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thepeel
Joined: 08 Aug 2004
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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 Posted: Tue Nov 27, 2007 7:08 pm Post subject: |
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| A weak dollar stimulates exports. The Korean government does this all the time. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Tue Nov 27, 2007 7:15 pm Post subject: |
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Oh yeah! How did I forget that?
Do you remember the economic pain when American went from a manufacturing economy to a consumption/services economy? A little town called Flint had a film or two made of it. Well, the switch back is going to be WORSE. Much worse.
Also, you're simply, totally and fully wrong. Let's discuss why (yata's macro lesson for today).
We live in a globalized world economy. When country "x" manufactures something it does so with resources and unfinished goods imported from country "y". When you have a country that is as high on the value chain as is the USA, virtually all finished goods for export or domestic consumption contain imports of unfinished goods or primary resources from other nations. If your currency is very weak, it is very expensive to import products from around the world and by this your exports actually don't get that much cheaper (all nations buy resources and unfinished goods from the same GLOBAL MARKETS) and your domestic consumption is lessened. Now, if you are China and you are low on the value chain, this isn't that big of a problem. If you are America, this means yata's silly analysis is simply wrong. |
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sojourner1
Joined: 17 Apr 2007
Location: Where meggi swim and 2 wheeled tractors go sput put chug alugg pug pug
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| Posted: Tue Nov 27, 2007 7:45 pm Post subject: |
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| If the dollar hits historic lows, this creates an economic environment for new factories as it will be cheaper to produce and American workers will be even more desperate for and willing to work for less just to survive as life gets more difficult for them. |
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blade
Joined: 30 Jun 2007
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| Posted: Tue Nov 27, 2007 10:53 pm Post subject: |
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| It certainly looks like the dollar is in a lot trouble at this point, so my question is how many other countries economies will it take down with it when and if it ceases to be the worlds main commodities currency? |
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mistermasan
Joined: 20 Sep 2007
Location: 10+ yrs on Dave's ESL cafe
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| Posted: Wed Nov 28, 2007 12:08 am Post subject: |
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back home my brothers are all union electricians. they say things are going better than at any time since the 1960's. this is in southern illinois (where there has been no manufacturing for awhile now).
something is cooking. |
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keane
Joined: 09 Jul 2007
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| Posted: Wed Nov 28, 2007 3:47 am Post subject: |
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| mistermasan wrote: |
back home my brothers are all union electricians. they say things are going better than at any time since the 1960's. this is in southern illinois (where there has been no manufacturing for awhile now).
something is cooking. |
In what industry? An important point. Keep in mind, also, that even in a big recession a lot of people's lives are never really affected seriously. It's a big economy and the downturn is just getting started. |
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mistermasan
Joined: 20 Sep 2007
Location: 10+ yrs on Dave's ESL cafe
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| Posted: Wed Nov 28, 2007 4:13 am Post subject: |
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| a new fuel refinery (hasn't been one of those in many moons) and new ethenol plants are the biggies. it remains to see what kind of trickle down there will be. |
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keane
Joined: 09 Jul 2007
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| Posted: Wed Nov 28, 2007 4:35 am Post subject: |
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Financial Sense News Hour, Nov 23, 2007
Haven't watched it yet, but this comment
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| It's interesting that this week The Financial Sense Newshour is calling for a total collapse of the world fiat fueled economies. |
was found with the link. If anyone has time, do fill us in. If I find time, will do the same. |
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Leavingkorea
Joined: 27 Apr 2007
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| Posted: Wed Nov 28, 2007 8:23 am Post subject: |
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Also, you're simply, totally and fully wrong. Let's discuss why (yata's macro lesson for today).
We live in a globalized world economy. When country "x" manufactures something it does so with resources and unfinished goods imported from country "y". When you have a country that is as high on the value chain as is the USA, virtually all finished goods for export or domestic consumption contain imports of unfinished goods or primary resources from other nations. If your currency is very weak, it is very expensive to import products from around the world and by this your exports actually don't get that much cheaper (all nations buy resources and unfinished goods from the same GLOBAL MARKETS) and your domestic consumption is lessened. Now, if you are China and you are low on the value chain, this isn't that big of a problem. If you are America, this means yata's silly analysis is simply wrong. |
Wow, that is overly simplistic approach that over looks some huge economic concepts that clearly argue against what you just wrote (BTW you also mixed in micro economic ideas there). Perhaps you should retake that Economics course? Some things I suggest you learn more about: economic efficiency, economies of scale and especially comparative advantage. |
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keane
Joined: 09 Jul 2007
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| Posted: Thu Nov 29, 2007 12:55 am Post subject: |
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| Leavingkorea wrote: |
| Wow! That is an overly simplistic approach that overlooks some huge economic concepts that clearly argue against what you just wrote (BTW, you also mixed in microeconomic ideas there). Perhaps you should retake that Economics course? Some things I suggest you learn more about: economic efficiency, economies of scale and, especially, comparative advantage. |
Stay in the oil patch, oil patch. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Nov 29, 2007 1:37 am Post subject: |
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| Leavingkorea wrote: |
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Also, you're simply, totally and fully wrong. Let's discuss why (yata's macro lesson for today).
We live in a globalized world economy. When country "x" manufactures something it does so with resources and unfinished goods imported from country "y". When you have a country that is as high on the value chain as is the USA, virtually all finished goods for export or domestic consumption contain imports of unfinished goods or primary resources from other nations. If your currency is very weak, it is very expensive to import products from around the world and by this your exports actually don't get that much cheaper (all nations buy resources and unfinished goods from the same GLOBAL MARKETS) and your domestic consumption is lessened. Now, if you are China and you are low on the value chain, this isn't that big of a problem. If you are America, this means yata's silly analysis is simply wrong. |
Wow, that is overly simplistic approach that over looks some huge economic concepts that clearly argue against what you just wrote (BTW you also mixed in micro economic ideas there). Perhaps you should retake that Economics course? Some things I suggest you learn more about: economic efficiency, economies of scale and especially comparative advantage. |
What mistakes have I made? |
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keane
Joined: 09 Jul 2007
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| Posted: Thu Nov 29, 2007 2:29 am Post subject: |
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By a Thread
The New Experience of America's Middle Class
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...Middle-class families need to have:
* Financial assets sufficient to develop a safety net in case of job loss or serious illness, build a solid nest egg for a secure future and comfortable retirement, and help children get off to a good start toward economic security;
* The education necessary to find a good job in today's competitive global economy;
* Incomes that make it possible to afford quality housing and other essential living expenses; and
* Comprehensive, high quality, affordable healthcare for all family members to ensure that care is available when needed and that financial stability is not eroded in case of serious illness.
We have created a Middle Class Security Index that provides a comprehensive portrait of how well middle-class families are faring in each of these areas. This report, By a Thread: The New Experience of America's Middle Class, is the first report in a series to present findings using this new Index.
...If three or more of the factors in a family's profile supported financial health, we considered that family to be securely middle class. If three or more of the factors in a family's profile threatened that family's financial security, we considered them to be at high risk for slipping out of the middle class...
Overall Economic Security
* Only 31 percent of middle-income families match our profile for being securely middle class. That is, despite falling into the broad range that defines middle-class "income," fewer than one in three families has the necessary combination of other factors to ensure middle-class security.
* Our Index results vary by race. Thirty-four percent of white middle-income families are securely in the middle class, as compared to 26 percent of African-American middle-income families and only 18 percent of Latino middle-income families.
* One in four middle-class families matches our profile for being at high risk of slipping out of the middle class altogether.
* One in five (21 percent) white families is at high risk for slipping out of the middle class, as compared to one in three (33 percent) African-American headed households and an alarming two in five (41 percent) Latino families.
Lack of Assets
* More than half of middle-class families have no net financial assets whatsoever-that is, no financial assets or debt levels that exceed their assets.
* Only 13 percent of middle-class families have sufficient assets to meet three-quarters of their essential living expenses for nine months, should their source of income disappear.
* About four out of five middle-class families do not have sufficient assets to cover three quarters of essential living expenses for even three months should their source of income disappear. We defined essential living expenses as food, housing, clothing, transportation, health care, personal care, education, personal insurance and pensions.
* Middle-class families have a median debt of $3,500 and median net assets of $0.
Insufficient Income to Meet Living Expenses, Cover Housing Costs, and Buy Healthcare
* Twenty-one percent of middle-class families have less than $100 per week ($5,000 per year) remaining after meeting essential living expenses. These families are living from paycheck to paycheck with very little margin of security.
* In nearly one out of four middle-class families (23 percent), at least one family member lacks health insurance of any kind.
* Twenty-eight percent of middle-class families spend 30 percent or more of their income on housing expenses, putting them above federal guidelines for housing affordability.
Education
* Twenty-seven percent of middle-class families do not have any education beyond high school, placing them increasingly at risk in a rapidly developing global economy where higher education skills have become fundamental to achieving middle-class status... |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Thu Nov 29, 2007 2:46 am Post subject: |
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| thepeel wrote: |
Oh yeah! How did I forget that?
Do you remember the economic pain when American went from a manufacturing economy to a consumption/services economy? A little town called Flint had a film or two made of it. Well, the switch back is going to be WORSE. Much worse.
Also, you're simply, totally and fully wrong. Let's discuss why (yata's macro lesson for today).
We live in a globalized world economy. When country "x" manufactures something it does so with resources and unfinished goods imported from country "y". When you have a country that is as high on the value chain as is the USA, virtually all finished goods for export or domestic consumption contain imports of unfinished goods or primary resources from other nations. If your currency is very weak, it is very expensive to import products from around the world and by this your exports actually don't get that much cheaper (all nations buy resources and unfinished goods from the same GLOBAL MARKETS) and your domestic consumption is lessened. Now, if you are China and you are low on the value chain, this isn't that big of a problem. If you are America, this means yata's silly analysis is simply wrong. |
Cars isn't the only thing America exports. It exports movies, software, services. People come to America for tourism. They come to buy property. They come to buy companies. A low dollar creates a demand for dollars to buy all this. Then the market rights itself. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Nov 29, 2007 2:57 am Post subject: |
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Yes, you are right. But these things don't happen over night. The US economy is 70% consumption. The transition from consumptive to productive dominated economy is going to be very, very painful.
Also, the idea that just because the dollar is cheaper that therefore exports will magically start exploding is not even slightly scratching the full story.
David Friedman (Milton's son) describes an economy as follows (I'm paraphrasing). There are two ways to build cars. First, you can set up factories in Michigan and import the parts and build them. Or, you can send movies on ships to Japan and when the ships come back they will have cars on them.
The problem is that the ships came back from Japan/China with oodles of stuff on them, but far too often all that went over were little pieces of green paper. Now that green paper is coming back and the result will be inflation, huge jumps in unemployment and very low or negative growth. The world has been financing their own economic growth by keeping the dollar high to stimulate American consumer spending. This system is called Bretton Woods 2. And it is coming to an end.
This is a very complicated matter. The economic problems that America has in the next 18 months are massive. And the world isn't even close to being decoupled.
You don't just turn factories on. They have to be built, there has to be investment, you have to have a ready workforce. You don't just switch overnight! |
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