Wednesday, November 16, 2005

Euro Slumps, Blair and EU Don’t See Eye-to-Eye

The once powerful Euro currency has now taken a steeper fall. According to XE.com, the currency exchange of 1-euro now equals $1.16 USD. This further shows that the European economies still suffer and cannot manage to turn around the economy. Now I am starting to question the European governments’ interests in actually improving the economies of their respective countries. Is it really that difficult? Are economies in such horrible shape that consistent results show no improvements, but rather show declines.

Furthermore, British Prime Minister Tony Blair is making another attempt to gather the EU political leaders and discuss more free-market talks. The first talks were a failure as Blair now called for leaders to hold a "truly strategic discussion". But with so many differences between the leaders and their economical policies, these discussions could possibly force more division within the European Union. Blair is right on target as he wants to concentrate on European entrepreneurship and stimulating the economy by expanding free-market trade, which would have been assisted had the South American countries agreed to work with President Bush by opening the free trade market.

Why is Blair’s plan not succeeding? Because most EU leaders, such as Jose Manuel Barroso (European Commission President) do not want entrepreneurship to improve; they do not believe it is a concerning issue. Their main concern is to "protect workers". Barroso believes that workers are losing jobs because of globalization, and so do most of the other EU leaders. Blair’s opposition believes that with the new EU budget, more funds should be made available to boost research and development, while keeping about 40 million euros ($48M) for funding farms/agricultural matters.

There is one common fault of European politics, and that is that European politicians like to create all these funds for certain objectives, yet many times portions of those funds find their way into a politician’s wallet. What insurance do Europeans have that the extreme funding of "research and development" will be spent correctly and be of efficient and affective use? What is the timetable?

Of course, once again Europe decides to take the socialist’s way of life by delaying economical improvements to "take care" of the people. If communism showed no guarantees, in history, of helping workers, how can socialism ever guarantee such? This is similar to the political debate between the democrats and republicans in the United States. The democrats attacked the republicans for loss of jobs, and as promised by Senator John Kerry, they would create one million jobs! How? They still had to think about it. The republicans, and President Bush, showed tax breaks towards small businesses and use a similar strategy such as the trickle down theory, where the wealthy invest, expand, and business prospers as well as job creations.

This is what Blair’s plan is. If entrepreneurship gains a big boost in Europe, then prospering businesses expand and allow more job openings, and even create new jobs. That would also take care of the workers. As I’d like to say it, "you need a chicken to lay an egg". The chicken is the business, the egg is the job. Europe needs a growth of businesses and industries in order for unemployment to improve. Workers cannot be protected if businesses are not improving.

EU economies are expected to grow by less than 2% of gross domestic product this year, well below 3.4% for the U.S. and 9.3% for China. Tony Blair is absolutely correct that Europe must pick up its economy, and by wasting 1/3 of its budget on "research and development" is not going to improve the GDP. By the time that research and development is "completed", the euro would be weaker and more jobs may be loss. But of course, it is all because of globalization, in the minds of the "caring" socialists.

Monday, November 07, 2005

The Decreasing Euro

1.00 EUR = 1.18141 USD

The euro keeps declining as European economies are further struggling. Plus the chaotic revolts in France may worsen the country's economy, which could take affect on the euro currency. The euro actually climbed up as 1.00 Euro = 1.1806 last timeI checked.

I don't think, as I have mentioned in a previous article, it will hit under $1.18, but it could as well. Keep a close eye as the Euro currency is somewhat dictating the direction of Europe's economy.

Chavez in Evolution

After dancing like a monkey evolving itself into a human being during his joyous bashing towards President Bush, Chavez is becoming an annoying threat towards the United States. Chavez’s mind appears to be going senile as he has bashed President Bush, victimized himself like a defenseless mouse by saying that President Bush will try to assassinate him, and again bashing Bush by rejecting any new talks on the Free Trade Area of the Americas.

Hugo Chavez is trying to evolve into a human being. Bush’s plans for the FTAA are in favor of advancing the South American countries economically with free trade and lifting tariffs. But for Chavez’s mind, that is all a bunch of "perversion" as he said. President Bush had a response to that illogical statement by saying "A country that divides into factions and dwells on old grievances cannot move forward, and risks sliding back into tyranny." That is where Chavez’s intelligence is going, which is backwards from where it should be going. Then again, what can anyone expect out of an "unofficially"claimed communist dictator. Or, as people in denial put him as, an old fashioned socialist.

Chavez has used military force to take away property from civilians and use it for himself. He has become Fidel Castro’s new pet, and a pet monkey for Castro to use against the USA. If the US has no trade involvement with Cuba, and rightfully so, then the same should be done with Chavez. The only problem with Chavez is that his power relies on Venezuela’s oil production. The US cannot afford to threaten Chavez as it is currently busy fighting in Iraq and Afghanistan. But, why doesn’t Europe, or the UN, do anything about this? It is the sympathy towards communism/socialism.

So, what is the only solution, in my opinion, to stop this dictator who is ruining Venezuela and trying to convert South America as a communist union to move against the US? Which, by the way, can be a threat if Chavez allows Islamo-fascist terrorists to enter his borders. Since many Venezuelans are not in support of Chavez, a revolution should be foreseen, or a coup d’etat must happen where Chavez will be defeated. No South American dictator has been a long–term success, and neither will Chavez.

A Free Trade Area of the Americas can turn around the US economy positively, specifically with Brazil as the major South American player in these negotiations. Unfortunately, Brazil also leans towards socialism and is sympathetic towards Chavez, but it will favor whatever economical advancement it can get.

Chavez will lead Venezuela backwards in a counterproductive stage, and it will come back to haunt him. Once the country will be in an economic disaster, his buddy Castro won’t be there for him. The only ones who will be there for him will be the outraged Venezuelans who will take his head on a silver platter. Chavez should have listened to Bush in these new negotiations, and should have proposed other ideas to try and reach an agreement; but, he failed to do so. That’s because he has yet to evolve his intelligence as a political leader, a human political leader.

As Chavez said of President Bush, "The man left beat-up. Didn't you see it?" I certainly did not, but I will gladly get to see Chavez beat up in the future. Can’t you see it?

Sunday, October 23, 2005

Business: EU's euro Weaker, Why?

About a year ago the euro currency held a strong ground as 1 euro equaled approximately $1.33 USD. Now, the 1 euro equals $1.19 USD. Why?

The main weakness for the euro currency is the European Union itself. Europe is going through a lot of instability with struggling economies in countries such as France, Italy, and Spain. Italy's government, Silvio Berlusconi's alliance of right-wing parties, inherited an economy in recession, however, almost six years later the economy is still stuck in a recession as it struggles to spiral itself upwards. Socialists slow down the economy due to socialism's policies, which concern investors. That's what is happening in Spain ever since new Prime Minister Zapateros was elected in office. Spain was becoming a strong economy under former Prime Minister Aznar, which was when the euro currency was escalating in value. An example would be the US economy pausing itself, and showed insecurity while the 2004 presidential election was coming to a near. Senator John Kerry was very close to a socialist ideologist, which brought uncertainty to the US economy.

With Germany being the only significant country, with the euro, to have a strong and improving economy, the EU finds itself unbalanced and inconsistent. The euro's value depends on the countries' economies and when there is one strong economy, two declining economies, and one in recession, then instability shows.

Other than that reason, the EU is taking too many imports. Europe in general is not exporting enough goods to increase the value of the euro. With quotas increasing and the economies struggling for stability, expect the euro currency's value, compared to the USD, to decrease. I don't see the euro go lower than $1.18, but I certainly do not see it ever coming back to $1.30 USD.

Another problem is Turkey. Though the economy in Turkey is fairly healthy and stable, it could likely face a dramatic phase if and when it converts its currency into euros. When the conversion occurs, prices nearly double. For example:

2,000 Lire = 1 euro.

Carton of milk costs 2,000 L (supposedly 1 euro)

After transormation of euro currency:

Carton of milk costs 2 euros (supposedly 4,000 L)

The price of milk doubled. That was just an example, none of the numbers are exact. But, that's what may happen in Turkey if, though as expected, it joins the EU and the euro currency. That could most likely put a negative affect on the EU's general economical status, and prevent the euro to strengthen.

Saturday, October 22, 2005

Business: Red Invasion, Part II

For almost half a century, the Soviet Union threatened the world with its invasive communism spreading though Western and Eastern Europe. It also had some effect in the United States, where it fought a cold war. That war came to an end over a decade ago, but a new communist invasion is on the horizon. It is a different communist invasion, however. It does not involve Russia nor does it involve a cold war, for now. This is an economical invasion that is a threat towards economic powers, and the invader is the People's Republic of China.

After the previous debacle with the European Union, involving the quotas on Chinese textile imports (who won the case since the EU forced countries to raise the quotas), the new concerning issue is the automobile industry, where Chinda wants to enter. The first taget location is Europe, where Jiangling Motor Corp. has already brought in the Landwind sport utility vehicle at a cheap price of just 15,000 euros, approximately $18,000 (USD), which is about 30% less compared to the competition. The only problem concerning China's vehicles is their safety productivity. The Landwind can be a fatal and unsafe vehicle if it sustained an accident going at just 40 MPH. That crash test was heavily criticized by the ADAC German group that tested the Chinese car. Even if the car is extremely unsafe, the EU's safety regulations are so easy to pass that the Landwind actually meets all of them. And so far, 600 Landwinds have entered European dealerships.

I like to call this the Red Invasion Part II because of China's threatening economy endangering other countries' economies with its imports. I would blame China for taking such actions that are suspiciously dumping-like strategies (meaning they sell the product for less than it is worth to produce). The labor is so cheap in China that workers in the assembly lines make about 26 cents an hour. In the US, an employee working the assembly lines makes about $26 dollars an hour, while in Germany it could reach as high as $36 dollars an hour. China is taking advantage of its labor force, which causes production to cost extremely cheap and the quality is inferior to the competition. This Chinese vehicle is manufactured poorly and cheaply, bu the European market still allows it to import. With certain European automobile industries close to bankrupcty, such as Fiat, the EU shows no effort to help out its origins, but rather makes it easier for Chinese imports to enter borders and weaken the already-struggling economies. Why not raise the tariffs on the Chinese? Why not have the United Nations force China to act more civil and address human rights towards their abuse of cheap labor force? Why not raise safety regulations in a way that China's vehicles cannot pass? It is all in the self interest of European politics who sympathize with Communist China. It is slowly becoming an economical threat, even to the USA, but specificall towards Europe where economies are unstable.

The Chinese are even aiming to bring the Landwind in the United States, but with its horrible safety issues, Americans will not spend $18,000 dollars on a cheap vehicle that does not serve a good cause. The target marketing of China is an act of invasion. It wants to use its cheap products to defeat worldwide competition. While that is slowly starting to happen, the European Union is letting it slip by without any care.

In the near future, there may be a need of, what I like to call, an Economic Iron Curtain to protect European and US economies from Communist China's economical invasions. I would take that action as soon as possible. There is a need to find every possible way to prevent too many Chinese goods and services, produced by Chinese companies, from entering European and US borders. Or else, it shall be another Red Invasion.