jueves, 20 de marzo de 2014

¡DEFLATION! TO LOWER PRICES IS THE ONLY FORM OF COMPENSATING THE EXCESSIVE VALUE OF THE EURO


The deflation is already installed in the Euro area the prices they continue giving samples of moderation. They indicate this way it the first published estimates of the IPC that he is very below the expectations and very far from 2% that has marked as objective the European Central Bank (BCE). It is the lowest level from the creation of the unique currency; it is this so dangerous that until it seems like that deserves so few comments and analysis in the economic press. 

The fall of the prices in 2014 it could hinder the incipient recovery of the Euro area of their financial crisis and of debt, this has already passed the deflation it is no longer about he has already lodged in almost all the economies of the euro and I eat consequence it dominates the global economy of the own euro area. A long period of prices to the drop is very harmful for the group of the euro, since so much governments as companies as matters, in the middle of give to get in debt process are.  

And it is that if the prices fall, the effective weight of the debt is bigger, because there is less collection in all the environments (tax and I consummate) what complicates its paying-off and it still ballasts more the halting internal consumption. In fact, the European speculative fantasy of the responsible ones, on an incipient economic recovery of the Euro area, he vanishes of the real economic scenario.  

The specialists sustain an and another time some solutions totally guided to the potential of Germany but they don't realize that Germany is alone 20% of the UE so all that today benefits to Germany harms vastly to 80 remaining%. The types of interest in the Euro zone are at the moment in 0,25%, for what the maneuver margin in this sense is scarce. However, the central bank could use other types of less conventional actions, as activating the purchase of sovereign funds to stimulate the economies or to acquire active to the bank entities  

But this is to act on speculative and not real positions in my opinion these advice they are false because so much if the BCE buys funds or active the reality will be that the debts will continue being there after a form or other the banks and national governments doubt a lot that they rush to reactivate anything before adjusting their deficits and debts for what these measures can be completely ineffective short term that is they don't doubt it where the problem is. 

The euro area and the whole alone European Union has a true problem, and a single solution both they are the own euro that is extremely and irrationally overvalued alone I will give them an example on what happens I have bought an automobile that I found difficult 20,000 € well today this same model automobile for 7 years and it marks and above improved of equipment, I can buy it for 18,000 which the difference is 10% as much as the euro has been evaluated exactly in these 7 years 8%, adjust the offer for the necessity of sale of the concessionaires and of the market in general and they will see that the price slope is not such, but rather what attempts the market is to maintain the consumer's purchasing power it sews that it doesn't get for itself, because in a crisis situation and widespread cuttings, it would be impossible to sell anything if the prices were in agreement with the solidity of the euro. 

Some economists would say to this fact that is just the opposite that today this I articulate it is more economic because the foreign currency that it is cared is more valued and if this would be acceptable if there is not in parallel a deflation of wages, of GDP of the European countries and some ascents of sovereign debts the reality and you don't formulate them mathematics he is telling us that you cannot continue drowning the general economy for the interest of a single economy that if it interests him that the euro this overvalued, for the simple reason that she has every time but and he finds to lend them or to sell them a great business. 

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