Spain Records First Trade Surplus Since 1971 – Proving Once Again

If You Destroy the Ability to Buy Imports – Imports Will Fall

Spain is undergoing what economists term ‘internal devaluation’.  Because its currency is the Euro, it cannot gain competitiveness in the world economy by devaluing its exchange rate.  So the country is left with devaluing its people, driving down wages and creating massive unemployment.

This works, of course on the econmics (assuming you are willing to ignore the huge human suffering, which European leaders are willing to do.) For example, if you make it such that the populace has no income with which to buy imported goods, they will not buy imported goods (Insights like this are what made this Forum the expert it is today).  That is what has happened in Spain.

Spain posted its first monthly trade surplus on record in March as imports slumped, after government budget cuts undermined domestic demand.

The country’s trade balance in March swung to a surplus of 634.9 million euros ($818 million) from a deficit of 1.18 billion euros in February and 3.2 billion euros a year earlier, data released today by the Trade Ministry show. That is the first surplus since records began in 1971, Deputy Trade Minister Jaime Garcia-Legaz said at a press conference in Madrid.

The Spanish government of course hails this as some type of success story.

“Products made in Spain are replacing imports,” said Garcia-Legaz, who forecast the surplus will continue to grow. “That means products made in Spain are better and we are creating jobs inside Spain instead of outside Spain.”

And that creating jobs thing?  Well if you don’t look at Spain’s unemployment rate and growth in the number of people out of work, well maybe you can convince yourself that is true.  But in the real world . . . .