If Germany is export driven how is it able to stay competitive against China et al.

Discussion in 'Economics' started by short&naked, Jan 28, 2013.

  1. morganist

    morganist Guest

    I write quite heavily about this kind of stuff in my book, which you can get below for a moderate price or you can borrow it for free through the amazon lending library. Alternatively you can get more information on the Euro Crisis, not as much or as detailed, from my euro crisis page on my blog, which is below the link to my book.

    http://www.amazon.co.uk/Aggregate-C...cy-Weakness/dp/1613642075/ref=tmm_pap_title_0

    http://morganisteconomics.blogspot.co.uk/p/euro-crisis.html

    There are some linked articles below the scribd documents.

    My personal view is that the foremer eastern block nations will go into crisis soon and that will change the situation.
     
    #11     Jan 28, 2013
  2. Europeans negotiated trade agreements that work. Parity, one Euros' worth of export allows one Euros' worth of import. The US of A does these "free market" things left over from the Reagan era and watches as all it's jobs leave the country.
     
    #12     Jan 28, 2013
  3. But they are Germans:mad:
     
    #13     Jan 29, 2013
  4. hftvol

    hftvol

    Simple answer: less leftover for shareholders. Many German companies, especially those that are niche players and which produce high tech or other hard to imitate stuff are mid-sized, sometimes family owned, companies that do not whore themselves out to financiers (aka. Shareholders) . They pay way above minimum wage even though their employees may not be unionized and produce environmental or automotive related products that are top notch and in high demand yet hard to imitate (many of their products are nowadays copycat detectable through hidden chemical compounds applied to the original. Even in china it's hard for law courts nowadays to through out a suit with clear merits even if it was brought about by a foreign firm) .

     
    #14     Jan 29, 2013
  5. hftvol

    hftvol

    Nobody in Germany nor china finances stoves or ovens, people pay cash. It's not the U.S. maybe that is a related issue: the middle class in the US is close to broke. The one in China is working so hard they bend over backward to earn more to buy that fancy oven. the difference now comes in place that nobody in China would want to buy a crappy GE oven or Buick or Cadilac if they can afford Audi, BMW or other German brands. That's the real difference. There are American firms as well which produce superior products but often they produce mass market products that they are forced to price at steep discounts in order for their target consumers to afford them (see msft, food names, and the like).

     
    #15     Jan 29, 2013
  6. hftvol

    hftvol

    Sorry but I think that has always been a crap argument. Many German products that really make a difference in the trade balance are such that target clientele and markets that would buy the very same product no matter whether eur.usd trades at parity or 1.5. If you look at where the dollar traded against DM before euro came about and how the DM was fixed against Euro you notice that German competitiveness really did not benefit a whole lot from exchange rate differentials. Seriously take a look for yourself before you believe this crap.

     
    #16     Jan 29, 2013
  7. Yeah..what you say may be true....but we kicked Germany's Ass in World War II
     
    #17     Jan 29, 2013
  8. morganist

    morganist Guest

    If the DM was fixed to the Euro then it would not be the same as using the Euro for many reasons. I don't think that is a valid argument.
     
    #18     Jan 29, 2013
  9. feng456

    feng456

    You are from Russia?
     
    #19     Jan 29, 2013
  10. nope...but we kicked the USSR's ass so hard during the cold war that they closed down shop and went out of business
     
    #20     Jan 29, 2013