Relative currency increases are great for import markets. Unfortunately, I would need a functional supply chain and a relatively stable geopolitical environment to access those high-value/low-cost imports from within the state with the currency-of-increasing-value.
And with energy costs on the rise, all the arbitrage I get by shopping for pears picked in Hondurus and canned in Vietnam vanishes in the face of S&H fees.
The downside is mainly that your exports gets a lot more expensive , which makes it harder to compete in an international market and therefore negatively impacts balance of trade.
Okay that’s actually another thing I don’t understand, don’t import and export values kinda have to match due to the fact that trade is an exchange?
Like maybe not 1-1 for every country we’re trading with, but ultimately you’re trading labor performed in one place for labor performed in another, and doesn’t that all ultimately have to even out?
I do not understand economics it’s dark magic and seems to just conjure results out of the void. Only in economics are obvious good things like “My money is worth more” bad actually.
But the capitalist profits are already accounted for when measuring trade balance. Obviously the capitalists are taking a cut on every transaction, but that is technically still money going one way or the other
Yes but somtimes money just apears from thin air. So coutry a can buy a shipment of grain from coutry b and conjure money to pay without an equivalent sale to any other coutry.
So for example visiting America will be very expensive for people from other countries now. But it'll be relatively cheap for an American to visit the other country
It's a problem for price sensitive industries since an increase in price means people won't buy the product at all. Cheap imports also means less incentive for domestic production which can be bad
Still, for stuff like the gas inudstry it's a huge win because EU is gonna keep paying no matter what
If money is worth more and more then you’re not gonna use it as a medium of exchange and instead use it as a store of value by socking it under your mattress.
Currency increasing in value isn't necessarily good for the economy though
It’s great for people rich enough to go on vacation in Europe though!
Relative currency increases are great for import markets. Unfortunately, I would need a functional supply chain and a relatively stable geopolitical environment to access those high-value/low-cost imports from within the state with the currency-of-increasing-value.
And with energy costs on the rise, all the arbitrage I get by shopping for pears picked in Hondurus and canned in Vietnam vanishes in the face of S&H fees.
Which I still really don’t understand
The downside is mainly that your exports gets a lot more expensive , which makes it harder to compete in an international market and therefore negatively impacts balance of trade.
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But doesn’t that mean people pay more for your exports and therefor you can buy more of other countries’ goods with that increased value?
Which could be useful if the US was an export economy.
The US is a net importer but not by an enormous margin, and it's still the second biggest exporter in the world.
Okay that’s actually another thing I don’t understand, don’t import and export values kinda have to match due to the fact that trade is an exchange?
Like maybe not 1-1 for every country we’re trading with, but ultimately you’re trading labor performed in one place for labor performed in another, and doesn’t that all ultimately have to even out?
I do not understand economics it’s dark magic and seems to just conjure results out of the void. Only in economics are obvious good things like “My money is worth more” bad actually.
deleted by creator
It doesn't really even out because the buyer isn't paying only for labor and production cost, but also for the capitalist to make a profit.
But the capitalist profits are already accounted for when measuring trade balance. Obviously the capitalists are taking a cut on every transaction, but that is technically still money going one way or the other
Yes but somtimes money just apears from thin air. So coutry a can buy a shipment of grain from coutry b and conjure money to pay without an equivalent sale to any other coutry.
People just switch to somewhere else that has cheaper exports (assuming intact globalized supply chains and alternatives, which is a big assumption)
Yeah you can buy more for other people's good
But other people will buy less of your goods.
So for example visiting America will be very expensive for people from other countries now. But it'll be relatively cheap for an American to visit the other country
It's a problem for price sensitive industries since an increase in price means people won't buy the product at all. Cheap imports also means less incentive for domestic production which can be bad
Still, for stuff like the gas inudstry it's a huge win because EU is gonna keep paying no matter what
Exported US LNG growing relatively more expensive by the day, while Europeans just had their last chance towards recovery blown up in 4 places
If money is worth more and more then you’re not gonna use it as a medium of exchange and instead use it as a store of value by socking it under your mattress.