Brexit, for once some facts.

[flecc]

Why do we need to 'balance the books (a misleading term in this instance)?

I have one - for example - with my local shop. I am forever buying things from them and they never buy anything from me. SO WHAT?!!!!

Several things wrong with that. First we cannot continually increase our trading deficit by borrowing what we don't earn, since eventually we won't be able to meet the interest costs or make repayments. Then the lenders won't lend any more at bearable interest rates.

Secondly the interest payments are deductions from what we should have to spend. The higher they go, the lower our living standards.

And like all their customers, you buy lots from your local shop, just indirectly as the money circulates. If that wasn't so they'd be closed.
.

 

[Danidl]

It doesn't matter. Really. It. Does. Not. Matter.

What matters is you have the money to buy stuff. End of.

Agreed until the day when the creditors say no more credit. ,We want real assets. So then you sell all the islands off Scotland,then the factories ,then there are no profit centres. Are you sure you ever studied economics?.

 

[OxygenJames]

It doesn't matter. Really. It. Does. Not. Matter.

What matters is you have the money to buy stuff. End of.

Otherwise you get into your head that 'exports' are 'good' and 'imports' are bad. Nonsense! The whole point of exports - you could argue - is to enable you to import!

Anyhow.

From the IMF:

So, are deficits bad?

A common complaint about economics is that the answer to any question is, "It all depends." It is true that economic theory tells us that whether a deficit is good or bad depends on the factors giving rise to that deficit, but economic theory also tells us what to look for in assessing the desirability of a deficit.

If the deficit reflects an excess of imports over exports, it may be indicative of competitiveness problems, but because the current account deficit also implies an excess of investment over savings, it could equally be pointing to a highly productive, growing economy. If the deficit reflects low savings rather than high investment, it could be caused by reckless fiscal policy or a consumption binge. Or it could reflect perfectly sensible intertemporal trade, perhaps because of a temporary shock or shifting demographics. Without knowing which of these is at play, it makes little sense to talk of a deficit being "good" or "bad": deficits reflect underlying economic trends, which may be desirable or undesirable for a country at a particular point in time.

https://www.imf.org/external/pubs/ft/fandd/2006/12/basics.htm

 

[OxygenJames]

Agreed until the day when the creditors say no more credit. ,We want real assets. So then you sell all the islands off Scotland,then the factories ,then there are no profit centres. Are you sure you ever studied economics?.

Read the IMF article.

 

[Danidl]

Simple thought experiment. Imagine a country where none of the people have jobs - they all make money off stocks, property and savings interest. They buy stuff from outside the country.

Result - a perfectly sustainable system with a continual negative balance of payments.

Earth calling Donald Trump.

Brilliant, provided they don't need food, heat, housing,housing maintenance,nursing,medical treatment...funerals,holes in the ground,

 

[Woosh]

If the deficit reflects an excess of imports over exports, it may be indicative of competitiveness problems, but because the current account deficit also implies an excess of investment over savings, it could equally be pointing to a highly productive, growing economy. If the deficit reflects low savings rather than high investment, it could be caused by reckless fiscal policy or a consumption binge. Or it could reflect perfectly sensible intertemporal trade, perhaps because of a temporary shock or shifting demographics. Without knowing which of these is at play, it makes little sense to talk of a deficit being "good" or "bad": deficits reflect underlying economic trends, which may be desirable or undesirable for a country at a particular point in time.

we already have a substantial current account deficit.
brexit causes loss of confidence, less direct foreign investment and now, even property prices in London go down.
There is little left you can get out of devaluating the Pound. Soon, it will be stagflation.
It's about time that the economists for brexit wake up.

 

[flecc]

Simple thought experiment. Imagine a country where none of the people have jobs - they all make money off stocks, property and savings interest. They buy stuff from outside the country.

These tactics could only work for a tiny country, there is a related example in Luxembourg which is wealthy. But for all manner of complex reasons it can't translate to such as the UK or Germany.

Fundamentally there is only so much wealth, however it's defined, and only a minority can ever be rich.
.

 

[Danidl]

Read the IMF article.

I don't need to. A country can survive by supplying services. But only if there are customers,and if you are supplying a service it implies skills,that the customer does not have

 

[OxygenJames]

"However, even if there were an $800 billion trade deficit it simply wouldn't be a problem. Because the balance of payments does actually balance--it must, it's an accounting identity.

Thus if there's a trade deficit then there must be, over on the capital account, a surplus, to balance it. And there is and always has been and always will be. Foreigners invest about $500 billion a year more into the US than Americans invest outside the US. That $500 billion of foreign money might be lent to the government for example--foreigners do own a number of Treasuries.

The government then spends this money into the American economy. Or maybe the foreigners invest into business directly (and they do, foreign direct investment into the US economy is large, a few hundred billion a year).

Or buy houses, or artworks, or movie studios or......all of which means that the money comes back into the US economy. The trade deficit simply does not mean a leakage of money or wealth out of the US."

From my fav economist (who I won't mention the name or OG will have a go at me).

 

[OxygenJames]

These tactics could only work for a tiny country, there is a related example in Luxembourg which is wealthy. But for all manner of complex reasons it can't translate to such as the UK or Germany.

Fundamentally there is only so much wealth, however it's defined, and only a minority can ever be rich.
.

Ha! Nonsense. We CREATE wealth all the time! Doh! Such an old Socialist idea that there is one cake of money and its all about how you split it up!

I really thought such ideas had died out with Corbyns chances of winning an election....

 

[OxygenJames]

I don't need to. A country can survive by supplying services. But only if there are customers,and if you are supplying a service it implies skills,that the customer does not have

Well there you go. Danny will not read an article (written by the IMF not some 'nut-job' right-wing economist...) - that challenges his previously held views.

Danny Danny Danny.....

I had hopes for you too.

 

[OxygenJames]

Read the IMF article.

You can lead a horse to water.

But.....

 

[oldgroaner]

Just enjoying a Pink Lady apple. This one has come from France. I purchased it in the co op. Everyone in was nice and polite so it wasn't where groaner works.

It cost £2.50 for 4. My point is I made the same purchase on Monday. On that accasion though the apples, whilst still of the Pink Lady variety came from New Zealand. Same price.

The interesting thing for me was the quality of the Kiwi fruit was much better than the French one. Same price.

If this sort of perishable food can be delivered from the other side of the world at the same price where is the drama?

Keep your juvenile sniping out of future posts.

 

[Fingers]

Keep your juvenile sniping out of future posts.

Please keep on topic.

Thanks.

 

[oldgroaner]

HA! Poverty as re-defined by all the bleeding hearts - meaning having an income of 60% of the median wage. WHICH IS LIKE ALL OF US HAD BACK IN THE 60s.

ie - according to the Guardian and their idiot readers EVERYBODY in the 60s grew up in 'poverty'.

B********s. Just total complete b******s.

Oh no not another slur from a leave fan . The truth never gets in your way does it?
Tell me how does this work?

"meaning having an income of 60% of the median wage. WHICH IS LIKE ALL OF US HAD BACK IN THE 60s."
Fascinating , so you regard the Guardian readers as idiots? after that ?
Get a grown up to explain.

You are as bad a maths as Gove where he wanted all Schools to be above average

 

[oldgroaner]

Please keep on topic.

Thanks.

 

[Deleted member 128]

It doesn't matter. Really. It. Does. Not. Matter.

What matters is you have the money to buy stuff. End of.

And where does the money come from, would that be the magic monkey tree?

 

[oldgroaner]

Scary stuff:

View attachment 28971

Doesn't matter,does it?

 

[Danidl]

Plus Danny - I think the EU changed the rules and said we can extend it anytime we want. Some rulling maybe 3-4 weeks ago. I think somebody posted about it. I could be wrong but I don't think so.

No. That is wishful thinking. What you were probably referring to was the ECJ December ruling allowing withdrawal ,not extension of Article 50 . Note if you read the ECJ judgement, it requires what would need to be a "Meaningful Vote, " or basically an Act of UK Parliament...the term was couched in .."using the democratic procedures of the institution" .
So the situation today is.
1. The UK would need to formally request the EU to make one of these changes.
2. That would need the Act of Parliament
3. Neither of which is in prospect,and both of which the majority party in the UK refuse to consider.
4. Then in the case of rescinding Article 50 and restoring full membership,it is British fait accompli, the UK gets its Commissioner back,UK PM becomes a full member of European Council next day. UK gets to vote in MEPs.
4a. Then in case of seeking an extension to Article 50, the UK is a supplicant to the EU European Council,where attitudes are hardening. Why would and under what conditions would the EU grant an extension?. It would cause complications with the forthcoming EU elections for a start.

 

[oldgroaner]

When Remain campaigners warned that there would be a recession, they didn't add "in Italy".

When they warned that there would be street violence, they didn't add "in France".

When they warned that populist parties would surge, they didn't add "across the EU, but not in Britain".

More Daily Express/ Daily Mail style propaganda?

Why would remainers be interested in recession in italy? and violence in France? only leavers do that in the hope of finding some anti EU propaganda, it's one of their standard ploys to cover the fact that they haven't a plan.
And you certainly can't guarantee both of those problems won't become ours.
So concentrate on the real problems we face not glorying in someone elses.
That is a pitiful way to behave.