Brahmason's Blog

As papers both in english and spanish publish today , spanish banks have apparently managed to hide 80.000.000.000 € in credits to real estate promotors .

Spain ( polititians , economists , banks and investors ) continue to believe that the only way to recovery lays in distorting reality .

Through all this turmoil on accounting both the government and the oposition forget what is more important to the country’s economy , which is the impossibility to recover growth unless the old saturated economic model based on housing speculation with very cheap labour mainly imported , will be changed by a modern model based in industry and services incorporating high added value solutions with low raw material and energy consumption .

This is the real problem because a new generation of polititians , economists and enterprisers are necessary for such a project , which inevitably would require a tax system scheme totally different than what we have .

The absence of such a model is forcing all engineers in new technologies with good professional bacground to fleed Spain in search for jobs in Europe and the USA more in accordance whith what they are prepared to perform .

Thi is paving the way for a society with yet a lower purchase power ( already 60 % are on salaries below 1000 € ) which will need many years before it justifies important foreign investments in the country .

If Spain tries to grow at a speed of 2 % the stangflationist model of the economy will need an inflation of around 5.5 % which of course is impossible to accept by european parteners because it would take us back to a never stop growing debt and deficits .

Brahmason

Highly recommended for anybody who wants to grow .

New TV Series with Peter Russell and Duane Elgin

Duane Elgin and I have created a TV series for Marin TV, entitled "Pete And Duane’s WIndow". The first six programs aired at the end of 2010, and the series is now up on the web. See: PeteAndDuane.com

Our intent has been to discuss issues of interest to us both, taking the discussion deeper than normal on television. Topics we have covered so far are:

The Awakening Earth
Our World in Transition
The Roots of our Crisis
Take Back the Airwaves
The Mind of the Dolphin
Science and Spirituality

More will follow soon..

If you like them, please let your friends know and mention the series on your social networks.

Thanks, Peter

Increasing lending interests alone will not ward off housing bubble . At least not fast enough to prevent bubble from reaching peaks impossible to deal with .

Chinese authorities will need no less than four more moves of this kind during the current year without substantial results and in addition they may find that with rates around 8 % the whole dynamics of global growth may be drastically affected .

What the chinese authorities should do is impose a substantial tax on the difference between purchase and selling prices tied to the period of possession time and fix a rigid evaluation policy of property by lenders .

On the other hand the gap between deposit and lending rates must be narrowed , because saving is strongly discouraged by the present difference which leaves savers with un interest below inflation and convinced that he looses more saving than assuming a mortage that they expect to be clearly compensated by the continuously rising prices .

Brahmason

Housing bubble in China will inevitably pop during next few years causing a very strong surplus of home appliances which should strongly press prices of home appliances down during the coming years . ( Among other consequences )

In fact , that will only be one more example of the excess of liquidity in the world , which seems unable to understand that the only way to grow steadily and without tensions , is to take measures to avoid bubbles of all kinds .

In this respect investors and worldwide monetary authorities should begin to appreciate gold as a relief valve that absorbs much of these tensions by leaking or entertaining part of the excess in liquidity .

In other words investing in gold is better for world economy than investing in real estate .

Brahmason

With Asia and Germany solidly growing and dollar weakening , plus OPEC gonfirming an upwards demand and however keeping production levels , oil price should go up .

But it doesn´t . It is even going down during last few days .

That is really aukward . And then gold steadily , softly and quietly going downwards .

That sounds really bad and my guess is that shortly we are going to learn of a strong stangflation in the USA with net little growth in the short term .

The big question which is becoming a real nightmare to big investors , is where the money goes under the circumstances .

That will remain without solution till fresh data confirming clues will be published or simply learned by market drivers . But e few prestiged gurus have already confirmed that an economic tsunamy is around the corner and they might be right after all .

Brahmason

More than onehundred municipalities and states in USA on the verge of economic collapse .

Crude oil price surging fueled by Asia strong growth , makes west recovery much more difficult , while some economies of this part of the planet struggle to cope with deficits in angush .

Social unrest and political discredit is further bleeding countries suffering from stangflation in a worsening spiral trend .

The dollar furiously pressed downwards is even confusing gold . Money does not know where to go . Volatility is in charge .

For the time being the only instrument that may stop dollar from deteriorating deeply , is the potential default of some of the european PIGS . Thus Germany and France doubts on rescue packages .

China perceives the situation and should help stability in exchange for more power in world institutions .

2011 is going to be a year to remember .

Brahmason

El fiasco en el crecimiento del PIB sólo tendrá confirmación en el segundo trimestre y con ello el resto de las cifras macro , asi que no será por ahí por donde se ponga el marcha el proceso .

Tampoco lo pondrán en marcha los sindicatos que se saben corresponsales del drama en que estamos metidos .

Ni siquiera la deuda , porque Europa está obligada a ir apuntalando con parches para evitar un colapso que les alcanzaría . La deuda sólo puede actuar como mecha a partir del 2014 .

Lo único que puede desequilibrar a Zapatero es la caída de la bolsa por debajo de 7500 y quien tenga dudas que pregunte directamente al presidente .

Brahmason