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Spain

Spain

Trichet has hinted it might even raise interest rates if inflation does not drop. SPAIN WILL “IN RECESSION? They say no, it is very difficult for a growing economy, the overnight decline. But they also say the U.S. GDP growth was 4.9% in the third quarter of 2007 and fell to 0.6% in the fourth. So we are not in the best time. BUT Wal Mart, which is like the English Court but way, has sold in the last quarter of its fiscal year 2007, 9.5% more than in 2006. It has gained 4% more. This is not the only good news that appears in newspapers.

What happens is that you set. And each day are enough. For example: On February 28, Cesar Alierta, President of Telefonica, made a profit of EUR 8.906 million, becoming the operator with the most wins in the world, ahead of ATT (8733), France Telecom (6300), Verizon (4038) and Deutsche Telekom (3165). He announced that distribute a dividend of 1 euro per share, and since there are many people who have shares in Telefonica, each will have multiplied the number of shares for 1 euro, deductions will be deducted and must have thought: “Man, is not wrong. ” SPANISH ELECTIONS Apart from the politicians who throw candies for people to pick them up, it is seen that the situation is serious enough to make nonsense. Yesterday I heard that politicians should be required to think long, to which a person of great economic and political experience, he replied: “Politicians are paid to think short.” That same person (Alfredo Pastor), in a February 24 article, said: “As should be … in a rich society like ours, what distinguishes a political program of another is not so much the economic proposal as the concept of society. That should focus the debate that will decide the election result.

Economy

Economy

Then optimism takes over the market. Enthusiasm becomes bubbly and makes watchful, for the near future, the rapid growth between 7 or 8% annually. Interest rates down, having a lot of money into banks to lend, why not fire the luxury goods consumption and necessary. The consumer has money to import and spend. That makes the state increase its tax revenues on consumption and imports. And as the state always has a tendency to spend all their income and then some, of course, increase public spending and the economy will show abundant.

But, as the village idiot “of that kind do not so much!” It is expected that after a few years, three or four things to change. The public debt and enjoy their “durable goods” will begin to be cautious in their spending. The economy, unable to continue to grow and with a significant deficit in the trade balance, start boomerang effect. And when it foresees a troubled economy, investments decrease, interest rates rise, state tax revenue is reduced and the deficit begins to increase, which is why the state decides to finance its budget more international loans that banks begin to impede or deny, given the distrust of the markets. Domestic and foreign investors are afraid and start to take their talk again. Interest rates continue to rise, inflation gallops joyfully, unemployment makes his own and, finally, the economy goes into recession. The government, their income being seriously damaged, crops such as spending, investment in the sector first and then the operation, another tax reform proposes to raise taxes, makes strenuous efforts to control tax evasion and pursuit of its contributors necessarily intervenes to save bank savers and bankrupt, too expensively, to save another major undertaking of its liquidation.

The recession is critical. And for critical realities the most common solutions are the emergency measures. The country that we imagine is now the victim of the sharp devaluation of rigorous plans fiscal adjustment, the paralysis of their investments, massive layoffs, wage adjustments below the rate of inflation and everything else. And, of course, the country will recover! .