Friday, February 20, 2009

0.7%: The 1st World's Hypocrisy

In 1980, many States agreed to use 0.7% of their GDP to develop the Third World. Only four of these States have achieved this objective and Spain, as you might suppose, is not one of them.

Anyway, the only purpose of this measure is to pretend the governments of 1st World are worried about the problems of developing countries. Besides, most of these developing countries are governed by corrupt dictators. I think giving money to them is the worst way to help people who live in these States. And, honestly, I cannot believe our politicians think in the other direction.

On the one hand, our governments give money (our money) to these dictators telling us it's to develop the Third World. On the other hand, they put duties taxing every product from the developing countries and "they" give (actually, it's our money what they give) edowment to our agriculture.

In my opinion, the only way to help these countries is to let them develop themselves. And it will only be possible if the First World removes those duties and subventions. I know it would mean the unemployment of most of our farmers, but it's the only way to let their products become competitive in our market and, besides, it would improve the efficiency and benefit consumers.

After all, I think it's stupid to invest most of the budget of the European Union in subsidizing agricultural products that are going to be burnt. But it's another question we will talk about in the future.

James Wilkinson

Saturday, February 14, 2009

The Serious Danger of Deflation

In Spain, inflation is plummeting. If nothing changes, everything points to deflation next months.

At first sight, the fact that prices fall could seem something positive. After all, we would have a higher purchasing power (if we keep our job).

However, if you think about it, you will see it isn't as good as it seems: would you buy something today if you know it will be cheaper tomorrow? Actually, you would buy your most pressing needs, but not a house or a sofa, for example. Other people would do the same and sales will take a nose-dive. So, more people would be fired (increasing the number of unemployed people).

Today, there are more than 3,200,000 unemployed people in Spain. Unemployment increased in 200,000 people last month: it means more than 6,600 people a day. What will happen if our economy gets in deflation?

James Wilkinson

Taking Up my Blog Again

I'm sorry I haven't post anything since November. Other tasks I cannot disclose (in order not to show you who I am) took up my whole time. Anyway, let's resume the blog again.

James Wilkinson