Author Topic: Exchange rates do not affect the trade deficit  (Read 576 times)

Offline expat_panama

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Exchange rates do not affect the trade deficit
« on: February 21, 2017, 05:49:58 AM »
Money isn’t wealth as much as it’s a measure, or a lubricant, that enables exchange of wealth.  But when money floats around such that it’s deprived of its singular purpose as a medium of exchange, that which is which mutually beneficial – trade (my bread for the wine of the vintner who takes my money and buys the butcher’s meat) – becomes uneven...

...Adam Smith got it right long ago.  The “sole use of money is to circulate consumable goods.”...

...despite a surge in the value of the yen versus the dollar, Japan hardly lost competitiveness...

...the worst effect of currency devaluation; one that will place a bull’s eye on the very exporting capability that devaluation proponents like Trump seek.  Specifically, investment is the true driver of production advances that bring down the price of everything; falling prices goosing the sales of goods and services domestically and globally...

...The negative effects of devaluation are near instantaneous such that the cost of production rises alongside reduced investment in the production enhancements that invariably drive true competitiveness.  There are quite simply no “ifs” when it comes to devaluation and export advantage.  There’s no such thing.


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[from "There Are No 'Ifs' About It, Currency Devaluation Doesn't Confer An Export Advantage" http://www.forbes.com/sites/johntamny/2017/02/19/there-are-no-ifs-about-it-currency-devaluation-doesnt-confer-an-export-advantage/#164df30d1e38]

Most people have decided that exchange rates affect the trade balance.  It doesn't, and reality is so hard for people to reconcile w/ their fondly held beliefs that most will simply ignore reality.  Some of us understand how we first have to accept the fact that things are what they are, and then later if we can understand things its good but that our failure to understand changes nothing.

fwiw, if any one wants to see what the history of exchange rates and trade is, click on http://ungb.org/econ/tradexchgrts.png and a simple explanation of this is at http://ungb.org/freepix/tradecartoon.png.

Online Solar

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Re: Exchange rates do not affect the trade deficit
« Reply #1 on: February 21, 2017, 05:58:19 AM »
So China devalues its currency just to be nice? :lol: :lol: :lol:
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Offline expat_panama

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Re: Exchange rates do not affect the trade deficit
« Reply #2 on: February 21, 2017, 06:23:43 AM »
So China devalues its currency just to be nice? :lol: :lol: :lol:
Of course not, they devalue to you can ask such intelligent questions a post clever icons.

So the facts we got are that (1) devaluations have not historically affected trade deficits--

 --(2) this is understood by the people who process our foreign purchases --

 --and (3) most people on these threads don't want to talk facts but prefer instead to make snarky wisecracks.

Seriously, pse let me know if you're interested in the real life nuts'n'bolts of this.

Online Solar

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Re: Exchange rates do not affect the trade deficit
« Reply #3 on: February 21, 2017, 06:32:46 AM »
Of course not, they devalue to you can ask such intelligent questions a post clever icons.

So the facts we got are that (1) devaluations have not historically affected trade deficits--

 --(2) this is understood by the people who process our foreign purchases --

 --and (3) most people on these threads don't want to talk facts but prefer instead to make snarky wisecracks.

Seriously, pse let me know if you're interested in the real life nuts'n'bolts of this.
English is the First language of this forum. So go back over your post, fix it and maybe I can respond to what you pass off as a coherent reply.
Koolaid is for kids, TEA is for adults

Offline expat_panama

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Re: Exchange rates do not affect the trade deficit
« Reply #4 on: February 21, 2017, 07:00:49 AM »
...pse let me know if you're interested in the real life nuts'n'bolts...
English is the First language of this forum. So go back over your post...
OK, I could repost as "pse please let me know if you're interested in the real life nuts'n'bolts nuts and bolts..." but what you probably really want here is for me to clear out for while.


Cheers.

Online Solar

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Re: Exchange rates do not affect the trade deficit
« Reply #5 on: February 21, 2017, 07:21:18 AM »
OK, I could repost as "pse please let me know if you're interested in the real life nuts'n'bolts nuts and bolts..." but what you probably really want here is for me to clear out for while.


Cheers.
No, if we're going to discuss an issue, it's extremely important we use good communication skills, that, and it's simply common courtesy, assuming you aren't trying to obfuscate an answer by claiming "That's not what I meant", wahhhh...

So let me get this straight, your claim is that currency rates do not effect trade deficits or imbalances, correct?
If I'm wrong, then this is your chance to clarify your point.
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Online Solar

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Re: Exchange rates do not affect the trade deficit
« Reply #6 on: February 22, 2017, 08:30:56 PM »
Did you have any intention of coming back to your thread and responding to Reply #5?
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Online Solar

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Re: Exchange rates do not affect the trade deficit
« Reply #7 on: March 04, 2017, 06:47:31 PM »
OK, I could repost as "pse please let me know if you're interested in the real life nuts'n'bolts nuts and bolts..." but what you probably really want here is for me to clear out for while.


Cheers.
Cut the crap son, you aren't fooling anyone. You come in with a different proxy/IP, check to see what the comments are and scurry away when you see you were actually challenged.
So here's the thing, either you participate in dialogue, or you'll find yourself as a mere observer.
Don't think for a second you fooled anyone when you came back, you didn't and you won't again, so don't expect to slide again.
Koolaid is for kids, TEA is for adults

 

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