Claptrap & Scam
PIM of SPAIN | March 16, 2009 at 10:08 amby
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After entering the European Economic Union in the 80s, the EEU subsidised Spain to bring them up to European economic level. The Socialist under PM Gonzalez spent the money on infrastructure and buildings, but too little or none on development for innovative technologies to diversify their industries. Construction took 17% of GDP and in 2004 the socialists again were in power they thought the trees would grow into the sky. When the time was still good no correction for diversification was considered. People bought houses with 110% of the purchases price in mortgages, only a signature was required, no questions asked. Politicians, Mayors and their Counsellors of towns, villages and cities corrupted the system in their hunt to laundering black money into construction projects, through rings of officials that created a swindle with construction-licences to built hundreds of thousands illegal buildings on protected rural estates, demolishing the countryside and with it the precious sceneries in the process. But nowadays the country is in a desolate state of affairs. Numbers of politicians, promoters, developers are in jail or out on bail even notaries and lawyers amongst them. Resulting in 15% or 4 million jobless, and before the end of the year this may rise to 5 million. With about 2 million houses for sale, from which a great majority not even finished, abandoned construction sites with idle cranes aplenty. No money no ideas left, just wait and see while PM Zapatero keeps promising heaven on Earth in a battered country, trying to avoid public protest. The question is for how long this will last?
During this same period, America got in the habit of getting shiploads of things from Asia paying for with pieces of green coloured paper. Quickly, Americans too neglected their own factories. Let the Asians sweat, they said. We'll do the thinking. However not much serious thinking took place over the last 20 years. Instead, people preferred to listen to the reassuring illusions of pompous claptrap by their President Bush. Telling over and over again that the USA has the 'strongest, most dynamic economy the world had ever seen' with which they had to congratulate themselves.
But now reality has arrived, the ship of state is sinking; you'd expect people would put on their life jackets and start to think what to do now. Forget it, they look to their government for free money, on which US Congress is spending away $1 billion per hour. And Spain… is broke.
Unemployment continues to rise sales are falling until a breakeven point between production and demand is reached again. Governments are talking about stimulus packages for the economy, thinking people will start to buy again the stuff they don’t need with money that is not theirs. For the foreseeable future there is no reason to believe that business will improve soon.
So far house prices, already are down by 30% and more, there is no sign of reaching a bottom; foreclosures are running 30% ahead of last year. And the press reports that there are 14 million empty houses in the United States and over 2,5 million in Spain. What happened to all the people who lived in them? They now live from food banks and NGOs. Meanwhile, the Feds keep the free money flowing. According to recent accounting, the FED has committed $12 trillion to freebies, bailouts, and boondoggles.
GM got a few billion. But the banks and Wall Street have been the biggest freeloaders so far. AIG has gotten four bailouts. Fanny Mae and Freddie Mac took big bailouts from the government too. But don’t think the gap has been stopped. The banks in Spain are for the time being in better shape… but for how long? Wait for what will happen when too many mortgages are going in default. And the pension funds are audited, that could be another time bomb in waiting.
When will all this be over? Who knows? But the odds are… not any time soon.
Everything by the time will be under control by the Governments as a consequence of the fleecing of taxpayers. Will this be the end of Capitalism???
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