Play Nice 45th President of the United States: Donald Trump - Part 3

[Seeds]

Not quite

A currency rises when people need to buy it

Fewer us imports means less demand for us dollars

Us imports are paid in foreign currency not Us dollars. Decline in imports to the US reduces demand for foreign currency which increases the value of the US dollar against foreigner currency.

 

[Ned_Flanders]

Us imports are paid in foreign currency not Us dollars. Decline in imports to the US reduces demand for foreign currency which increases the value of the US dollar against foreigner currency.

Global trade currency is USD. No one sells in their local currencies

Usd dominates, with some euro, and then yen/yuan/gbp mopping up the rest

 

[Ned_Flanders]

Us imports are paid in foreign currency not Us dollars. Decline in imports to the US reduces demand for foreign currency which increases the value of the US dollar against foreigner currency.

Apologies, wrote imports instead of exports. So this corrcet is right

A protectionist usa will hurt its exports more than imports (this is why i had imports on my mind)

Usa exports in ag are easily substitutable, and machinery is easily targeted with growing alternatives in asia and eu

The imports is a different story. The consumer goods the us imports are only substitutable if the tariff is around 200%+ because of the labour cost differences. So the tariffs will earn some nice tax revenue, but they wont drastically change purchasing decisions and they will raise inflation.

 

[Maggie5]

Us imports are paid in foreign currency not Us dollars. Decline in imports to the US reduces demand for foreign currency which increases the value of the US dollar against foreigner currency.

Not true, I imported from India, Malaysia and China, all had to be paid in $US.
I managed to negotiate with Malaysian supplier but the other two countries, no way, especially China.

 

[Mofra]

Global trade currency is USD. No one sells in their local currencies

Is that true for LME as well?
As I understand it the LME is the most influential market for raw ores with the exclusion of iron ore which is normally pegged to the first FOB contract of the season.

 

[Ned_Flanders]

Is that true for LME as well?
As I understand it the LME is the most influential market for raw ores with the exclusion of iron ore which is normally pegged to the first FOB contract of the season.

I believe so. The company i worked for some time ago was one of the major ore traders on the planet, and everything we did was pretty much usd.

I know a number of times various parties have tried to change this, but it never works. A common currency in a market makes tracking price movements eaiser and more transparent.

Even 20kg blocks of nz cheese to japan get sold in usd

 

[Seeds]

Global trade currency is USD. No one sells in their local currencies

Usd dominates, with some euro, and then yen/yuan/gbp mopping up the rest

no thats not true. everybody gets paid in their domestic currency in the end as they can only use their domestic currency to buy goods and services in their own country. With the exception of some small economies whose currencies have collapsed. If I export a good to the US then I may get paid in US dollars or Aud dollars depending on the contract. If it is the former then I will convert the money back to Aud when I get back to australia so I can spend the income earned from my export sale in the country that I live. Net change in demand for Us dollars in both examples is a fall and by the same amount. Thus in both examples the value of the US dollar falls relative to the AUD.

The concept of world currencies is completely misunderstood. The only advantage of it is reduction in exchange rare transaction costs. Its fairly insignificant. unless ofcourse you are doing your transactions at airports where they charge a ridiculous amount. But only tourists use airports.

 

[GreyCrow]

The Fakeys have been announced!

You would have been shattered to have missed out

 

[Ned_Flanders]

no thats not true. everybody gets paid in their domestic currency in the end as they can only use their domestic currency to buy goods and services in their own country. With the exception of some small economies whose currencies have collapsed. If I export a good to the US then I may get paid in US dollars or Aud dollars depending on the contract. If it is the former then I will convert the money back to Aud when I get back to australia so I can spend the income earned from my export sale in the country that I live. Net change in demand for Us dollars in both examples is a fall and by the same amount. Thus in both examples the value of the US dollar falls relative to the AUD.

The concept of world currencies is completely misunderstood. The only advantage of it is reduction in exchange rare transaction costs. Its fairly insignificant. unless ofcourse you are doing your transactions at airports where they charge a ridiculous amount. But only tourists use airports.

Youre wrong that everyone converts back. Much of the currency remains usd because items you need to buy (freight, capital equipment, insurance, etc) are bought on the global market in usd

Also how many mines here (for example) are owned by australian entities. A chinese owned mine (for example) will only send back the bare minimum to avoid a transfer pricing charge, and convert to aud as little as they need to fund local ops.

 

[Seeds]

Not true, I imported from India, Malaysia and China, all had to be paid in $US.
I managed to negotiate with Malaysian supplier but the other two countries, no way, especially China.

ok but that money then eventually gets converted back into domestic currency by the exporter. An indian exporter buys a house, food ,clothes etc with rupees, not US dollars. Net change in currency demand is a reduction in US dollars. The only time it doesnt get converted into domestic currency is if he uses his export earnings to buy Us exports. But then its the increase in Us exports that drives demand for the Us dollar. Not the increase in US imports.

 

[Seeds]

Youre wrong that everyone converts back. Much of the currency remains usd because items you need to buy (freight, capital equipment, insurance, etc) are bought on the global market in usd

Also how many mines here (for example) are owned by australian entities. A chinese owned mine (for example) will only send back the bare minimum to avoid a transfer pricing charge, and convert to aud as little as they need to fund local ops.

yes but that only occurs if it ultimately ends up as an increase in US exports as per my last post. And then the result is no change in value of US dollars, not an appreciation. To work out the net change in demand for the currency you need to follow the trail until it is ultimately spent (or put under the mattress as savings). All the other transactions cancel each other out in terms of impact on currency value.

 

[FireKrakouer]

You would have been shattered to have missed out

View attachment 452200

PalaceGun took home the choccies on this one. I was robbed!

 

[Ratts of Tobruk]

yes but that only occurs if it ultimately ends up as an increase in US exports as per my last post. And then the result is no change in value of US dollars, not an appreciation. To work out the net change in demand for the currency you need to follow the trail until it is ultimately spent (or put under the mattress as savings). All the other transactions cancel each other out in terms of impact on currency value.

I don't follow the logic. If the US step back from global trade, other places would get that business instead, meaning there would be more demand for alternate currencies, right? We know a lot of international trade uses USD, but it doesn't have to. Are you thinking that is somehow outweighed by a demand for USD to buy access, or are you imagining it means more business 'returning' to the US and so less OS manufacturing?

I assumed USD was going down because the US just committed to giant tax cuts, which means the debt risk is higher. What's more the 'one off repatriation' tax incentivises big multinationals to bring cash back into the US, cash that was otherwise just building in the coffers of companies like Apple. So you have that cash being spent (more supply, rather than their being a demand to buy it), and you also have less demand for USD because they have a buffoon in charge and are going to ramp up their already massive debt.

 

[Happy Mastenator]

Just amazing.

 

[PalaceGun]

PalaceGun took home the choccies on this one. I was robbed!

I don’t own a set of turntables like yours, Larry.

All facts and no fox from my neck of the woods.

 

[Todman]

apparently the Republicians are excited about something to do with FISA.

 

[Seeds]

I don't follow the logic. If the US step back from global trade, other places would get that business instead, meaning there would be more demand for alternate currencies, right? We know a lot of international trade uses USD, but it doesn't have to. Are you thinking that is somehow outweighed by a demand for USD to buy access, or are you imagining it means more business 'returning' to the US and so less OS manufacturing?

I assumed USD was going down because the US just committed to giant tax cuts, which means the debt risk is higher. What's more the 'one off repatriation' tax incentivises big multinationals to bring cash back into the US, cash that was otherwise just building in the coffers of companies like Apple. So you have that cash being spent (more supply, rather than their being a demand to buy it), and you also have less demand for USD because they have a buffoon in charge and are going to ramp up their already massive debt.

if the US stepped back equally on both the export and import side there would be no impact on the value fo the us dollar. However their plan is to just reduce imports by encouraging us firms overseas to come back and imposing some sort of penalty on mexico and possibly china.

If they just try to reduce imports through anti trade policies or penalties on overseas firms then demand for foreign currency falls relative to US dollars and thus Us dollar will sky rocket. The funny thing is that the higher us dollar will lead to an increase in imports again and decrease in exports. Net impact is no change in net trade and a higher US dollar as a result of anti trade policies. Tariffs and anti trade policies have no real impact on net trade balances, only the source of trade and overall level of imports and exports. Trade balances are determined by the balance of savings vs investment. Trumps tax cuts and infrastructure plan actually reduces the savings to investment ratio and thus will increase net imports. Every economist in Washington from both side of politics has told him this. But he chooses to ignore.

You are right that concerns of fiscal debt problems in a country tend to reduce the demand for domestic currency. This may have played some role in the recent small decline. However I dont think that would have much influence on the US dollar yet because the US net external debt is not significant yet, although it will increase with these tax cuts. This could be more an issue in four years time if we get four years in a row of high fiscal deficits in excess of 6 per cent of gdp. which is possible with trumps foolish tax plan. The reason the us dollar has fallen is because other countries are making announcements they will soon tighten monetary policy.

 

[Todman]

http://www.thegatewaypundit.com/201...warns-devastating-fisa-memo-set-expose-obama/

Lawmakers from Rep. Matt Gaetz (R-FL) to Rep. Lee Zeldin (R-NY) have called for the classified memo’s immediate release. According to Fox News contributor Sara Carter, the contents of the memo are so “explosive,” that it could end special counsel Robert Mueller’s Russia probe once and for all.

Former Secret Service agent Dan Bongino warned the release of the FISA report will destroy the image of his former boss Barack Obama.

“Take it to the bank, the FBI/FISA docs are devastating for the Dems. The whole image of a benevolent Barack Obama they’ve disingenuously tried to portray is about to be destroyed. The real Obama, the vengeful narcissist, is going to be exposed for all to see,” tweeted Dan Bongino

 

[FireKrakouer]

View attachment 452231
apparently the Republicians are excited about something to do with FISA.

Looks like some serious s**t is about to go down.

 

[Happy Mastenator]

http://www.thegatewaypundit.com/201...warns-devastating-fisa-memo-set-expose-obama/

Lawmakers from Rep. Matt Gaetz (R-FL) to Rep. Lee Zeldin (R-NY) have called for the classified memo’s immediate release. According to Fox News contributor Sara Carter, the contents of the memo are so “explosive,” that it could end special counsel Robert Mueller’s Russia probe once and for all.

Former Secret Service agent Dan Bongino warned the release of the FISA report will destroy the image of his former boss Barack Obama.

“Take it to the bank, the FBI/FISA docs are devastating for the Dems. The whole image of a benevolent Barack Obama they’ve disingenuously tried to portray is about to be destroyed. The real Obama, the vengeful narcissist, is going to be exposed for all to see,” tweeted Dan Bongino

Seems legit. As if the GOP wouldn't have released damming reports on obama yesterday if they had them.

Also love an article that writes up the content of a tweet, then posts the tweet straight after. Especially when entire article is all tweets

 

[FireKrakouer]

Seems legit. As if the GOP wouldn't have released damming reports on obama yesterday if they had them.

Also love an article that writes up the content of a tweet, then posts the tweet straight after. Especially when entire article is all tweets

There are some posters I like, some that I dislike, and some that I feel sorry for. You are one that I feel sorry for.

Brace yourselves.

 

[Scallop Industry Thug]

Will Hillary get impeached?

 

[GreyCrow]

May as well start with the FISA allegations in a new thread

#10000

 

[Happy Mastenator]

There are some posters I like, some that I dislike, and some that I feel sorry for. You are one that I feel sorry for.

Brace yourselves.

Don't feel sorry for me, I have a wonderful life. No complaints for me.

I'm sure you have a good one as well, and your mum hardly bothers you about your messy room anymore.

 

[FireKrakouer]

Don't feel sorry for me, I have a wonderful life. No complaints for me.

I'm sure you have a good one as well, and your mum hardly bothers you about your messy room anymore.

Lol - I'll clean it tomorrow!

Genuinely glad to hear you're a happy chappy. I certainly don't wish anything negative upon people just for dissagreeing with my opinions. Just be prepared that the coming days and weeks won't be good for the Dems.