UK General Election 2015

[AJS-]

Their conclusions seem to point to the fairly orthodox view that the problems of Greece stem from budgetary mis-management and government debt, and are accentuated by having a currency which does not reflect the Greek economy, which would have slid in value if Greece had a free floating Drachma. This does worsen their current account problems by way of a trade deficit as imports remain relatively cheap while exports (including inbound tourism) are relatively expensive. But as usual with trade deficits it's more a symptom than a cause of the structural problems of that economy.


Money is a medium of exchange and a store of value. Floating currencies don't represent any particular bundle of goods, services or commodities and only represents barter in the sense that it can be used as a measure of diverse goods precisely because it is consistent across the various things that can be bought with it, which seems to be the opposite of what you are saying.

Greece had and still has a successful tourism industry which earns the country money. I don't think any serious economist would have advised the Greek government to run up huge public sector debts and hope that the other Eurozone countries would just bail them out.

[XJ Flyer]

AJS- said:

Their conclusions seem to point to the fairly orthodox view that the problems of Greece stem from budgetary mis-management and government debt, and are accentuated by having a currency which does not reflect the Greek economy, which would have slid in value if Greece had a free floating Drachma. This does worsen their current account problems by way of a trade deficit as imports remain relatively cheap while exports (including inbound tourism) are relatively expensive. But as usual with trade deficits it's more a symptom than a cause of the structural problems of that economy.


Money is a medium of exchange and a store of value. Floating currencies don't represent any particular bundle of goods, services or commodities and only represents barter in the sense that it can be used as a measure of diverse goods precisely because it is consistent across the various things that can be bought with it, which seems to be the opposite of what you are saying.

Greece had and still has a successful tourism industry which earns the country money. I don't think any serious economist would have advised the Greek government to run up huge public sector debts and hope that the other Eurozone countries would just bail them out.

The reason why Greece's economy ( amongst others including ours ) is going down the tubes is firstly all about that erroneous idea that worthless paper in the form of money is anything more than a token of exchange.Especially when that idea reaches the delusional point of thinking that it is a 'store of value' when it is clearly anything but.

As for Greece's tourism industry earning 'money' that industry obviously doesn't have sufficient barter value in it,v that of a large manufacturing based economy like Germany's,to maintain the value of the currency wether that currency be Drachma's or Euros.

The only way your theory might work in practice would be under the old system of barter whereby 'money' was arguably a token of exchange/barter 'and' a store of value in its own right by being made up of precious metal like gold or silver.In which case it certainly could then arguably be used to compensate for the difference in the value of barter ( trade deficit/surplus ).At least unless/until such time as it is realised that in most cases even gold is just a heavy worthless liability that can't be used for anything other than jewellery or being locked in a vault doing absolutely nothing to provide any of the things we need.Which then brings us back to that all important issue of it being the value of barter that matters.Which in our case,unlike Greece,means giving the Germans oil products in exchange for manufactured goods which we could make for ourselves.In addition to cash based on the value of those oil revenues in order to keep the Euro afloat,to cover the difference in the real value of barter between the least industrialised EU states and the most in the form of Germany.Until that is the 'economists' suddenly realise that we are actually a net importer of energy and the pound crashes to the value of the Drachma.

[AJS-]

In what sense is money not a store of value?

The fact that the Greek tourist industry can't support the rest of the country to retire at 40 on full pay while enjoying first class public services doesn't mean there is anything qualitatively wrong with money earned from tourism.

I don't really follow the rest of your post except that you seem to think that the value of the pound as arrived at by supply and demand is somehow grossly inflated, and a vague sense that manufacturing stuff is good.

[anonymous-user]

AJS- said:

In what sense is money not a store of value?

The fact that the Greek tourist industry can't support the rest of the country to retire at 40 on full pay while enjoying first class public services doesn't mean there is anything qualitatively wrong with money earned from tourism.

I don't really follow the rest of your post except that you seem to think that the value of the pound as arrived at by supply and demand is somehow grossly inflated, and a vague sense that manufacturing stuff is good.

I'm not convinced it's worth trying to understand XJFlyers ramblings about money. As for his ideas about manufacturing and services, ignoring the glaringly obvious fact that 'services' add more value to most finished goods than the actual manufacturing, I can only presume he has never seen a list of countries by GDP per capita.

[Scuffers]

fblm said:

I'm not convinced it's worth trying to understand XJFlyers ramblings about money. As for his ideas about manufacturing and services, ignoring the glaringly obvious fact that 'services' add more value to most finished goods than the actual manufacturing, I can only presume he has never seen a list of countries by GDP per capita.

it's easier to understand if you think of services as financial services

Yes, this is not the only service industry, but in the context of his rambling, it is.

[XJ Flyer]

AJS- said:

In what sense is money not a store of value?

I think I have answered that question by saying that 'money' is nothing but worthless paper that's value is totally based on the value of the barter which it simply represents.Which is why the Mark is worth more than the Drachma and is why the Euro is a liability to the Germans and so far a delusional get out free for Ireland,Spain,Portugal and Greece.Until that is the Germans suddenly realised where the idea is heading.

In which they now erroneously think that 'austerity' and throwing more printed paper in the form of money at the problem,will fix the basic problems of the contradiction of a single currency based on different levels in the value of the barter/trade between the holders of the currency.

In view of which I'd now reverse your question by asking in what sense is money ( worthless paper ) any so called 'store' of value bearing in mind the obvious difference in the value of ( would would still be ) the DM v the Greek Drachma and the obvious reasons for that difference.

[XJ Flyer]

fblm said:

I'm not convinced it's worth trying to understand XJFlyers ramblings about money. As for his ideas about manufacturing and services, ignoring the glaringly obvious fact that 'services' add more value to most finished goods than the actual manufacturing,

So by your logic the German economy is just the engine of Europe 'despite' being hindered by its valueless manufacturing sector.As opposed to my logic which says it is because of it.

Unfortunately for us the economists are obviously going by your logic at least until the point when the pound crashes to what it is really worth by reflecting the reality of an over populated country that is over reliant on services with a trade deficit and resulting debts to match.

[BlackLabel]

[XJ Flyer]

BlackLabel said:

To be fair the result of the next election will in large part be based on economic arguments and policies.

[anonymous-user]

XJ Flyer said:

fblm said:

I'm not convinced it's worth trying to understand XJFlyers ramblings about money. As for his ideas about manufacturing and services, ignoring the glaringly obvious fact that 'services' add more value to most finished goods than the actual manufacturing,

So by your logic the German economy is just the engine of Europe 'despite' being hindered by its valueless manufacturing sector.As opposed to my logic which says it is because of it.

yes of course I think manufacturing is valueless, that's exactly what I said and where 'my logic' gets me. It's the reason I have a Masters in Manufacturing Engineering. When you walk in a pub do you notice people hurriedly finishing their pints and leaving?

[XJ Flyer]

fblm said:

XJ Flyer said:

fblm said:

I'm not convinced it's worth trying to understand XJFlyers ramblings about money. As for his ideas about manufacturing and services, ignoring the glaringly obvious fact that 'services' add more value to most finished goods than the actual manufacturing,

So by your logic the German economy is just the engine of Europe 'despite' being hindered by its valueless manufacturing sector.As opposed to my logic which says it is because of it.

yes of course I think manufacturing is valueless, that's exactly what I said and where 'my logic' gets me. It's the reason I have a Masters in Manufacturing Engineering. When you walk in a pub do you notice people hurriedly finishing their pints and leaving?

The idea that retailing for example supposedly 'adds value' value to a product,let alone adds more than actually making it,was effectively saying that manufacturing is valueless ( less valuable ) 'by comparison' allowing for a justified bit of sarcasm in this case.When the German economy v that of ours,let alone Greece's,proves the case of which is more valuable between a manufacturing based economy as opposed to a services based one in providing the key difference between a basket case and a viable economy.

[XJ Flyer]

brickwall said:

It'll be decided on the NHS, economic credibility (which is not the same as wholesale 'economic policies'), and party personalities.


And by 'economic credibility' I think it'll be which party can convince the electorate that their approach to tax/spending and deficit reduction will be best. These are largely domestic issues, and protectionism/free trade doesn't enter the common debate

Assuming that UKIP isn't going to come up with some radical changes which put the economy on a protectionist Fordist type track to provide the wages required for that move away from socialist type income support and health care provision then trust me Labour Socialist ideology will walk the election by a landslide at least with the help of the Libdems and SNP.Being that the working class has probably learn't by its mistake of being a turkey voting for Christmas in the form of Thatcherite wage policies mixed with the usual reliance on a rationed ( slashed ) socialist type 'benefits' and health care provision.

IE if we're going to stay lumbered with the global free market race to the bottom labour market and trading environment then we might as well have the government which will slash the socialist benefits system,which is an essential economic requirement in that environment,the least.

[AJS-]

Money as a store of value is pretty well accepted

http://www.investopedia.com/terms/s/storeofvalue.a...

http://en.m.wikipedia.org/wiki/Store_of_value

http://en.m.wikipedia.org/wiki/Money

If you're going to refute this fairly well established idea then you will have to come up with something a bit more compelling than pointing out that it's made of paper and can be exchanged for goods.

[XJ Flyer]

AJS- said:

Money as a store of value is pretty well accepted

http://www.investopedia.com/terms/s/storeofvalue.a...

http://en.m.wikipedia.org/wiki/Store_of_value

http://en.m.wikipedia.org/wiki/Money

If you're going to refute this fairly well established idea then you will have to come up with something a bit more compelling than pointing out that it's made of paper and can be exchanged for goods.

In which case when Russian savers ask the question why is the value of their savings falling with the value of Russia's oil exports Putin can just direct them to Wiki.Where it says it can't be happening because money is a 'store of value' in its own right and is not actually based on the value of the barter it is based on.

[AJS-]

As I said it isn't necessarily a good investment but it does store value over time, even if the value is depreciating in terms of other goods. I don't see any sense in which it isn't this so I can only assume you're defining the term differently and you mean that fiat money is not a reliable store of value or a good investment to hold while governments are able to print more of it without restriction or an obligation to back this up with anything. If that's what you mean then we agree on it.

I still don't know how you then link that to manufacturing versus services.

[wc98]

XJ Flyer said:

In which case when Russian savers ask the question why is the value of their savings falling with the value of Russia's oil exports Putin can just direct them to Wiki.Where it says it can't be happening because money is a 'store of value' in its own right and is not actually based on the value of the barter it is based on.

[XJ Flyer]

AJS- said:

As I said it isn't necessarily a good investment but it does store value over time, even if the value is depreciating in terms of other goods. I don't see any sense in which it isn't this so I can only assume you're defining the term differently and you mean that fiat money is not a reliable store of value or a good investment to hold while governments are able to print more of it without restriction or an obligation to back this up with anything. If that's what you mean then we agree on it.

I still don't know how you then link that to manufacturing versus services.

The link between a higher value manafacturing based economy v a lower value services etc based one and that link also being part of what it means to 'back the currency up with something',is absolutely clear in the case of comparing the stability and value of the ( former ) German Mark with that of the ( former ) currencies of places like Spain,Greece and Ireland for just three examples.In addition to what happened when the idea of money being an independent 'store of value' was taken to its logical conclusion in the form of the Euro which defines and values the currency of Greece,Spain and Ireland etc the same as that of Germany.The point being that it takes a strong manufacturing base creating trade balance or trade surplus 'in manufactured goods' to actually 'back up the currency'.

[AJS-]

I think the key thing there isn't manufacturing versus services but low versus high value. The hardly earth shattering realisation that making money is good. Woupd it be better to take a service company like PWC, which doesn't manufacture anything, and have all their legions of highly paid accountants and other professionals, and to retrain them to make cheap plastic toys?

[Scuffers]

AJS- said:

I think the key thing there isn't manufacturing versus services but low versus high value. The hardly earth shattering realisation that making money is good. Woupd it be better to take a service company like PWC, which doesn't manufacture anything, and have all their legions of highly paid accountants and other professionals, and to retrain them to make cheap plastic toys?

Using your example, what value add do accountants do?

At a simplistic level, why do we need them?

[AJS-]

Scuffers said:

Using your example, what value add do accountants do?

At a simplistic level, why do we need them?

At a simplistic level we don't. In a complex, advanced economy with byzantine tax laws and huge complex companies they are pretty much essential. You might just as well ask why do we need bookshelves or toast racks or any other manufactured good.