- Jun 15, 2009
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Jagartrott said:You're mixing up two things. I was talking to you about how a currency that lost some value can actually be a good thing. It's not a zero sum game. If you're raw material costs make up 20%, and labour 60%, how can that be zero? Have you heard CEOs of euro-firms depending on export about the euro weakening?
OK, I give you that... Depens on how much you are dependend on raw materials.
But I guess you are not a business man selling things outside your country.
A currency that loses value can be a good thing. OFC it can. No doubt about it. Good for currency traders, good for multi national co-orperations, good for people/nations/companies having debts in exactly that currency.
But for the majority it is really bad. Those who work for their money, can´t export their manpower, can´t gamble in currencies, can´t invest in stocks, but having to pay (rising) market prices for house rents, food, clothes, holidays once in a while, daily things... a currency getting soft is always going to explode in inflation. Always!
The lie to us was that the Euro is going to be a hard currency like the old DM (I never bought that story BTW. If they sell you things like a barker, you have to assume you get cheated). In reality we got a soft one like the old drachma.
And finally, if your business is export depending, you know something is going really bad in your country. That is the case for Germany with major problems of domestic demand.
Now what was/is good about being "export champ"? Aside from big business: NOTHING!
First we produce, then we sell to others, then we pay the things we sold (while the profits went to big business). What a farce!
