Author Topic: Class War and Other Predictions  (Read 2075 times)

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Xavier_Onassis

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Re: Class War and Other Predictions
« Reply #15 on: January 24, 2008, 07:23:00 AM »
First you say,


"Oil ought to be more realisticly priced."

THEN you say:

"The natural  operation of the market often does the right thing and usually should not be interfered with."

Things we export will benefit in exactly the same measure as things we import will suffer.


So one can only wonder, why is it that you assume that oil is not already realistically priced?
It is priced based on the anticipated supply and demand. There is no "right thing" involved, it is not a matter of right and wrong. It is not immoral to sell oil for $3.00 a barrel or $300.

As an individual, you have no control over how much the price of exports is, and if you are in this business, the boss has total control over how much of this you will be paid.

You might have a modest control over the imported products you buy: you can buy a Mercedes, a Toyota or a Hyundai, and you can see where to get the best deal. You can also buy a car used.

This is why a weak dollar is more inferior to you as a consumer than a strong dollar.
You also have to allow for the fact that imports from abroad and imports made with raw materials from abroad will cause inflation, and you will have to pay more for the same items. Paying more is, need we mention this?, a disadvantage for you.
« Last Edit: January 24, 2008, 11:13:09 AM by Xavier_Onassis »
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Michael Tee

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Re: Class War and Other Predictions
« Reply #16 on: January 24, 2008, 09:40:28 AM »

<<Was Saud Arabia ever hurt by a strong dollar?>>

Would obviously have been if it had been importing more than it exported. 

Anyone who imports anything is hurt by a stronger currency of any nation that exports to him.  If the country as a whole has more exports than imports, the hurt to the individual importers is overbalanced by the gain of all the exporters.  If a country imports more than it exports, the overall effect of the stronger other currency is harmful.


Plane

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Re: Class War and Other Predictions
« Reply #17 on: January 25, 2008, 03:42:26 AM »

<<Was Saud Arabia ever hurt by a strong dollar?>>

Would obviously have been if it had been importing more than it exported. 

Anyone who imports anything is hurt by a stronger currency of any nation that exports to him.  If the country as a whole has more exports than imports, the hurt to the individual importers is overbalanced by the gain of all the exporters.  If a country imports more than it exports, the overall effect of the stronger other currency is harmful.




Simply not true.

If I sold you a thousand board feet of Georgia Yellow Pine  for a thousand Loonies , I have a thousand loonies and you have a thouand loonies worth of wood , which of us is thereby the looser?

If I purchased from you a thousand board feet of Canadian white fir and gave up a thousand dollars I would have a thousand  dollars worth of wood and you would have a thousand dollars.

This is axiomatic and would work the same if a Canadian Dollar was worth ten times what it is or the dollar was worth a tenth.

The flux over time causes loss or gain to the holder of the currency or commodity , but the lumberjack can get what the wood is really worth in whatever currency at auction.

I don't think the Dollar is going to fall so far that any real problem will be caused , the tide rolls in the same number of times that the tide rolls out.

And if the Dollar does fall very far , is the Canadian lumberjack or the American one at disadvantage at the auction?


Michael Tee

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Re: Class War and Other Predictions
« Reply #18 on: January 25, 2008, 07:58:32 AM »
plane, you're writing nonsense.  Especially the lines that you called "axiomatic."  They're not only axiomatic, they are completely irrelevant to the issue.

Here's what you need to grasp:

1.  All national currencies are commodities.  That is, there's a market for them just like there's a market for lumber, wool, manganese, pork bellies or soybeans.  Every fucking minute of every fucking day, for every fucking currency in the world, somebody is buying and somebody is selling.  As we speak, it is virtually certain that some guy in Shanghai is selling Indian rupees electronically to some guy in London

2.  Like any other commodity, the price of any national currency will fluctuate many times a day due to the law of supply and demand.

3.  One source of demand for U.S. dollars - - and a very important part of the demand - - is the fact that the U.S. dollar is probably the no. 1 international reserve currency.  Why?  Because everyone needed them.  Everyone, for example, who imported oil needed them.  Because all the major petroleum exporters wanted U.S. dollars for their product.  Everyone who bought anything "made in the U.S.A." needed them.  Every foreign tourist planning to visit Disneyland or Manhattan needed them.  So that any currency trader anywhere in the world needed to keep a stock of U.S. dollars on hand.  He might not have needed a little stash of Egyptian or Peruvian currency, but he'd look pretty fucking stupid if some guy called up needing $100,000 U.S. and he had to say, I don't have any U.S. dollars to sell, would you like some Egyptian pounds?  I've got plenty of Egyptian pounds."  He needed U.S. dollars on hand (in reserve) because there was a demand for U.S. dollars.  He needed LOTS of U.S. dollars on hand because there was a BIG demand for them.

4.  If the major petroleum exporters decided (as Saddam was thinking of deciding) that they wouldn't sell their oil for dollars, but for euros, this would be a catastrophic DROP in demand for U.S. dollars and a corresponding surge in demand for euros.  Anyone holding dollars in reserve would find a large part of his dollar holdings didn't have to be held.  He needs more euros and less dollars.  Anyone holding Indian rupees who would have bought dollars and/or euros with them now sees that he needs euros more than he needs dollars, the euros will be easier to sell, more demand now for them than for dollars.

5.  Once international demand for the U.S. dollar drops (as it certainly would if it were no longer the international currency of reserve) every import costs Americans more.  Take the home builder, your example:  he has to pay for Canadian lumber, Italian tiles and marble, Chinese lighting and fixtures, copper wiring, even his domestic products have to be shipped to him with imported fuel running the trucks:  every foreign-sourced import costs more in American dollars.  He or his suppliers have to pay more in American dollars for every foreign import going into every home he builds.

If you still don't get the picture - - the homebuilder has to charge more for his homes.  The clothing retailer has to charge more for his clothing.  The gas station has to charge more for his gas.  The coffee seller has to charge more for his coffee.  What don't you get?  Your standard of living up to now was based on imports you could afford.  After now, your demands, desires and tastes will be the same, the producers of all your foreign imports will want the same price for them, the only thing changed is that your U.S. dollar will no longer buy the currency to pay for the imports that you were used to having.  You will no longer be able to afford what you were used to having.  That is the classic definition of a declining standard of living.

Sorry plane but I am not going to waste any more time on this.  If you get it, you get it, if you don't get it, you don't get it.  It is just frustrating because it is so fucking elementary.

_JS

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Re: Class War and Other Predictions
« Reply #19 on: January 25, 2008, 11:52:48 AM »

Oil ought to be more realisticly priced.
The natural  operation of the market often does the right thing and ususally should not be interfered with.

I find this fascinating.

Your statement, the natural operation of the market often does the right thing...

Many economists, even those neoliberals who are dominant in theory right now, would never make such a presumption of value judgement. You've gone from the realm of economics and mathematics to sociology, psychology, ethics, even religion.

Why? I'm asking sincerely. I'm very curious. Why do you have faith that the "market" a manmade creation will "do the right thing?" What is the "right thing" that the unfettered market will do?
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Michael Tee

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Re: Class War and Other Predictions
« Reply #20 on: January 25, 2008, 12:52:50 PM »
2002 Nobel Prize winner for economics, Daniel Kahneman on the "wisdom" of the markets:

<<Daniel Kahneman has integrated insights from psychology into economics, thereby laying the foundation for a new field of research. Kahneman?s main findings concern decision-making under uncertainty, where he has demonstrated how human decisions may systematically depart from those predicted by standard economic theory. Together with Amos Tversky (deceased in 1996), he has formulated prospect theory as an alternative, that better accounts for observed behavior. Kahneman has also discovered how human judgment may take heuristic shortcuts that systematically depart from basic principles of probability. His work has inspired a new generation of researchers in economics and finance to enrich economic theory using insights from cognitive psychology into intrinsic human motivation.>>

Instead of (or in addition to) applying Kahneman's and Tversky's theories to the "wisdom" of business decisions,  someone ought to apply it to the "wisdom" of guys like plane (no disrespect intended) who seem to be reasonably intelligent and well-disposed, yet form the backbone of support for fascists and militarists such as (classic example) your  current "President,"  even when it clearly runs counter to their own best interests.  Why is this mind-set so easily convinced of the "merits" of laissez-faire capitalism, or of America's so-called "benevolence," or (other side of the coin) of the irrationality of anti-American feeling anywhere in the world?  IMHO, people of this mind-set, if properly understood, could be appealed to on their own terms.  So far, no liberal argument seems able to reach them, which you've probably seen from this and other threads.  Not only do they stubbornly deny the obvious, they will defend the irrational to their last breath. 

Obviously, the loss of a son in a pointless foreign war seems to get through to at least some of them (there was a horrible example of this in the documentary film "Making Sense of the Sixties," in a mum & dad interview, where the dad, a former war supporter and "patriot," tears up and his lower lip starts to tremble as he describes how he came to grips with his past mistakes, how dumb he'd been, and worst of all, how he never urged his son to get away to Canada when he had the chance.  But why does it have to get to this point before the arguments finally hit home?  That's what gets me.