A very basic business question.
Discussion
Dr Jekyll said:
Leaving aside the question of whether you could actually find a BMW made enirely by German workers and sub contractors. Then compared with leaving your money under the mattress, yes you are helping the Bristish economy because those pounds will be spent or envested back here.
Compared with buying a British product made in Britain by entirely British workers etc, then the difference is you are reducing the value of the pound compared with the Euro. So bad for anyone else wishing to import, but good for anyone wishing to export.
So why has Germany and China for example done so well for themselves, because of their imports?Compared with buying a British product made in Britain by entirely British workers etc, then the difference is you are reducing the value of the pound compared with the Euro. So bad for anyone else wishing to import, but good for anyone wishing to export.
BGARK said:
So why has Germany and China for example done so well for themselves, because of their imports?
Because they produce stuff people want to buy, and in a world with international trade that makes them well off. Once countries decide imports are bad and put up protectionist barriers, then everyone ends up worse off.I am not saying imports make the country better off, just that they don't make it worse off. What exactly is your problem with imports?
Dr Jekyll said:
What exactly is your problem with imports?
Nothing, I have run businesses doing both.Let me ask you another question, if we make furniture. I buy some local raw materials (wood) for £10, and use my skills to "add value" and sell a chair for £100.
If I sell to a client in France for £100, what has happened, are you saying this has not benefited the UK economy by £90.
BGARK said:
Nothing, I have run businesses doing both.
Let me ask you another question, if we make furniture. I buy some local raw materials (wood) for £10, and use my skills to "add value" and sell a chair for £100.
If I sell to a client in France for £100, what has happened, are you saying this has not benefited the UK economy by £90.
No.Let me ask you another question, if we make furniture. I buy some local raw materials (wood) for £10, and use my skills to "add value" and sell a chair for £100.
If I sell to a client in France for £100, what has happened, are you saying this has not benefited the UK economy by £90.
Dr Jekyll said:
I am not saying the export has not benefited the economy.
Can you go into more detail or have any links for me to read into this further?I'm somebody who imports and exports goods from all over the world so have an active interest in how the movement of goods and money really have an affect. Cheers!
Mudgey said:
Can you go into more detail or have any links for me to read into this further?
I'm somebody who imports and exports goods from all over the world so have an active interest in how the movement of goods and money really have an affect. Cheers!
As I understand it:I'm somebody who imports and exports goods from all over the world so have an active interest in how the movement of goods and money really have an affect. Cheers!
Sellling a £100 chair to France adds £100 to UK GDP, and also to GNP if you’re a UK national.
Somewhere along the line the French customers Euros are sold to buy sterling, thereby giving a sterling holder somewhere the opportunity to spend money in the Eurozone. So Euros get cheaper and Sterling gets more expensive. Accordingly imports from the Eurozone get either cheaper or more profitable for the manufacturer and the reverse happens to UK exports to the Eurozone.
Meanwhile someone in France says ‘we’re all doomed’ because they think Euros spent on imports have vanished into oblivion.
BGARK said:
So you are telling me that if I buy a BMW, made in Germany, using German skilled workers, and German sub-contractors, employing German people... I am helping the British economy?
The VAT and margin stay here. And part of the margin goes to employees of the dealer company, who pay more taxes and spend the rest in the shops to keep others in work.And keeping people in work, even if they are selling foreign goods, means that less taxes are needed to keep them at home doing nothing.
V8mate said:
The VAT and margin stay here. And part of the margin goes to employees of the dealer company, who pay more taxes and spend the rest in the shops to keep others in work.
And keeping people in work, even if they are selling foreign goods, means that less taxes are needed to keep them at home doing nothing.
That's true if there's a dealership in the middle, but if I import a product direct from overseas the only Briton being supported is the postman. And HM Govt if there's duty.And keeping people in work, even if they are selling foreign goods, means that less taxes are needed to keep them at home doing nothing.
Simpo Two said:
V8mate said:
The VAT and margin stay here. And part of the margin goes to employees of the dealer company, who pay more taxes and spend the rest in the shops to keep others in work.
And keeping people in work, even if they are selling foreign goods, means that less taxes are needed to keep them at home doing nothing.
That's true if there's a dealership in the middle, but if I import a product direct from overseas the only Briton being supported is the postman. And HM Govt if there's duty.And keeping people in work, even if they are selling foreign goods, means that less taxes are needed to keep them at home doing nothing.
BGARK said:
Dr Jekyll said:
That money spent on imports does not leave the economy, it comes back.
Please give an example and explain the maths.Dr Jekyll said:
I spend £100 on importing a gadget from France. The French company uses the £100 to buy Euros to pay it's staff and suppliers. The person who sold the Euros now has £100. There is only one country in the world where pounds can be spent, so that's where they spend it.
So using this example (the person), if I go to the bank and exchange £100 for €100 the bank is now £100 better off.BoRED S2upid said:
The man on the street doesn't understand it that way they see billions going up in smoke with no benefit to them yet it's their tax dollars hence protests.
Same for HS2 it will create jobs before, during and after. It will benefit tens of thousand every year for decades but people protest.
You might protest if it was going through your back garden.....Same for HS2 it will create jobs before, during and after. It will benefit tens of thousand every year for decades but people protest.
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