economy

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The Shop Local Pledge

The Shop Local Pledge

Wow, how did it get to be December? That snuck up on me! This is the season of Christmas markets in Mallorca and we´ve got some nice ones coming up. Already last Sunday La Gidg spent the afternoon helping out on the cake stall run by her Synchronised Swimming team at the Andratx Christmas Market. She loved it, well what´s not to love really? It´s cake and it´s playing shop. A perfect combination. There was a time when I used to have a little salon and I loved playing shop too, I loved arranging the products and talking to my customers. It was a very innocent period in my life, looking back. Things were very much simpler then, there was a purity about it. You want this thing that I have? You pay me, you can have this thing. Easy peasy.

There is a dangerous side to fairs though. You always run the risk of buying something that you love at the time, but then regret instantly afterwards, but you can´t take it back can you? NO. You can´t, it’s far too embarrassing. And we must make sure that we support our local businesses and craftspeople especially at Christmas. Please don´t buy online, get down the high street and buy something from an actual real life person and not some automated computer. Keep the money moving in your local economy and look after the people in your community, it´s vital.

I imagine that selling on a market could be a hard way to make your living, but I bet it´s fun. I could see myself as a chirpy cockney type selling discount ladies underwear, or perhaps I could be a mysterious Arab with fine spices and exotic silks. As it is, I am writing this from bed, It is too cold in my house to be anywhere else but here. If I am such a wuss that I can´t deal with a bit of cold in my own home how do we think I would manage rising at 5am and setting up a market stall? Yep, disaster.  Which is why the “Last Minute Handmade Christmas Market” which I am organising at Mood Beach for December 22 and 23 will start at 11am and finish at 4pm, a healthy time during the day. If you want to have a stall then please get in touch at Vicki@moodbeach.com.

Also coming up there is the Calvia Christmas fair which is not in Portals anymore, but has moved to Santa Ponsa, that is on December 9th and will feature the choir in their debut performance! (They´re also going to perform on the 22nd at Mood). Then there is one at Santa Ponsa Country Club the next weekend on the 15th and 16th of December, and the same weekend sees the return of the Alaro Christmas Market as well.

In the meantime I am planning my takeover of the world from under the duvet, at least for today. http://www.familymattersmallorca.com

Baby Blues

In the words of Alanis Morrissette, isn’t it ironic? Here we are celebrating the birth of a child 2000 years ago who was born to a poor family, and the Spanish government are in the process of taking away the ‘baby cheque’ for new arrivals born into similarly poor families.

If you know of someone who is heavily pregnant and due any day now don’t be surprised to find them chugging down curry, riding up and down in cars with bad suspension on bumpy roads and clearing out the local Farmacia’s stocks of castor oil. If you can deliver your bundle of joy by December 31st then you will still receive a rather tasty handout from the government of 2’500€, but after that? Sorry, no dice. Apparently gynaecologists have been hearing many pleas for birth inducement and tales of hardship, and we can only speculate how many midwives will not be able to tell the time when it comes to births on New Year’s Eve. Imagine delivering your baby one minute past midnight and knowing you’d missed out on enough money to keep your family going for a couple of months. (To pile irony on top of irony, by the way, not only did Sir Elton and David became proud fathers, Alanis also became a mum on Christmas Day).

Then we also have the old-new problem of bills: energy charges are about to ramp up another 10%, it is cold in Mallorca right now and babies need to be kept  warm and cosy. I have a friend who works in a soup kitchen in Palma, she’s told me about more and more Spanish people queuing for food, whereas before it was more likely to be immigrants from South America or Africa who needed some help. It’s all looking a little bit bleak isn’t it? How can we turn this around and make 2011 a year to look forward to? I’m a great fan of resolutions, but I won’t bore you with my (very predictable) resolutions, although having just spent some time in the wilds of France I can tell you that the ban on smoking in bars will definately work much better in the North of Europe than in the South. It’s far too cold to pop outside for a grouty round here, so I predict lots of people will either a) give up smoking all together or b) go into business as patio heater sales people and make a fortune.

It’s a bit of a sad way to end the year I think, and it looks as if we will all have to find new ways to survive and keep going in the next one. Sticking together, being inventive, working hard and keeping a smile on your face sounds a bit ‘jolly hockeysticks’, but I honestly don’t know any other way of doing it. But, hey, if you are pregnant then congratulations, and let’s be honest, when you’ve just given birth to your brand new baby would it even pop into your mind that you’d missed out on a handout when you’d just won the lottery?

www.facebook.com/vicki.mcleod

 

The idiot's guide to the economy by Oliver Neilson

Economic rule number one applies to more or less everything not just money and oil.

Supply and demand, if a market (sugar, oil, money, cars, anything) has loads of supply but not many buyers, the sellers drop their prices.(buyers market). If a market has low supply, and high demand, prices rise as buyers effectively bid up the price (think ´Playstations just before Christmas)

CREDIT CRUNCH

The World economy is driven mainly by banks having cash reserves and lending it to each other and their customers, this is called LIQUIDITY

Over the past decade mainly US banks lent massive (100%+) mortgages to customers with low credit ratings, these are called SUB PRIME MORTGAGES.

Dealers for the banks sold these debts to other banks in the form of mortgage backed bonds this process is called DEBT REPACKAGING. They were bought by banks and investment funds and pensions all over the world (including UK and Spanish banks) who did not sufficiently understand the risks.

When large amounts of the sub-prime mortgage customers began to default on their mortgages the house prices fell meaning that the banks did not have enough money when the repossessed houses were sold.

The losses have amounted to trillions of dollars world wide. As a result the banks did not have enough money to lend to their customers or to other banks (they lacked LIQUIDITY), as a result, banks that rely on market liquidity (like Northern Rock) found their supply cut off. (e.g. you are a green grocer, you buy veg wholesale and sell it retail and keep the difference, if the veg wholesalers have no veg, you are in trouble). This lack of liquidity is called the CREDIT CRUNCH….So banks can´t lend morgages, people can´t buy houses, so sellers have to drop their prices if they want/have to sell QED house prices fall.

OIL PRICES

Oil is limited and running out, all the easy (cheap) to extract oil has been dug up and sold years ago. New oil reserves are harder (more expensive) to get to, so the suppliers factor this into the cost.

There is plenty of oil left to drill world wide but it is increasingly expensive to get at (under ice sheets etc) and at today’s prices, it is too expensive to make a profit out of, as prices go up, it then becomes economic for the oil companies to get at.

However the biggest factor pushing up oil prices are is the development of India, China and other developing countries. They are basically going through their own Industrial Revolution with people leaving the fields and heading for the towns in their 10´s of millions every year. An urban dweller uses 3.5 times as much oil as an urban dweller.

So with demand and supply rules in mind, there is a limited supply of oil, and loads more people want it, so up go the prices, and give or take, they will keep doing it, THIS IS NOT A TEMPORARY EFFECT. (until we can find alternative energy sources, solar, wind hydrogen or whatever). The price of everything (I mean that) in the world is affected by the price of oil, (example, of a factory making anything you like. factories run on electricity which is going up because its mainly made with oil, their employees probably drive to work and will want a pay rise as petrol is getting more expensive, all of their components will be trucked in, all their products will be trucked out to a distributor and retailer, who use electricity, and employees drive to work…..etc)

All of these increases in a company’s costs get passed on in the prices they charge to their customers. Rising prices are called INFLATION (this type of inflation is called COST PUSH INFLATION.

FOOD PRICES

More prosperous people in the third world eat more food, and so increase demand, and push prices up. Food producers are also subject to COST PUSH INFLATION as above, this also pushes up prices, as does the fact that large areas of prime agricultural land are now being turned over to growing biofuel, thus reducing the land available for food production (reducing supply as demand is increasing, see rule number one)

Keeping up?, good, last bit for now.

Finance ministers (Chancellors) and central banks (Bank of England and European Central Bank) can raise or lower interest rates to speed up or slow down an economy.

Interest rates up: Loans and Mortgages get more expensive and savings get higher interest so people spend less, if they spend less, demand reduces and prices come down, (rule #1). PRO Inflation reduces, CONS people feeling skint suddenly see their mortgage go up, and the electorate think you are a mismanaging the economy.

Interest rates down: Cheap to borrow money, no point putting it in a bank as you don´t get any interest, PRO, people feel a bit better off, CON fuels inflation setting up economic stress for the future.

Result, Dammed if you do, dammed if you don´t .

Questions, just call.

Where the hell am I?

I’ve been feeling a little under the weather recently. Not sick exactly, just not on top of my game.

Perhaps it’s the sunshine. Or the enormous amount of Rosé that I seem to have to consume as soon as it gets hot.

I’m not sure. But after speaking to Tomas, my cultural correspondent for the show, I think perhaps, after all, it IS the sunshine. Tom used to live in Ireland, and hankers after the weather. I know, he needs his head examining doesn’t he? All that rain.

There’s a definate slump in activity as we slope towards the height of summer, and as the temperature rises you can expect a direct increase in shortened tempers and even shorter conversations.

I remember the first year that I lived in Mallorca: I watched in awe as my feet and ankles swelled whilst the temperature rose until I was immobilised by the heat. But since then it hasn’t really been a problem, I like it when it gets hot. But for some reason, this year, I can’t quite get it together. Amateur spiritualists have made suggestions that my moon is rising, my yang is in my yin, or I haven’t feng shuied my house to the nth degree, but actually I just think I’m a bit tired. But tired of what exactly?

It’s four years, last week, since I moved to Mallorca. I remember the hard work to get here, and the incredibly stressful drive through France and Spain with two hyperventilating cats, and then the overwhelming relief I felt when I finally got onto the ferry at Barcelona to make the final leg to Mallorca. It all sounds really romantic when I write it, but the actual reality is that living in Mallorca is tough. It’s not all Place in the Sun and moving documentaries. Sometimes it’s not much fun at all. At the moment we’re all starting to worry about the economy both here and in the UK.

Estate agents can’t quite bring themselves to admit that the low to mid range of properties are not moving as fast as they would like them to. Building companies are going bust left, right and centre. A plumber from the UK just bought Mallorca’s football team because it had to be sold due to the insolvency of its chairman. What the hell is going on? And what should we be doing?

Have we shot ourselves in our collective feet? Did we burn too many bridges? We’re committed to Mallorca, but is Mallorca committed to us?

I feel a theme of the week coming on.