The Deflation Gripping Spain

Dog Chasing Tail

The Austerity measures in Spain have resulted in heaps of garbage all over the place as state workers go on strike for 11 days. Yes, Spain has been forced to layoff state workers and has planned to lay off 1,134 of 6,000 workers who clean the city and impose pay cuts on the rest. Those who cannot see the deflation should pay close attention. Spain has been cutting state wages in some cases by up to 40% to keep your job. As pensions rise, governments are realizing that they cannot replace the workers for there is not enough taxes to cover the bills. This whole thing is the OPPOSITE of hyperinflation. Established governments have historically moved into the deflation mode not hyperinflation. They turn against their own people killing the economy and it becomes merely a dog chasing his own tail until he collapses from exhaustion.