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Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. | ||
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WhiteDog
France8650 Posts
On April 14 2015 08:02 JonnyBNoHo wrote: Yes. Stop googling like a freshman and use your brain. I only google when I know I'm rght. Don't rage that much it's not good for you. You should be accustomed to being wrong at this point. | ||
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JonnyBNoHo
United States6277 Posts
On April 14 2015 08:08 WhiteDog wrote: I only google when I know I'm rght. Don't rage that much it's not good for you. You should be accustomed to being wrong at this point. You're viewing product creation very differently from how someone actually involved would. This is from a book on China's PRD region, and a part on its electronics industry: ![[image loading]](https://dl.dropboxusercontent.com/u/72070179/prd1%20%28320x260%29.jpg) Hopefully you can read this OK, but what a business does is not 'make a product' as if it were as simple as buying a finished good. There are many steps to the process and each is often separated out and organized to fit its needs and purpose. From the above, almost everyone uses China for the manufacture and assembly work, but other related activities may not be done there. Apple is no different. Now why China and not some other country is in part due to the dynamics of the electronics industry of which labor intensity, and labor cost is a part. To draw a comparison, Foxcon has revenues of $131B and GM has revenue of $156B. Foxcon employs 1.2 million workers, GM employs 0.2 million workers, or ~ 1/6 as many as Foxcon. So yes, electronics manufacture is labor intensive, and companies use low cost labor for those labor intensive industries. It doesn't matter that an iPhone as a whole doesn't require much labor relative to its final retail price. The manufacturing part does, and that's the part that is done in China. | ||
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Nyxisto
Germany6287 Posts
On April 14 2015 07:32 WhiteDog wrote: Take Germany ; they have a huge trading surplus, both for goods and services AND capital / finance. What they gain from goods and services, instead of investing it growing their own demand, they invested in spanish or greek debt, and gained more money through those capital assets. But it's a zero sum game at best because we're also the biggest risk carrier through all the stability mechanisms, and furthermore we lose these countries as future trading partners because their economy goes down the drain. To act like this is some kind of machiavellian plot as if we're gobbling up all the European countries by economic means is just ridiculous. | ||
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WhiteDog
France8650 Posts
Nyxisto how does Germany bear the risk ? I'm not saying it's a machiavellian plot, it's the normal game of capitalism. We, the french, did it a lot during the colonialism, where we basically bought half the world (and we still participate, to a lesser extent). The british did it even better. It's almost entirely risk free, because the financial market are made this way, and because all european institutions are ready to support and bought back all assets that would lose too much value, as the last crisis proved us. Who's the country that suffered from Spain's drawbacks ? Not really Germany. But if your point is that it is not sustainable in the long run because you need to grow their demand for your export oriented economy I totally agree. It's not at all a strategy from Germany, it's just the normal evolution of a country oriented to export and who refuse to reinvest what it gained in growing it's demand : they're not going to sleep with their money, so they invest it in foreign assets. | ||
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warding
Portugal2397 Posts
EDIT: About the capital account, capital flows to another country do benefit that country. In cases where the currencies between the two countries are different, then the returns on those capital flows still are only good for buying goods of that same country. In the long run then, we can expect X to be = to M. In cases where both countries share the same currency then the balancing mechanism will be prices in the two countries. You're never at a position where one country simply 'takes away' from the other country, it's kind of like chemistry. | ||
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WhiteDog
France8650 Posts
I know right, it's not chemistry, it's alchemy. | ||
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warding
Portugal2397 Posts
The explanation for China's high trade surplus is complicated and last I checked there was still debate. Currency manipulation some claim, poor credit markets in China, high saving rates. In Germany I guess that the currency is way undervalued for them and the high savings rate explain their high surplus. They should try to correct it for the sake of stability in the EU and they can do it through fiscal policy and raising wages - again, no need for protectionism. | ||
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WhiteDog
France8650 Posts
No it's not : it lower their relatif exchange rate, and they don't save them, they invest them in foreign capital. | ||
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warding
Portugal2397 Posts
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RvB
Netherlands6324 Posts
On April 14 2015 17:40 WhiteDog wrote: Benefit maybe, but considering that the return on capital investment is usually higher than growth, it mostly benefit the capitalists, and it does not balance out the balance. You can continue to invoke chemistry, facts are still there. How can you explain china ? germany ? We don't see a tendancy toward balance, but an increase of disparities since the crisis... I know right, it's not chemistry, it's alchemy. China is highly protectionist, closing off markets to foreign companies subsidising SOE's trough cheap bank funding and fixing the exchange rate. I don't see how you can use them as an argument that free trade causes their imbalance. | ||
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phil.ipp
Austria1067 Posts
On April 14 2015 19:45 RvB wrote: China is highly protectionist, closing off markets to foreign companies subsidising SOE's trough cheap bank funding and fixing the exchange rate. I don't see how you can use them as an argument that free trade causes their imbalance. everyone does this, china just does it more bluntly than everyone else. "free market" is a concept for third world (africa) and weak (europe) countrys to let the big ones USA and China exploit their resources (africa) and draw as much money out of the country as possible (europe), with that money they buy afterwards, real estate, companys, or give big credits for political influence, or just buy every land they get their hands on, like china does in africa. In China its the State itself, in america its the "free" corporations, which then are bound by laws like Patriot Act or Export limitations (intel for example cant export chips to china, cause the US government just suddenly decided). In the end its the same. So what this basically means is, we allowed through free trade a US Company to get the biggest Chip producer in the world, and now we know, when the US government feels in any way threatened or maybe we want to build a bigger super computer than the NSA has, then they just stop selling chips. And Europe is from one day to another in the fucking stone age. this game is so fucking obvious, its sad that many of you cant see that. the idea of globalization, full free trade is a good idea if there would be ONE government for the whole world. its obvious that the superpowers just abusing the system now to gain more and more influence. | ||
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WhiteDog
France8650 Posts
On April 14 2015 19:38 warding wrote: Invest in foreign capital, get back foreign denominated monies. No point in investing and getting back the returns on that if you're not going to spend it. Trade surpluses lead to an appreciation of your currency, not depreciation. Your point only have sense in the very long run. Trade surpluses lead to an appreciation of your currency YES, that is the mecanism that permit equilibrium, and not your rubbish about spending. The problem is, appreciation of currency is oftentime manipulated, and defined by intern questions (through the monetary policy of the central bank). On April 14 2015 19:45 RvB wrote: China is highly protectionist, closing off markets to foreign companies subsidising SOE's trough cheap bank funding and fixing the exchange rate. I don't see how you can use them as an argument that free trade causes their imbalance. Already adressed before. By the way : how do you think china sell all their goodies ? Thanks to low tariff.... | ||
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RvB
Netherlands6324 Posts
On April 14 2015 22:59 WhiteDog wrote: Already adressed before. By the way : how do you think china sell all their goodies ? Thanks to low tariff.... Where did you adres it, can you quote it? Obviously they want to sell their goods and don't restrict outgoing flows. That doesn't change the fact that they close of whole markets to foreign competitors. Tariffs isn't the only factor in protectionism. | ||
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RvB
Netherlands6324 Posts
(Reuters) - British Prime Minister David Cameron launched his party's pre-election policy manifesto on Tuesday, promising to deliver the "Conservative dream" of a home-owning democracy, where over 1 million more families could buy their homes cheaply. With just three weeks before what is shaping up to be Britain's closest election since the 1970s, Cameron chose to largely abandon negative campaigning amid criticism the strategy was backfiring and focussed on what he could offer voters. He made no mention of his rival, opposition Labour Party leader Ed Miliband, and did not repeat a robust personal attack on his opponent's character made last week by Michael Fallon, his defence minister. Instead, he held out the prospect of higher living standards after five years of austerity. "The dream of a property-owning democracy is alive and we will help you fulfil it," Cameron told supporters at a technical college in the western English town of Swindon. "We offer a good life for those willing to try because we're the party of working people," he said. The election is about more than simply who will govern the $2.8 trillion economy: Cameron has promised a referendum on European Union membership while Scottish nationalists, who want Scotland's independence, are seeking a kingmaker role. src (Reuters) - The German government said on Wednesday that it was unrealistic to expect euro zone countries to be able to pay out a new tranche of aid to Greece this month. "We are negotiating with Greece at the moment. If there is a reform list, then the next step is a so-called Staff Level Agreement to make formal changes to the conditions of the aid programme. This is a complex process and no one in the Eurogroup expects this to be concluded by April 24," a finance ministry spokeswoman said. "Once you have this Staff Level Agreement, then you have to have implementation. Greece would have to agree laws and at some point the institutions would conduct an implementation review and only on this basis could aid be paid out. If people are under the impression that aid could be paid out in April, I think this is wrong." src | ||
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cLutZ
United States19574 Posts
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Velr
Switzerland10978 Posts
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warding
Portugal2397 Posts
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cLutZ
United States19574 Posts
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JonnyBNoHo
United States6277 Posts
![[image loading]](http://i.imgur.com/KFDuGEX.gif) + Show Spoiler + ![[image loading]](http://ftalphaville.ft.com/files/2015/04/CColzUrWEAA07mb.jpg) ![[image loading]](https://pbs.twimg.com/media/CConh-RVEAAGWfR.jpg:small) ![[image loading]](https://pbs.twimg.com/media/CCo0l8rVAAAKYVa.jpg) ![[image loading]](https://pbs.twimg.com/media/CConh5YUsAAFk9C.jpg:small) ![[image loading]](https://pbs.twimg.com/media/CConh6pVAAAi_9O.jpg:small) | ||
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WhiteDog
France8650 Posts
Draghi fear is delicious tho. On April 14 2015 23:47 RvB wrote: Where did you adres it, can you quote it? Obviously they want to sell their goods and don't restrict outgoing flows. That doesn't change the fact that they close of whole markets to foreign competitors. Tariffs isn't the only factor in protectionism. Yeah and everybody is in China's situation : they all want to sell their good and not buy too much from others. China just does it in a more crude way, but they don't strictly go against any of the OMC directives (since obviously, they were condemned at some point and change their behavior). China is still very open to international trade, that the trade is not perfectly free is another matter (nothing is, that's the main problem). | ||
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