Archive for the ‘Inflation’ Category

When purchasing a home, most people turn to a mortgage. This type of loan is characterized as a guarantee of payment, undertakes to purchase the same property. It is what is called “mortgage” housing.

Sometimes you can also mortgage a home free of charge and to obtain funding at lower rates or amounts greater than the personal or consumer loans.

In Spain, almost all mortgage loans, 98% are contracted at variable interest (see article on EURIBOR). Interest is calculated every six months or a year by reference to EURIBOR for that period and added a small amount (eg, EURIBOR +0.5).

• Variable interest mortgage loans in stable

In situations of low interest rates and low inflation, often not even consider performing fixed-rate mortgages, since they usually have a much higher interest rate as variables. Therefore, in economies that are involved and expect stable medium and long term, which is the duration of the mortgage, provided we chose a variable rate mortgage.

• When inflation rises

But what happens when the economy suffers a more confusing time? When prices (inflation) rise over the account, the central banks increase interest rates to curb consumption and (the money is more expensive, then reduce appropriations, as well as investors do not move your money if the simple interest deposits and offer acceptable.) This has an impact on variable rate mortgages were also affected by these increases when the time comes for their semiannual or annual review.

Read the rest of this entry »

All these assets are financed with own resources and others that represents a liability, and liabilities of every company has its cost, but sometimes we’re not very aware of it. (The accounts do not register the opportunity cost, the risk assumed by the company, or inflation, for example).

By definition, the profitability of assets is obtained, must be greater than the cost of liabilities. But also for the survival needs of the company. However, reality often shows something quite different.

All assets of a company is not composed of fixed, there is also the current assets. But especially in industrial companies, the asset has a very important and should therefore be carefully studied and analyzed investment decisions. Especially considering that this type of investment involves the resources of the company’s long-term. It is therefore “absolutely essential to plan well the investment projects, with an eye not only in the short term but also medium and long term.”

Read the rest of this entry »

Experts anticipate an economic slowdown over the past two or three years into the future, with a decrease in activity growth to 3.1 percent in 2008, almost half the number is less than anticipated for this exercise. The report “Economic Consensus” in the third quarter of 2007, prepared by Pricewaterhouse Coopers from the panel of 346 experts and entrepreneurs, described as “very good situation” the economy is currently in Spain, but saw a decline, which would be “more or less pronounced depending on the situation internationally.”

Some analysts even expect the decline in productive activities “without the economic behavior in the European Union.” Warning that growing among experts about the evolution of an expanding economy in Europe such as Spain, while improving your attitude toward the United States.

Consensus indicates, in the context of rising interest rates, greater pessimism over the economic and financial situation of families in the rest of the year the expenditures stop “suddenly, and vice versa, maintaining a moderate optimism about the economic and financial situation of companies in this semester.

Read the rest of this entry »

An economists’ forecast that inflation will be 4% next week and will most likely be wrong. No, not the scientists who do a good job and a bad economist. The problem is the nature of the data that each work. The data that we use in economics, always, by definition, wrong. “Wrong? Maybe I’m too far away, I mean, old, past, or simply does not reflect the current reality. They reflect the reality of the past.

Economists will be asked to provide a vision or figure what would, for example, the economic dynamics in the next quarter. Very difficult task if one takes into account all the information and the best in the world delayed and did not reflect this. To simplify this argument, think about your business. Can you, today, to say what level of sales this quarter.

Difficult task, especially if we assume that your company’s sales and themes inherent in the product, branding, advertising, etc., will be affected by inflation, overall economic growth, investment, type of contrast, etc. But if you can not say how much they will sell economists, how economists to provide a projection that are more or less realistic than what would occur in the environment.

Read the rest of this entry »