Price Indexing and Economic Politics

1. I wonder if sometime in the future the price index theory will have to be rewritten or deeply readjusted: A German woman whom I met in Paris is greatly pleased with her studies there, yet she complains about the cost of living. She suggests that a good point of comparison is canned soda, which in Germany sells for about .75 euros while it averages nearly 3 euros and is around 4.50 euros plus tips in restaurants and upscales places, in general. Price indexing has been one of the bottlenecks the euro had to confront in its early stages and cause both cultural and socio-economic tensions in relation to commodities such as gas and oil, and was a factor is the French nay vote over the EU constitution. I believe that the price of gas was cheaper in countries, such as Spain, and much more expensive in Germany; therefore, making a budget to travel driving your own car or by renting a car may not be an easy task. As I recall from my study on money exchange, in the earlier stages the euro was weaker against the Japanese Yen and the dollar when not existing as actual notes, currency bills or hard coins. This has made it more difficult for other currencies such as the American dollar and British pound to take any advantage from the real diversity of values of the euro in each one of its instances. In relation to the soda market, almost a clear duopoly, as initially described by Cournot, it clearly suggests that the euro has brought great economic tensions and that working towards leveraging the prices to a more realistic value could objectively improve the economic politics in the international landscape. This is so certain that historically money exchange can greatly affect developing countries, such as South American countries, but much more African nations, which have no realistic revenues from their exports or related investments. However, conversely it may benefit European investments in developing countries, some of which are using the euro as standard in lieu of the American dollar, in particular, in the hospitality business.

2. The irrationality seems to be taking care of the South American politics and diplomacy. While Venezuela has been widely investing in war aircrafts and other related hardware for quite sometime, it is probably neglecting that a few years from now oil may become a deprecated commodity due to disrupting technologies. With the current comprehensive research on bio-fuels, solar, and other termal forms of energy, and the development of electric vehicles and other relevant powering technologies, it is quite likely that there will be less demand for oil and that this commodity will become part of a vertical specialized market rather than as it exists today, widely horizontal. Rather than warefare, I wish that there is more thought towards the planning of a country whose educational system is slightly below the average South American country as I have directly learned from friends and relatives who have had the learning experience there. My greatest concern is that the name of the economic system should no longer be an issue to disrupt the world peace. Even presidents Reagan and Gorvachev had the opportunity to fingerpoint one-another in relation to the positive and negative aspects of each system. The point is that the world needs more rational leaders and fewer arrogant dictatorships or alike. Indeed, I also believe that democracy should prevail over the socio-economic system itself.