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The ten year long housing boom came to an end in 2007 when the housing bubble burst and the economy went off the edge of a cliff and Spain was further hit in 2008 by the global financial crisis. A ten year long boom will be followed by a ten year long recession to unwind the boom. The housing boom created a smoke and mirrors illusion that Spain was a progressive modern advanced country but the reality is that the Spanish economy is fundamentally structurally flawed in that it is too dependent on the construction sector and tourism and not enough was done to create a more diversified economy.
Some people have been telling me that the mainstream Spanish media, particularly the television news media, is giving a somewhat upbeat impression of the Spanish economy and the property situation. Is the Spanish media treating people like mushrooms by keeping them in the dark and feeding them on err…manure by giving a deliberately false impression of the ensuing disastrous economic and housing situation in Spain? The reason why I am asking this question is that throughout the economic boom of the late 1980’s in Britain the mainstream news media like the BBC and ITN and the quality newspapers like the Murdoch owned papers didn’t seem to want to tell people that the then Chancellor Nigel Lawson was running the UK economy into the ground by continually pumping up the housing bubble and that he was reluctant to do anything about it because it was a run-up to the General Election and he knew that higher house prices made the middle classes feel richer and would vote the Tories back into power. The media in Britain at the time didn’t seem to have a critical word to say about fat boy Lawson but it was obvious to anybody with half a brain that he was injecting huge doses of inflation into the economy that will ultimately lead to economic disaster and a devastating recession in 1991.
I particularly remember reading the so-called quality newspapers “The Times” and “The Sunday Times” during the 1980’s boom and it gave not the slightest hint of the economic disaster to come and that Britain was heading for the worst recession since the Great Depression. Could it be that the newspapers in question are both owned by Rupert Murdoch and he was clearly a supporter of the Thatcher Government and he didn’t want his newspapers to say anything too critical of the Government? For a number of years now in the “Sunday Times” newspaper there has been a economics reporter called “David Smith” who seems to wear rose tinted spectacles every time he writes about the British economy and there is an american economics reporter by the name of “Irwin Stelzer” who appears to be always upbeat about the american economy. Both these people seem to live on the planet Mars. What they write is pure bilge and I was wondering is the reason why they write the bilge that they write because Ruport Murdoch supports the Tory Party after having supported Thatcher and then Tony Blair and now its Cameron/Clegg?
The BBC and ITN are no better than the Murdoch press in that they are not prepared to stick their neck out and tell reality as it is for fear that they will be accused of political bias and so from these news outlets we tend to get a cosy view of the British economy when in fact Britain hasn’t had an economy for the last thirty years.
Therefore I return to my original question, why isn’t the Spanish media telling the Spanish people the truth about the disastrous economic situation that Spain finds itself in and not prepared to the truth which is that Spain is not in a recession, it is in actual fact in a depression with Great Depression era unemployment rates that will ultimately rise to 50% and that the economic Depression will last ten years. The news media in Spain are also reluctant to tell the truth about the disastrous property market in Spain and refuses to state the obvious that house prices will fall by 90% from peak to trough and that places like Andalucia and the Costa Del Sol will not be immune from the Great Spanish Property Disaster and will also experience house price falls of 90%, particularly in obscure places on the Costa Del Sol like Fuengirola.
Could it be that the reason why the Spanish media are deliberately trying to be upbeat about Spain’s economy and housing market is because they fear that if people really knew what was happening then there would be a mass panic, revolution and civil war in the country?
The Spanish media should report the following as fact given that it is obvious to anybody that lives in the country:
- Spain has entered a ten year long depression
90% peak to trough falls in house prices
5 million vacant/unsold properties up for sale
Unemployment rate of 50%
Many people giving up looking for work
Many people relying on food handouts to survive
Some people will experience starvation
Massive rise in suicide rate
Huge rise in the cost of living
Wages and pensions cut drastically
Peoples life savings wiped out
Many British expats will sell their Spanish homes at a considerable loss and return to the UK pennyless
Once Greece exits the Euro it is obvious that Spain will be next
Spain is fast becoming a third world country -
You’re under an illusion sonny. Plenty of stuff in Spanish publications about La Crisis, unemployment, rising taxes, the Bond premium etc. For example just take a look at the English version of El Pais http://elpais.com/elpais/inenglish.html or the economic El Confidencial http://en.elconfidencial.com/ If you can read Spanish try eleconomista.es or http://www.cincodias.com/economia/
And if you still disbelieve that the economic stuff is not being taken seriously try this discussion board http://www.burbuja.info/inmobiliaria/burbuja-inmobiliaria/ or read (one of many) this economics blog http://www.elblogsalmon.com/
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Jake’s deluded. I wonder if he’s ever been to Spain?
The Spanish people don’t need the media to tell them how awful things are in the country right now. They are suffering. The older generations are used to it. The younger generation are bereft since they have never experienced such a vicious downturn in their lives.
This new autumn period is about to make life harder. IVA increases, food price rises and more unemployment.
Media reporting is an irrelevant side show.
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@logan wrote:
The Spanish people don’t need the media to tell them how awful things are in the country right now. They are suffering….Media reporting is an irrelevant side show.
The Spanish television media keep saying that the recession is over and that the recovery is taking place but obviously it is not and people on the ground know better than the media what is really happening in the country. The people of Spain are continually being brain-washed by the media to believe that everything is fine when in actual fact what is unfolding in Spain is a total disaster. The Spanish media is fully owned and censored by the Spanish government. Free media in Spain is a joke.
What Spain is going through is precisely what Britain went through in the recession that started in 1989 and ended in 1996 and if Spain’s recession is just half as bad as what happened in the UK then Spain is going to experience an economic depression with much of its economy destroyed and many British expats forced to sell up their Spanish homes at a considerable loss and return to the UK in a state of penury.
When Spain drops out of the Euro and adopts the Peseta this will lead to an over-night devaluation of the Peseta resulting in high inflation and a sharp rise in interest rates to control the inflation, but raising interest rates won’t be enough to control inflation and it will require a major contraction of the economy, reducing the money supply in order to make money scarce to cause the value of the Peseta to rise back up against other currencies. The reduction in the supply of money circulating in the economy will result in less demand, more bankruptcies and higher unemployment.
Spain will experience a second economic crisis that will be much worse than the current crisis when it drops out of the Euro. It is easy to bail out a country like Greece because it is a small economy but to try a bail out of Spain is almost impossible to pull off because it is just too big an economy and it will require too much money that just doesn’t exist and so it is a certainty that Spain will have to withdrawal from the Euro and let its economy collapse and only until a total economic collapse has taken place will a recovery be possible.
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@jakesuper wrote:
The Spanish television media keep saying that the recession is over and that the recovery is taking place but obviously it is not and people on the ground know better than the media what is really happening in the country. The people of Spain are continually being brain-washed by the media to believe that everything is fine when in actual fact what is unfolding in Spain is a total disaster. The Spanish media is fully owned and censored by the Spanish government. Free media in Spain is a joke.
sources?
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Whether it’s Spain, UK, USA, France , Italy, Greece, etc all countries cover up the true facts of their economies unless they are booming. To publish the truth would start major runs on Banks, sales of falling assets, and quite likely anarchy on the streets.
Spain is probably in worse poo than it portrays, with it’s banks, regions, businesses, and Gov’t all needing financial help and bailouts, then you have the unexpected things like fires and droughts all adding to the costs. 🙄
Just imagine if the truth was out as itsme says, it wouldn’t go down well, would you leave money in Spanish Banks then?
Maybe itsme, your nasty Bank will go bust first 😉
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