Looming recession

[david and julie]

So the sterling pound is good for exporters.

 

Pre-Euro, my father used to import components from the UK, sometimes a million pounds worth in one order. He learned to live with fluctuating exchange rates which sometimes ravaged the profitability of a deal. Then along came the Euro and he began to enjoy the stability of dealing with his non-UK foreign suppliers who also worked in Euro. Realising that the British supplier sourced some of their components from the Netherlands, he approached the UK supplier and asked if they could keep this part of the deal in Euro, ie: ship direct to him from Holland but keep the UK company in the deal. "Oh no, we are a British company, we deal only in the Queen's Sovereign Pound" he was told. So he went to a trade show in Germany, found new Euro suppliers and never bought another Sterling Pound product ever again. The British supplier went bust a few years later. The British disease.

The buyer found the product cheaper so changed. He would have been a mug to give a third party company a cut when he didn't need to.

 

The truth about the Euro is that at the moment its doing well in relation to the pound, but this wasn't always the case. Pro Europeans are trying to have us believe we would starve if we don't change to the Euro. We may indeed starve, but Gordon doesn't need the Euro's help, he's doing OK on his own.

[WJM]

"The buyer found the product cheaper so changed. "

 

 

The UK company made the rest of the components that completed the final product, so carving them out and retaining the same product was never an option.

 

Wrong - it wasn't that it was cheaper, it was because the constant shifting of currency exchange rates turned a simple business deal into an exchange rate gamble. With bad luck an entire deal could have lost all it's profit. Yes, with good luck it could have doubled the profit, but if he wanted that kind of excitement he could have gone to the bookies, or their suited brethren in the city.

 

The UK company felt the domestic market was enough for them. Unfortunately it wasn't. They went bust despite having a good product. In this example, the Euro simply enlarges the domestic market to include... Europe, currently an overseas foreign export market. The price was good, the product was good, the business relationship was good - and all had been for the twenty odd years he had been buying from them. Sterling killed it all, including the supplier.

Edited January 29, 2009 by WJM

[chris w]

"

 

The UK company felt the domestic market was enough for them. Unfortunately it wasn't. They went bust despite having a good product. In this example, the Euro simply enlarges the domestic market to include... Europe, currently an overseas foreign export market. The price was good, the product was good, the business relationship was good - and all had been for the twenty odd years he had been buying from them. Sterling killed it all, including the supplier.

Seems totally nuts that the company refused to deal in Euros as a British company. They can buy forward on the Euro and so have a fixed exchange rate which they could then factor into the price. No currency risk for either side.

 

Chris

 

Exactly! We have had it too easy for too long and its high time, that as a nation, we got off our backsides and started making things ourselves instead of expecting everyone else to do it for us.

 

There's one simple reason why we can't do that....... we could never make the goods at the price level which people have come to expect. Read "Comparative Advantage" by Michael Porter.

 

Chris

[WJM]

"Seems totally nuts that the company refused to deal in Euros as a British company. They can buy forward on the Euro and so have a fixed exchange rate which they could then factor into the price. No currency risk for either side"

 

 

 

Yip - and now they are bust. I have other examples of the same process in other industries too. People need to shed this imperialistic 'Rule Britannia' mentality. The Euro-zone is doing ok- in comparison we are floundering. And I never met a French/German/Italian.... who feels sad at the loss of the Franc/Mark/Lire... It is just history, who cares. Why not lament the Groat!

 

The tabloid newspapers are too powerful in this country, whipping up baseless xenophobia to serve the narrow short-term needs of their owners. The british people need to start seeing themselves as empowered citizens, not loyal subjects. The days of serfdom are over.

 

 

 

===================================================================

 

"we could never make the goods at the price level which people have come to expect"

 

We can when the Japanese or the Germans manage the factories. Why is that?

Edited January 29, 2009 by WJM

[gaggle]

I doubt anyone posting on this thread is yet starving and homeless , the world is not ending , you just wont be able to satisfy the want for more and more money and goods you do not really need. A roof over your head and basic food supply , anything else is a bonus , you wont die without the extra and even if you did i have never seen a body left up top.

hard times my arse.

[david and julie]

Europe, currently an overseas foreign export market.

That should read - Europe, always was an overseas foreign export market. Despite what the EU would have us believe the nation states of Europe have always traded with each other, regardless of currency.

 

I'm not suggesting Gordon knows what he's doing - far from it - but I'm just not convinced that changing to the Euro and the even bigger talking shop that involves, will make things any better. I believe we have far to many bureaucrats and civil servants, be they in the UK or the EU. We need to get rid of some of these hangers on if we want to get out of this mess. A perfect example must be Mandleson FFS.

http://news.bbc.co.uk/1/hi/uk_politics/7666482.stm

 

Hypothetical scenario. For some totally unexplained reason the US suddenly becomes our biggest export market, would you then advocate we change currency to the dollar?

[carlt]

Hypothetical scenario. For some totally unexplained reason the US suddenly becomes our biggest export market, would you then advocate we change currency to the dollar?

A comet wipes out China?

 

Read "Comparative Advantage" by Michael Porter.

"Competitive Advantage", btw.

[Guest]

I doubt anyone posting on this thread is yet starving and homeless , the world is not ending , you just wont be able to satisfy the want for more and more money and goods you do not really need. A roof over your head and basic food supply , anything else is a bonus , you wont die without the extra and even if you did i have never seen a body left up top.

hard times my arse.

 

Absolutely spot on Gaggle. We don't know we are born.

[journeyperson]

There are still many areas where Britain and British designers/workers can excel - we may not always need to go back to our historical manufacturing roots if we are prepared to exploit our skills in new fields.

 

We are still sitting on a hell of a lot of coal and since most of the rest of the world is still building coal fired power stations I think we should start getting it out of the ground again to sell.

 

 

On the subject of fields, despite a vast increase in our population, the nation's farmers are now producing a much higher percentage of our daily food requirements than they were in the 1930s.

 

I read yesterday that agriculture now accounts for 1.18% of our GDP.

[Guest]

We are still sitting on a hell of a lot of coal and since most of the rest of the world is still building coal fired power stations I think we should start getting it out of the ground again to sell.

We will need the Milk Snatcher's permission in order to extract coal from the ground.

[journeyperson]

I read yesterday that agriculture now accounts for 1.18% of our GDP.

 

 

Sorry, I remembered wrong, I've just checked, it is 0.7% of GDP

[carlt]

We will need the Milk Snatcher's permission in order to extract coal from the ground.

I think there's one more hole the miners will have to dig, before the pits reopen but they'll all be glad to pick up a shovel to bury her.

 

I'm definitely going back home to Doncaster for that party!

[Steilsteven]

That should read - Europe, always was an overseas foreign export market. Despite what the EU would have us believe the nation states of Europe have always traded with each other, regardless of currency.

 

I'm not suggesting Gordon knows what he's doing - far from it - but I'm just not convinced that changing to the Euro and the even bigger talking shop that involves, will make things any better. I believe we have far to many bureaucrats and civil servants, be they in the UK or the EU. We need to get rid of some of these hangers on if we want to get out of this mess. A perfect example must be Mandleson FFS.

http://news.bbc.co.uk/1/hi/uk_politics/7666482.stm

 

Hypothetical scenario. For some totally unexplained reason the US suddenly becomes our biggest export market, would you then advocate we change currency to the dollar?

 

The ideal would be the same currency world wide.That, at least, would put an end to our lives being disrupted by the faceless dealers.

 

Of course we should join the Euro, we are Europeans! Staying out is as daft as having different currencies for each of our counties.

I haven't yet heard any form of reasonable argument for keeping the Pound.Please don't give me the one about giving more control to the E.U., it's a weak and unfounded point of view.I'm sure the Irish would confirm that.

Talking to a business man in The Netherlands a couple of years ago, I got the impression that he thought it comical that we hadn't joined and we must like making our lives difficult.

I tend to think he was right.

 

Keith.

[Guest]

The ideal would be the same currency world wide.That, at least, would put an end to our lives being disrupted by the faceless dealers.

 

Of course we should join the Euro, we are Europeans! Staying out is as daft as having different currencies for each of our counties.

I haven't yet heard any form of reasonable argument for keeping the Pound.Please don't give me the one about giving more control to the E.U., it's a weak and unfounded point of view.I'm sure the Irish would confirm that.

Talking to a business man in The Netherlands a couple of years ago, I got the impression that he thought it comical that we hadn't joined and we must like making our lives difficult.

I tend to think he was right.

 

Keith.

We still use £/s/d in Lancashire mate

[chris w]

"Competitive Advantage", btw.

WRONG AGAIN.

 

He also wrote one called COMPARITIVE ADVANTAGE. I know cos I've got the book. Comparitive advantage is all about why certain conunties should make certain things and leave other countries to make different things. In simple terms, Scotland is a great place to make whisky but not wine and vice versa for France.

 

Chris

[andywatson]

The ideal would be the same currency world wide.That, at least, would put an end to our lives being disrupted by the faceless dealers.

 

Of course we should join the Euro, we are Europeans! Staying out is as daft as having different currencies for each of our counties.

I haven't yet heard any form of reasonable argument for keeping the Pound.Please don't give me the one about giving more control to the E.U., it's a weak and unfounded point of view.I'm sure the Irish would confirm that.

Talking to a business man in The Netherlands a couple of years ago, I got the impression that he thought it comical that we hadn't joined and we must like making our lives difficult.

I tend to think he was right.

 

Keith.

 

On the other hand:

 

One reason for the rampant property inflation (worse than here) in Ireland was that being in the Euro their government was unable to raise interest rates to control it.

 

The "Club Med" countries with weaker economies are unable to make adjustments against the stronger ones such as Germany.

This is one reason for the present trouble in Greece.

 

Many Germans lament the passing of the Dmark and reputedly even avoid Euros with italian serial numbers.

(Just in case).

 

The EEC has yet to produce a set of auditable accounts depite many years of trying and threatening whistleblowers

 

 

For the record I have lived and worked in Europe. I think some aspects of their outlook, lifestyle and culture are great

(Beethoven, the Tour de France, Pilsner) but I wouldn't trust an EEC politician any more than the faceless dealer above.

[carlt]

WRONG AGAIN.

 

He also wrote one called COMPARITIVE ADVANTAGE. I know cos I've got the book. Comparitive advantage is all about why certain conunties should make certain things and leave other countries to make different things. In simple terms, Scotland is a great place to make whisky but not wine and vice versa for France.

 

Chris

Keep digging sir.

 

You give me an ISBN number and I'll believe you.

[gaggle]

[quote name='journeyperson' date='Jan 29 2009, 06:27 PM' post='326340

 

 

I read yesterday that agriculture now accounts for 1.18% of our GDP.

 

 

that will be skunk ,home grown.

[chris w]

Keep digging sir.

 

You give me an ISBN number and I'll believe you.

Hre's a reference to it: clicky

 

here's another reference to it in this document (see references on page 37) clicky 2

Edited January 29, 2009 by chris w

[david and julie]

Talking to a business man in The Netherlands a couple of years ago, I got the impression that he thought it comical that we hadn't joined and we must like making our lives difficult.

Funny that, I spoke to a Spanish guy on holiday and he regretted the change because everything had gone up in price.

 

Anyone any idea if the EU bureaucrats who invented this magic, save us all, currency, have actually managed to submit any accounts yet?

[carlt]

clicky

Well done!

 

You've googled a typo:

 

[chris w]

Well done!

 

You've googled a typo:

 

.....and another typo I guess (see page 37 "References") clicky

 

Unfortunately, I'm not at home to lift it off the shelf.

Edited January 29, 2009 by chris w

[gaggle]

google the real one for us chris luv.

[carlt]

Chris, if it exists, show me an ISBN number and I will show you that it matches the book cover, above.

 

Two typos amongst a list of thousands of google results (stating "competitive") does not prove your point.

[carlt]

google the real one for us chris luv.

He already has!