Brahmason's Blog

As costs inflation ( energy and raw materials ) is ahead of demand , the GDP canot grow in full health .

Costs inflation is ahead of demand as a consequence of recent bubbles . Housing and finance .

Both bubbles are a consequence of the shift of investment from direct long term high added value ventures to housing and Wall St. .
This have determined in turn the loss of added value ( reachness ) and competitiveness .

As you loose competitiveness you promote relocation abroad and loss of purchasse power that causes reduction of demand in quantity and quality and therefore further unemployment .

Trying to keep demand through continuous money injection and indebtment aggravates the problem . Further injection of liquidity has to be carefully restricted to the minimum necessary to prevent economy collapsing while you cope with housing bubble and reestablish incentives to regain the pace in added value ventures and control out of hand speculation in commodities ,stock-exchange and currencies . Austerity has to be the main target while the process lasts .

It is not surprising therefore that your policy of adding unnecessary huge amounts of money to the system while austerity is simply disregarded , lead you into an spiral of costs inflation with low increases of GDP without practically any trace of added value ( reachness ) .

With all my simpathy .

Brahmason