German Government

Originally the unique role of the German Government was to regulate competition, avoiding monopolies and oligopolies. Over time, the name began to collect their own life and became a help system, too expensive, which was to subsidize services and helping companies at the expense of taxpayers. He left the concept of Erhard becoming an instrument of preservation of the companies, rather than a tool that generates its renewal. David Green has plenty of information regarding this issue. Helmut Kohl tried to reduce government intervention in the private economy, and when I was doing came the unification, making State out to auxiliary to their compatriots of Eastern Germany impoverished by communism. Due to the internal contradiction of his philosophy that seeks to combine the virtues of the market with the social security and made it to deflect from its original course by keeping a solidary State which reaches half your salary cost tantamount to each citizen the Social market economy is strongly questioned by Germans.

A new stimulus package and the declining economy, will cause a deficit budget unprecedented in 2009, which is estimated at 50 billion euros ($67,000 million), said Volker Kauder, parliamentary leader of the Party of Angela Merkel. Obama in his land requested more money to inject to the straggling and lessen conflicts that would shake its popularity and enigmatic future Government. To save everyone, it is likely to try to trim budgets, including defence, as did the Europeans. Yael Aflalo usually is spot on. That would be an error garrafal. However, what you do, the crisis is not going to resolve coup.

The great depression It lasted 10 years, recently concluding in 1939 with the second world war, since the interventionist policy of the New Deal of Franklin D. Roosevelt was a resounding failure. Obama is similar. United States was recovered with the war, because the massive recruitment made the country will stay with a reduced workforce and there was occupation for everyone. The situation today is a thousand times worse than the 1929, and adverse economic conditions are the fuel of radicalism. The crisis of the 20th century made that Hitler was elected Chancellor, and the current made that Obama is voted President. Is Obama a populist with pretensions of grandeur? Not the slightest doubt.

Reuters Ixe

It has also increased the inflation risk. Although the retail inflation rate is registering a descent, not happening the same thing with core inflation. While the retail inflation slowed to 6.25% during the first half of February, the underlying inflation rate accelerated reaching the 5.81% year on year, compared with the previous level of 5.76%, the eldest this level reached in more than seven years (and logically, above the goal of the Bank of Mexico located at 3%). According to the opinion collected by Reuters of Luis Flores, Grupo Financiero Ixe Analyst: the exchange rate continues to be the most important determinant for local inflation and, consequently, for monetary policy. The inflation risk together with the exchange rate weakening will be factors that limited to monetary policy. A report by Grupo Financiero Ixe said about expectations about the evolution of monetary policy: we hope that the Bank of Mexico continue trimming rates to 6.50% by the end of 2009, but his approach could become more prudent and dependent on the weight/dollar volatility, it said Ixe in a report separately. The benchmark interest rate is currently at 7.5%, after trimming carried out last Friday by Banxico.

In the statement where reported such a cut of rates Banxico warned about inflationary risks product of exchange rate volatility. No doubt that the Mexican economy is immersed in a vicious circle which is not easy to leave. Probably the Government of Mexico should expand its economic stimulus package to prevent that the deterioration in the economy continue deepening. The recovery of the economy increasingly is more subject to recoverability that can experience the American economy. Is for this reason that can be expected that the production of tradable goods sector will be one of the first sectors that will achieve the recovery when it occurs (probably not before the end of 2009). You will have to follow closely to companies of tradable goods to identify those with greater potential of recovery and expansion.