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Itchy |
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Itchy Super Spammer
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Posted: 17:06 - 13 Dec 2016 Post subject: |
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mpd72 wrote: | Maybe I'm missing the gist here, but it's a buyers market. |
When trade is unequal then the country with the trade deficit has to shrink their economy in order to pay for the goods and services. Shrinkage comes via increases in debt and the money needed to service it. Or by actual being bought out. A PRC company this week is buying up the National Gas grid this week btw.
Germany has been doing this to the rest of the EU. The East has been doing this with the rest of the world. The British Empire did this with the rest of the world too.
mpd72 wrote: |
China is screwed if big Western economies reduce their dependence on buying Chinese goods. Their economy is slowing down quite a bit already. |
This hasn't been the case since 2011. When the PRC stopped buying US T-bills and has actively started dumping them.
The opposite is true actually. IIRC you're around 45 or something right? At 45 you should remember the presence of Radio Rentals on the high street. Radio rentals existed to rent people radios and televisions. These before 1999 were expensive high end consumer goods. Back in the 90s a 28inch CRT TV cost £300 or more. In the 80s it cost even more than this. So people rented them.
Radio Rentals went kaput in 2003 as few people rented televisions. They instead bought as it made more economic sense. The flurry of cheap consumer goods from the PRC meant inflation was heavily suppressed as it was exported to the PRC.
This ties in with the worst quality of life report recently. While a lot of people cited internet, TVs, phones etc. The things you NEED (housing, education, legal services) cost more while the trinkets cost less.
So if the PRC stops importing goods. What happens?
PRC goes Turtle, again being 45 you will remember the issuance of credit cards and easy credit in the 80s and 90s. This was the western world going turtle. Debt rose massively from then to today. The PRC are preparing for this with socialised healthcare. Loosening of the one child policy.
If the western world stops importing goods, what happens?
All that inflation comes flowing back. It's simple to imagine ten oranges and ten pounds. So £1 each.
Ten pounds and one orange so the orange costs £10.
Now there are billions upon billions (increasing each time credit is used) in the economy. Suddenly remove 25% of those goods what happens. Remove 50%. Then remove 75% what happens?
Same money chasing fewer goods.
While somebody here might chime in and say factories can be built to counter this. Lead times exist. It takes time to build stuff, train workers and put in place machinery. A high inflation environment which would be caused by such an event would prevent all three of those things. ____________________ Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching. |
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Itchy |
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Monkeywrenche... |
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Monkeywrenche... Nearly there...
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gorillaonabik... |
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gorillaonabik... Nearly there...
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Posted: 19:19 - 13 Dec 2016 Post subject: |
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Rob Fzs wrote: | They are doing, plenty of Chnese brands about, doesn't mean shit if people want the Iphone branding, that is the beauty of added value production, someone can produce something exactly the same and as cheaply as they like, if it's not got the street cred people don't want it
You're mixing up commodities with added value products. |
So let's look at cars again and I just want to stick to facts: Car manufacturing is dominated by brands in countries with higher value currencies. The info on my earlier post demonstrates this is not economic theory but what happens in the real world.
This is generally replicated across manufacturing. The higher the value of the manufactured product, the more important the correlation is from a currency perspective.
So the idea that dropping the value of a free-floating currency to stimulate growth, all other things being equal, is generally false. Rather, it is clear that a high value currency creates an internal market which fuels the creation of higher-value products and services which are then be exported.
Just the prospect of Brexit has shaved approx 20% off our currency value. What will that do to British manufacturing and services and why? ____________________ FZR400 (blown engine), ZXR750 (blown engine), ZX6R (accident), CBR600 which had engine issues after which I learned to change gear..., CBR900, CBR924 (stolen), CB600, CB1300 (everything blew up), BMW K1300GT (written off, hit from rear while stationary), Bandit 1250 for a couple of months, Triumph Sprint ST 1050 (nicked) and somewhere in there, I wrote off a Ducati 748 at Cadwell. |
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Rob Fzs |
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Rob Fzs World Chat Champion
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Posted: 19:36 - 13 Dec 2016 Post subject: |
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gorillaonabike wrote: | Rob Fzs wrote: | They are doing, plenty of Chnese brands about, doesn't mean shit if people want the Iphone branding, that is the beauty of added value production, someone can produce something exactly the same and as cheaply as they like, if it's not got the street cred people don't want it
You're mixing up commodities with added value products. |
So let's look at cars again and I just want to stick to facts: Car manufacturing is dominated by brands in countries with higher value currencies. The info on my earlier post demonstrates this is not economic theory but what happens in the real world.
This is generally replicated across manufacturing. The higher the value of the manufactured product, the more important the correlation is from a currency perspective.
So the idea that dropping the value of a free-floating currency to stimulate growth, all other things being equal, is generally false. Rather, it is clear that a high value currency creates an internal market which fuels the creation of higher-value products and services which are then be exported.
Just the prospect of Brexit has shaved approx 20% off our currency value. What will that do to British manufacturing and services and why? |
Why does Germany do soo well then at exporting high value goods with a piss poor currency?
Not really sure of the point you're making as i know for a fact my dairy products are getting exported more since the devaluation, the IMF said our currency was 20% over-valued, so are they wrong aswell?! ____________________ '00 Aprilia RS50 > '92 Honda CG > '99 Yamaha Fazer > '91 Yamaha RXS > '79 Suzuki X5 > 01' Honda Cg > 07' Honda Cg > 82' Kawasaki Z200 > suzuki gsxr 400 gk73a > honda vfr 400 NC30> Yamaha RD350 YPVS F2 > Kawasaki ZZR 600 D1 > Yamaha TZR 250 2MA >Suzuki TL1000R > Yamaha TDR250 > Honda 929 blade > Suzuki SV1000 > Honda H100
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Itchy Super Spammer
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Kickstart The Oracle
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Posted: 22:47 - 13 Dec 2016 Post subject: |
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Itchy wrote: | mpd72 wrote: |
You think you see it, but then blindly ignore the 100 plus articles on Google telling you that you're talking sh1te. |
Funny that because your own beliefs are extremely flexible.
Oh Hillary will win, Brexit will win. But suddenly don't believe them when they don't fit into your point of view.
I've caught you numerous times doing this.
Like the nuclear power thread. Oh foreigners taking over the UK is bad. Yet in a few days later foreigners taking over things is GREAT.
Before this you said clearly to me that the Chancellor is more qualified than me or you about economics. Yet suddenly he doesn't support your position and suddenly he doesn't know what he is talking about.
So which position was it? He's more qualified or he isn't more qualified.
Or are you going to pretend you didn't hold those positions? |
Brexit did win ya big pillock!
Do the communist party manage to change the news you see, even in Manchester or where ever it is you live, even though you pretend it's China?
That could explain your denial of the slowing Chinese economy, comrade! ____________________ TZR250 2MA road, TZR250 1KT road, TZR250 2MA race, TDR250, YZF-750R Boost colours.
Jaguar S Type 3.0 V6 Sport R, VW Transporter T5 GP LWB Shuttle 140ps DSG. |
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pinkyfloyd |
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Itchy |
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Itchy Super Spammer
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Posted: 23:28 - 13 Dec 2016 Post subject: |
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Yawn are you still trying clever?
This doesn't change the fact that you keep shifting your position and you think people won't spot you or call you out on it. I've called you out many times yet you deny it.
You claim both sides are good yet at the same time both sides are bad. Oh devaluation is good, oh look it's gone back to where it was. So wait devaluation is good yet appreciation is also good? Which one is it?
It's almost like the chocolate ration keeps being increased every week. ____________________ Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching. |
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gorillaonabik... |
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gorillaonabik... Nearly there...
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Posted: 09:37 - 14 Dec 2016 Post subject: |
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Rob Fzs wrote: | Why does Germany do soo well then at exporting high value goods with a piss poor currency?
Not really sure of the point you're making as i know for a fact my dairy products are getting exported more since the devaluation, the IMF said our currency was 20% over-valued, so are they wrong aswell?! |
Excellent, these are good questions.
So let's look at facts, not 'economic guesswork' for just one of these areas which fits the 'economics 101' model I wrote about.
There is an extremely strong correlation which becomes more powerful, the higher the value of the manufactured product with a couple of exceptions. So the higher the level of the currency, the higher the stronger the internal market which then leads to higher value exports.
However, countries with lower, relative value currencies focus on lower value products. e.g. dairy.
So let's just take one of your points. Where a currency devaluation occurs, the country becomes unable to compete in the 'higher value' manufactured product arena. The internal market focuses on lower value products but which are then exported due to external demands (all other things being equal).
However, lower value products, as you can see, become more expensive internally as manufacturers are exporting. As the country starts to export these products, the expense for the internal market increases so countries are hit with a double whammy:
- Inability to compete at higher levels of manufacturing
- Lower value manufactured products becoming more expensive
So yes, a very good point that lower value products are becoming more expensive internally and not just because of importation.
Can you tell me why these two, observable, 'real world' economic effects take place? ____________________ FZR400 (blown engine), ZXR750 (blown engine), ZX6R (accident), CBR600 which had engine issues after which I learned to change gear..., CBR900, CBR924 (stolen), CB600, CB1300 (everything blew up), BMW K1300GT (written off, hit from rear while stationary), Bandit 1250 for a couple of months, Triumph Sprint ST 1050 (nicked) and somewhere in there, I wrote off a Ducati 748 at Cadwell. |
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Rob Fzs |
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Rob Fzs World Chat Champion
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Posted: 11:05 - 14 Dec 2016 Post subject: |
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gorillaonabike wrote: | Rob Fzs wrote: | Why does Germany do soo well then at exporting high value goods with a piss poor currency?
Not really sure of the point you're making as i know for a fact my dairy products are getting exported more since the devaluation, the IMF said our currency was 20% over-valued, so are they wrong aswell?! |
Excellent, these are good questions.
So let's look at facts, not 'economic guesswork' for just one of these areas which fits the 'economics 101' model I wrote about.
There is an extremely strong correlation which becomes more powerful, the higher the value of the manufactured product with a couple of exceptions. So the higher the level of the currency, the higher the stronger the internal market which then leads to higher value exports.
However, countries with lower, relative value currencies focus on lower value products. e.g. dairy.
So let's just take one of your points. Where a currency devaluation occurs, the country becomes unable to compete in the 'higher value' manufactured product arena. The internal market focuses on lower value products but which are then exported due to external demands (all other things being equal).
However, lower value products, as you can see, become more expensive internally as manufacturers are exporting. As the country starts to export these products, the expense for the internal market increases so countries are hit with a double whammy:
- Inability to compete at higher levels of manufacturing
- Lower value manufactured products becoming more expensive
So yes, a very good point that lower value products are becoming more expensive internally and not just because of importation.
Can you tell me why these two, observable, 'real world' economic effects take place? |
Let's start with the facts, post an independent report to back your 'observations' up.
You still have no answered why any of this has to do with branding, your boring texas sharp shooter fallacy doesn't hold up, when you say 'certain exceptions', you seem to jump about on to some other inane question when i stamp on you.
We produce high value, mostly branded goods here, that gets away from the commodities market, such as dairy, which is a main commodity, yet i'm still getting more exports for my dairy, inputs might have gone up, but if you're putting in more than you put out, you're getting less anyway, the same goes for any business, more so if they're making an value added product.
Your assumption is, that these products will become dearer in the home market, because people won't grow their business's anymore and there will be a shortage pushing prices up in the domestic market, find me a business that doesn't want to expand and grow and don't come with some crap about the 1970's , as credit is as cheap now as it ever has been and everyone is looking to grow. ____________________ '00 Aprilia RS50 > '92 Honda CG > '99 Yamaha Fazer > '91 Yamaha RXS > '79 Suzuki X5 > 01' Honda Cg > 07' Honda Cg > 82' Kawasaki Z200 > suzuki gsxr 400 gk73a > honda vfr 400 NC30> Yamaha RD350 YPVS F2 > Kawasaki ZZR 600 D1 > Yamaha TZR 250 2MA >Suzuki TL1000R > Yamaha TDR250 > Honda 929 blade > Suzuki SV1000 > Honda H100
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adriansk |
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adriansk Nova Slayer
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Rob Fzs |
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Old Thread Alert!
The last post was made 7 years, 136 days ago. Instead of replying here, would creating a new thread be more useful? |
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