Brahmason's Blog

The balance between offer and demand is the sacred essence of a sound and lasting world economy .

That balance has been broken beyond elasticity limits simply because purchase capacity has collapsed and governments and financial institutions have made all that has been necessary to replace it by a never ending increase of credit resulting in a continuously mounting debt that will never be possible to be paid back .

At the end of the day economy depends on companies Earnings Before Taxes and the only way to ensure that EBT is enough , the purchasing power or in other words average salary must be enough . As salaries are not enough to cope with prices and match the offer , demand has to rely on continuous loans and that results in the non return spiral of debt where we happen to be just now …

The signs that this is happening are the stock exchange growing five times  more rapidly than real economy and overall richness concentrating more and more in fewer hands.

The problem is that once the companies composing the stock exchange cannot produce profits because demand collapses , enter in negative territory and have to reduce structures and eventually shut down the business with the inevitable result that rich speculators holding the titles are swapped also by the flood created by their own ambition and ignorance on economy principles .

The tax systems must be such that money is stimulated into fixed capital investments in areas sensitive to the creation of high and medium range jobs ..which will guaranty a lasting and healthy demand .

Remember we live in the same frame of reference where not a single part can remain unaffected by any crisis in the environment…It is the butterfly effect…no one escapes .

Brahmason