Snip below of a coupon site offering some pretty generous discounts on European electronics products to US consumers. Phillips (Koninklijke Philips N.V.) shaver coupons for $20, $25 and $40 off below at coupons.com.
Real terms of trade is still drifting towards the advantage of the US consumer vs. the European producers even now post the main Holiday shopping season. We can see this in the discounts being offered here for these consumer electronics items in USD terms; and with the European sourced oil price also being reduced in USD terms.
Euro down thru $1.19 now. hitting fresh lows.
6 comments:
BEA said today that imports were down 2.2% in financial terms, but you are probably right, Matt, in real terms, we're probably importing more than ever. As Euro, Yen and the others devalue we get more stuff for less! Until we don't have jobs and can't afford to buy more stuff because no one offset the demand leakages.
Well Ryan these are probably produced outside the US anyways (China slave factory?)
So we are still doing within our borders what we have been doing... so it becomes "about price"...
iow there really isnt much different going on internal to the US, but Philips here is reducing real terms of trade in USD terms for people here who may need a new shaver at this time...
The real terms of trade (and hence the forex rates) only apply to import/export products/commodities imo...
Last year, US merchandise imports were like $2T so it is a big issue... $150B+ per month.....
rsp,
Ryan a couple of summers ago our HVAC went out and it was going up to 96 that day...
so I called my HVAC people and they charge like $100 to come out plus parts.... BUT they couldnt get out till the next day...
So I opened it up myself and the belt on the air handler motor disintegrated and fell off so we had no air flow was all...
I called the local HVAC supply and they had the exact same belt (made in China) for $3.87 including tax and they had a walk-in counter...
So I went over there and bought the belt and replaced it myself...
So in this deal, the HVAC people get $100 and the Chinese probably get $1 for the belt...
If the Chinese lower the price for the belt to 80 cents, the the Yuan goes down by 20% vs the USD but US gdp stays the same at $100....
So all of this stuff being done outside the US that we no longer do here, (make electric shavers, manufacture fan belts (Yeah China they have finally figured out how to make fan belts after 200 years and sell them for $1..) ..etc..) if the external producers reduce the price of these items, then we get better real terms of trade (USD goes up vs the external currency) and US gdp stays the same/ is not effected....
rsp,
Matt pass them zombies in EVERY government of the world that memo from Plato 2k years ago maybe they learn something and stop the free trade non-sense about perpetuating unsustainable balances before it's too late.
One of the reasons people back then was quickly to learn lessons is because economies could fall to shocks much faster (weather not helping one year? you are busted!) and learned the hard lessons of what this policies created in the end: hatred, chaos and wars.
Trade is good, barbarism is not good. easy to learn politician kamikazes, even you can!
Look at the disaster that is Russia right now, a by product of this free-trade non-sense.
Ignacio,
glad to see you back here....
Cognitive Bias:
I think somehow, when we are allowing this "free trade", when we let the exporter keep the foreign claims and count them ( converted at the current exchange rate) marked back to the local currency, it is somehow creating a cognitive issue where these people lose track of the view that "exports are a (real) cost..."
They just begin to look at it as "money" and the delineation between the currency zones starts to blur.... a manifest cognitive deficiency imo...
I think this can be ok for a while as long as prices of the goods stay about the same... to your point about a bad year and then everything can get blown out... chaos reigns... like today we have oil price collapsing due to huge supply add in North America now the oil exporters/financiers are busted out.... Euro collapsing, chaos, etc...
So seems like what our ancestors did was to immediately convert the foreign claims into local claims on a 1:1 rate (fixed exchange rate) when the exporter came back from abroad.... we could just do this on our IT systems today instead of phyisically exchanging the coins like back then...
If we would just again follow these procedures as a policy I think we could avoid these cognitive issues that have certainly become manifest over the 1,000s of years we suffered under the metals since Plato wrote that
... iow under the metals, "money is money" type thinking developed... big cognitive failure imo... facilitated by operating under the metals... If you listen to Roger's podcast with Mike, Roger has the neuro science behind how this happens in the brain synapses and cognitive circuits... take a listen to that if you can some time... the correct circuits get short circuited sounds like and the brain gets mis-wired and the cognitive failure results...
This is where Apostle Paul warned Timothy about "of fond silver" or in the original Greek "philargurion" which is commonly mistranslated by Christendumb as "love of money" or some shit today.... it comes originally from being under the metals imo... now the cognitive connections in these people's brains are all F-ed up....
Its a big mess.... we could easily avoid all of this imo even if we just studied the history in this case... our ancestors implemented a cross-border "Hellenic Euro" 2,000 years ago with no financial problems ever resulting... only problems became the REAL ones....
we could easily just go back to that imo... would be better than the chaos these morons are foisting on us today for sure!!!!
Hang in there Ignacio... rsp,
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