Inflation

The term «inflation» refers to a general price increase or devaluation of money. Inflation occurs when the prices of consumer goods increase steadily – as opposed to deflation, in which prices steadily decrease.

Because prices go up, money is worth less because it buys consumers less goods and services. In other words: Goods become more expensive.

A difference is made between mild or “creeping” inflation (0 to 5 percent devaluation per year) and severe inflation (more than 5 percent devaluation per year). Hyper-inflation refers to rapid devaluation of money in a short time-frame.

During times of sever inflation, investors turn to tangible assets such as real estate, commodities, precious metals or stocks to protect their wealth. Inflation-protected securities, like those issued by many states, are another investment option.

See also: Deflation

More on this topic:
Inflation calculator
Compare trading fees in Switzerland
Stock trading tips

About moneyland.ch

moneyland.ch is Switzerland’s independent online comparison service covering banking, insurance and telecom. More than 70 unbiased comparison tools and calculators are available on moneyland.ch, along with useful financial guides and timely news. The comprehensive comparison tools help you to find the right insurance policies, bank accounts, credit and prepaid cards, loans, mortgages, trading accounts and telecom products for your needs.