In addition to the sovereign debt bubble, rampant inflation and an energy and agri-food crisis are threatening the future of our economies. Against this backdrop, the rise in the price of money seems a fait accompli. Jas Texidó, head of public and institutional relations at 11Onze, explains this in a new episode of the Estat de la Nació programme.

States are accumulating a large amount of debt that they will find challenging to assume due to the imbalance in their capacity to generate wealth. Increased fiscal pressure on a citizenry punished by runaway inflation could result in a contraction of the economy that would endanger the financial stability of the markets.

“The price of money will rise too late and too little because so far, while stating that they are very concerned about inflation, they have continued injecting money at will,” Texidó points out. In addition, he details that the purchase of public debt and capital injection will end this summer “to stop maintaining this bubble of the stock market, with high values that defy all logic”.

Raising interest rates is only part of the solution

As Texidó states, “the devaluation of the dollar and the euro, due to the enormous debt of the states, means that raw materials continue to rise in price. And the increase in the interest rate applied to the euro will not be enough to counteract this weakness”.

Given the long-running geopolitical conflict in Ukraine, it seems likely that measures to alleviate inflation will fall short and arrive too late to halt price rises in the short term significantly. Against this backdrop, Texidó details different options we have to diversify our investment.

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