Wednesday, November 17, 2010

When To Send Out Birthday Invitations Six Weeks

Opinion: Would you sell your property at the price you bought it?

Published

By: Rafael Gonzalez

Tuesday, November 16, 2010

Still, one might ask, is there a market failure that could lead to the inefficient decision-making by economic agents involved in the sector, supply and demand ", the answer is that there could be materialized through the uncertainty of an inflationary process that raises prices and costs of goods, services and supplies. Is it the responsibility of the suppliers and demanders of the inflationary process in the country?, the answer is no. On the contrary, both are victims of this scourge, the responsibility of the National Executive, led by his wise or foolish in macroeconomic policy, fiscal and promoting economic activity. Both are victims because of the demand side there is no certainty on the final valuation of the property, which complicates decisions on purchasing, credit application and knowledge of their ability to pay over time. On the supply side, there is a risk exposure scenarios of changing costs and prices of inputs, even to the point that the possibility of transfer to the final price is compromised, not by an irresponsible regulation as instrumented the country, but the level of elasticity of demand, the level of "dispensability
The answer to this question lays bare the lack of logical consistency handle and penalties and punitive public policy advanced by the Executive against the private construction sector. In Venezuela, a country with the highest inflation in the planet, prices, market valuation and cost of goods and services are impacted by an upward adjustment process, which most people may not wish to accept or recognize, will certainly be present causing distortion and loss in purchasing power eroded wages and income Venezuelans. Returning to the question, if you sell your property now purchased at a price determined long ago, the purchase price, the loss of purchasing power of Bolivar, "believe that some other guy would do the same or something different? This is what happens to a good durable, that production-like performance, construction and completion of a building, it requires a period of time during which both inputs and the value of property varies over time. The crux of the matter is based on the ownership and financing of the property. Who holds the property on the operator who develops the production of good, confront the systemic and idiosyncratic risks of economic activity, financial activity and assume the incremental costs of inputs and processes-product of inflation and total stop or partially owned by the well built, can, limited by competition and the elasticity of demand transfer, at least partially and / or weighted, at prices the cost structures, including the remuneration of the economic-incentive business logic in any economic activity.
" good and the customer's payment capacity. Additionally, more skillful than the manufacturer to anticipate changes in prices and input costs, there is always lack of precision and accuracy in these estimates. Worse, in the case with prejudice just see the normal transfer of costs along the value chain. However, once there is such a social evil, inflation, "the solution is not part of the formation of prices or the recognition of their impact on the cost structure? First, prohibit the charging or consideration of inflation and cost increases in the prices does not solve the evil of inflation. Second, the "remedy" may be worse than the disease. Nobody decapitalize to finance economic activity which provides a well worth what you pay for it and what you pay is less than the cost of producing it. The destruction of incentives for economic activity in the construction could further compromise the possibility to reduce the national housing deficit, estimated at about 2 million housing units.
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