Recession & the Chinese Renminbi

[fillyboy]

What I dont understand is why does China artificially manipulat its currency to be weaker.

A great point Bodd that everyone is choosing to ignore. Basically China don't allow their currency to be traded on foreign exchanges, thus in effect having the ability to set their own exchange rates. Devalue the currency at will, covers wage increases and keeps a competitive edge, unfair advantage? yes. The Donald is the only world leader I'm aware of who has dared to speak out about this practice.

Now, what he's also spoken out about, is how Germany has in fact adopted the same process with the Euro. The Euro has artificially lowered the value of the DM while inflating the value of the the Lire, Peseta Drachma etc.

Not only that, EU rules dictate a limit to the trade surplus any member state can run, Germany has run at over double that amount for a very long period. The problem is, for every country that runs a surplus, another must run a deficit, hello southern Europe.

 

[Bodd]

A great point Bodd that everyone is choosing to ignore. Basically China don't allow their currency to be traded on foreign exchanges, thus in effect having the ability to set their own exchange rates. Devalue the currency at will, covers wage increases and keeps a competitive edge, unfair advantage? yes. The Donald is the only world leader I'm aware of who has dared to speak out about this practice.

Now, what he's also spoken out about, is how Germany has in fact adopted the same process with the Euro. The Euro has artificially lowered the value of the DM while inflating the value of the the Lire, Peseta Drachma etc.

Not only that, EU rules dictate a limit to the trade surplus any member state can run, Germany has run at over double that amount for a very long period. The problem is, for every country that runs a surplus, another must run a deficit, hello southern Europe.

Of course. I never thought of it like that. And using the UK as another example. The weak pound could make cars, food and wine more expensive. This of course would not benifit us or France let's say, as we would buy less food and wine from them and what with the added tarrifs it could be the difference in buying a Ssangyong instead of a Renault, and get a 7 year warranty thrown in.

Unfortunately its also the reason I'm holidaying in Norfolk with the family where's I would rather be in Spain. Good for British tourism, not so good for the Spanish. I love experiencing other cultures so not good for me.

But a weak pound would be a weak pound around the world making everything more expensive.
But with Tarrifs and the exchange rate conciderd buying a Chilean wine, Argentinian beef or New Zealand lamb could still work out cheaper than buying from France. The down side for the French is we might take a liking for Chilean wine,
Argentinian beef 7 year warrantys and New Zealand lamb and never go back. The down side of this is the impact it will have on our footprint. Far less damaging importing lamb from France than from New Zealand.

Then maybe the UK farmers might re-invent themselves and breed more Lamb on our fields rather than solar panels.

It's not until you look into it this you realise the pros and cons.

 

[securespark]

I'm holidaying in Norfolk

I love experiencing other cultures so not good for me.

Norfolk is a whole other culture!

 

[Bodd]

Norfolk is a whole other culture!

A bit like Yogurt do you mean

I like yogurt do I want it every day? 4th year in a row we've been Norfolk.

 

[SirGalahad]

A great point Bodd that everyone is choosing to ignore. Basically China don't allow their currency to be traded on foreign exchanges, thus in effect having the ability to set their own exchange rates. Devalue the currency at will, covers wage increases and keeps a competitive edge, unfair advantage? yes. The Donald is the only world leader I'm aware of who has dared to speak out about this practice.

Now, what he's also spoken out about, is how Germany has in fact adopted the same process with the Euro. The Euro has artificially lowered the value of the DM while inflating the value of the the Lire, Peseta Drachma etc.

Not only that, EU rules dictate a limit to the trade surplus any member state can run, Germany has run at over double that amount for a very long period. The problem is, for every country that runs a surplus, another must run a deficit, hello southern Europe.

Can you explain how a dollar currency peg works?

 

[SirGalahad]

The same RWR now trying to justify UK slowdown as part of global slowdown but blamed labour for the 2008 recession which was caused by global fallout.

RWR for you.

 

[fillyboy]

Can you explain how a dollar currency peg works?

Yes I can, but why would that be relevant to the Yuan, Euro or Sterling?

 

[motorbiking]

It’s inevitable that there will be a short term economic choke as we head to brexit day. It’s worth remembering that Germany had two flat qtrs last year, Italy is a basket case and many Eurozone countries are close to zombie status. However, many of the key elements of a damaging recession aren’t here. Interest rates, employment, corporate spending are all unlikely to support a mass crash of the economy.

 

[Notch7]

It’s inevitable that there will be a short term economic choke as we head to brexit day. It’s worth remembering that Germany had two flat qtrs last year, Italy is a basket case and many Eurozone countries are close to zombie status. However, many of the key elements of a damaging recession aren’t here. Interest rates, employment, corporate spending are all unlikely to support a mass crash of the economy.

Ending 40years plus of trade agreements and starting from scratch will cause a long term shrinkage of the economy.

I expect in a no deal scenario, short term trade may continue as is because regulatory standards will be the same. If and when divergence starts, the third country status will kick in.

 

[Notch7]

The same RWR now trying to justify UK slowdown as part of global slowdown but blamed labour for the 2008 recession which was caused by global fallout.

RWR for you.

Using logic to base an argument on......its just not fair

 

[Bodd]

Ending 40years plus of trade agreements and starting from scratch will cause a long term shrinkage of the economy.

I expect in a no deal scenario, short term trade may continue as is because regulatory standards will be the same. If and when divergence starts, the third country status will kick in.

I see your covering yourself early. Gives you plenty of time to go missing.
(green head laughing)

 

[Notch7]

His response was explain it to yourself

Thats understandable.

When something is explained to you, you ignore the answer because it doesnt fit your entrenched views.

Immigration has been discussed sooo many times, but you always come back with 'I support Brexit because of immigration'.

 

[Notch7]

This is a proper soldered fitting

You never did that, Ive heard your nickname in the trade: push fit Bodd

 

[Bodd]

Thats understandable.

When something is explained to you, you ignore the answer because it doesnt fit your entrenched views.

Immigration has been discussed sooo many times, but you always come back with 'I support Brexit because of immigration'.

No I support Brexit as I don't believe you...

 

[motorbiking]

Nobody credible is calling no deal brexit vs deal at anything more than 40/60. The reason it will slow is because we are very close to the end now. Delaying investments a few month isn’t that hard.

No deal does offer some benefits, though I am keen on a deal and even don’t care if we stay now.