2.74 pp), services (+1.82 pp) and non-energy industrial goods (+1.62 pp).

There are large disparities between the member states of the euro zone. France is hit by 7.1% inflation in October according to Eurostat (after 6.2% in September), just ahead of Malta, +7.4% in October, after 7.4% in September. Inflation reached 12.6% in Italy and 11.6% in Germany. Every month, a new record is reached.

The European statistics agency Eurostat earlier reported that the inflation rate in the euro zone in October reached a record 10.6% in annual terms, after 10% in September and 9.1% in August.

Among the countries with the highest inflation rate for the year were Estonia (22.5%), Latvia (21.7%) and Lithuania (22.1%).

Read also : How to invest in gold

The serious problem generated by this inflation in Europe, which woke up in July 2021 and is only increasing every month, is that it is always destroying the purchasing power of the middle class a little more. This social group is the fundamental foundation of democracy. History shows that when the middle class disappears economically, countries crumble and choose dangerous political paths.

The European governments bear the responsibility for allowing misguided and inappropriate monetary policy to persist in 2020 and 2021, when lockdowns froze economies. The surplus money created by central banks then further inflated the bubbles of real estate and stock market assets, and accumulated in the pockets of the wealthy classes, confined and deprived of the possibility of consuming. In the summer of 2021, when the economies reopened, the flow of currencies caused the economy to overflow. Since then, inflation has only risen. The war in Ukraine since February 2022 has only contributed to this catastrophe, without being the cause.

The social pact of European democracies is disintegrating before our eyes. More and more citizens are questioning the legal authority and legitimacy of European governments, their policies and the capitalist model. A short-term solution is to support modest families and those of the middle class, in order to avoid their financial bankruptcy. Next must come major economic and fiscal reform in the euro zone, whose 19 member states have the same currency but 19 different economies, 19 different budgets and 19 different tax systems.

Another priority is to start a serious thinking on the purchasing power of money in Europe. Should the gold standard be restored to strengthen the euro? Why not ? The central banks of emerging countries move away each month a little more from the dollar and accumulate gold. How long European citizens will peacefully endure this situation ?

The exchange rate of euro/dollar now is : 1 euro for 1.04 dollar

Over the past 30 days :

Gold price is up 6.56%, at $1,761.8 per ounce

Silver price is up 11.91%, at $21.06 per ounce

Thank you for being among our readers.

Our community already has nearly 85,000 members.

Sign up to get our exclusive articles.

To receive premium content, subscribe, it’s only €8.99/month. You will see the subscription form on posts with restricted access.

Support us by sharing our publications!

© Copyright 2022 – Swann Collins, investor, writer and consultant in international affairs.