Welcome Guest [Log In] [Register]


Reply
Iron ore - supply and demand rides again
Topic Started: 30 May 2014, 03:23 PM (44,293 Views)
Lef-tee
Default APF Avatar


Quote:
 
I would be interested in reading more on reverse dutch disease, I've found this, but it doesn't explain why


It seems like a serious article, though the sidebar of other tops stories is swimming in more tinfoil hats than you can poke a stick at :) Yeah, I would like to know more. I think you would have to research fairly long, hard and deep before reaching any solid conclusions.

Australia pretty much gave up on trying to compete in that arena quite a while ago and became content to import most of such consumables. In other countries, that approach might be all but impossible due to local politics that force their policy makers to ensure their industries remain alive and employing, they may have special market access that Australia lacks etc. In fact, Australian markets are probably some of the most open in the world - we are happy for things to drift wherever the wind may blow us while most other countries place a higher value on their manufacturing sectors and ensure they remain going accordingly. The fact that our policy makers are probably among the least willing anywhere to ensure support for local manufacturing likely acts as a deterrent in itself to investment - why go to the trouble of setting up here when you will receive very limited support but will be competing against those who are more heavily supported by their governments?

But I remain curious as to Peter's limited engagement with this question - Peter is a straight talker who engages with calm rationality with no trash talk or weasel tactics. It seems a little out of character for him to say something and then clam up.




















This is the sort of thing I'm talking about...

Quote:
 
The European Commission will launch an investigation by the end of this month into alleged dumping of stainless steel into the European Union by Chinese and Taiwanese producers, a leading executive said.

The case could be the first of a number the European steel industry brings in the coming months to counter record exports from the world’s largest steel producer, China. Manufacturers there are boosting output to new highs, despite a domestic slowdown.

“These trade cases against cold-rolled stainless from China and Taiwan have been brought up to the Commission and to my knowledge the Commission has agreed to file them,” said Wolfgang Eder, chief executive of Austrian steelmaker Voestalpine , and former president of steel industry body Eurofer.

“We are expecting more anti-dumping (action) in the second half. I can confirm imports into Europe are going sharply up,” he said in an interview with Reuters in London.


Quote:
 
A threat to steel jobs across the country sparked a rally in Fairfield this afternoon. More than a thousand people came out to the “Save Our Steel Jobs” rally at the US Steel plant.

Congresswoman Terri Sewell, Congressman Spencer Bachus, Congressman Robert Aderholt and several other local officials came out in support of steel jobs. The rally was hosted by the Alliance for American Manufacturing. President of the group, Scott Paul, says steel jobs are at risk because foreign steel is being imported below the market price. ”These domestic producers are getting undercut by steel from Korea that’s getting undercut at below market prices which is not competitive,” Paul explained.

…The US Department of Commerce eventually placed tariffs on steel imported from China. That helped make the playing field more competitive for American steel producers. Now manufactures are asking the Department of Commerce to do the same thing with South Korea.


Two of the worlds biggest economies will highly likely move to protect their steel manufacturing jobs. We would probably be happy to let ours dissapear.



Link here
Edited by Lef-tee, 18 Jun 2014, 07:21 AM.
Profile "REPLY WITH QUOTE" Go to top
 
John Frum
Member Avatar


newjez
18 Jun 2014, 02:58 AM
I worry about your sanity sometimes.
A sarcastic diatribe is way more interesting than that incomprehensible gibberish he used to post. Worth taking him off ignore for.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


John Frum
18 Jun 2014, 08:37 AM
A sarcastic diatribe is way more interesting than that incomprehensible gibberish he used to post. Worth taking him off ignore for.
I took him off ignore ages ago. I've only got the slut on ignore now.
Lef-tee
18 Jun 2014, 07:10 AM


It seems like a serious article, though the sidebar of other tops stories is swimming in more tinfoil hats than you can poke a stick at :) Yeah, I would like to know more. I think you would have to research fairly long, hard and deep before reaching any solid conclusions.

Australia pretty much gave up on trying to compete in that arena quite a while ago and became content to import most of such consumables. In other countries, that approach might be all but impossible due to local politics that force their policy makers to ensure their industries remain alive and employing, they may have special market access that Australia lacks etc. In fact, Australian markets are probably some of the most open in the world - we are happy for things to drift wherever the wind may blow us while most other countries place a higher value on their manufacturing sectors and ensure they remain going accordingly. The fact that our policy makers are probably among the least willing anywhere to ensure support for local manufacturing likely acts as a deterrent in itself to investment - why go to the trouble of setting up here when you will receive very limited support but will be competing against those who are more heavily supported by their governments?

But I remain curious as to Peter's limited engagement with this question - Peter is a straight talker who engages with calm rationality with no trash talk or weasel tactics. It seems a little out of character for him to say something and then clam up.




















This is the sort of thing I'm talking about...







Two of the worlds biggest economies will highly likely move to protect their steel manufacturing jobs. We would probably be happy to let ours dissapear.



Link here
The basic premise makes sense. Mining decreases, currency falls, inflation of imported goods increases, creates opportunities for internal manufacturing. But im not sure if would be easy to get foreign investment. I can see how a govt could screw things up by defending the currency, or would that increase foreign investment? Still, if the govt played ball, I can see how it would work in theory. I'd like to see where it has worked in practice though.
Edited by newjez, 18 Jun 2014, 09:10 AM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
Lef-tee
Default APF Avatar


In theory the opportunities for domestic manufacturing should surge as the currency devalues, making imports more expensive. But is that the way it will work in practice I wonder?

Quite a bit of what we call manufacturing in Australia would probably be more accurately termed "assembling a kit made largely from imported parts". If the dollar were to crash, the cost of importing the parts would surge.

In any case, we would still be trying to compete with little assistance from government, against foreign manufacturers whose governments consider what they do important enough to protect them and ensure they remain competitive in the international marketplace.
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


Lef-tee
18 Jun 2014, 07:10 AM
But I remain curious as to Peter's limited engagement with this question - Peter is a straight talker who engages with calm rationality with no trash talk or weasel tactics. It seems a little out of character for him to say something and then clam up.
Sorry I'm very very busy at the moment, both in life and in business. Also this isn't a thread that I hang out on.

b_b made an excellent post on this at MB recently where he used the scenario where we invented a cure for cancer I think and we had sole rights to export the drug around the world, but I can't locate it for you. It was something like that, I should have copied it.

Iron ore brings in a lot of foreign currency but it doesn't bring any $AUD. That forces up the value of the $AUD which causes a recession in all of the non mining industries in Australia. We have had that in NSW and Victoria as well as the other states to some degree for the last decade.

That was great for many of us as TV sets fell from $12,000 to $700 etc but it hurt all of the non mining industries and it has cost jobs. Apart from WA the rest of the country would have been better off without the mining boom.

As well as manufacturing it has hurt primary industries, overseas education, film and television, tourism, many seemingly small industries that employ a lot of people. If iron ore fell over today tourism in Qld would boom - seriously you already know this. Most people would cope if our dollar fell to 70 cents USD it would just mean that we can't afford imports and the price of everything would rise, including house prices as unemployment fell and wages needed to be increased to meet the rising cost of imported goods.

Housing bulls cheering higher iron ore prices and bears hoping that prices crash have both got it the wrong way around.

Funny but I asked David what would happen if iron ore fell substantially and he immediately answered that house prices would rise - then he immediately deleted his post.

It's a strange world isn't it.



Edited by peter fraser, 18 Jun 2014, 03:37 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


peter fraser
18 Jun 2014, 03:32 PM
Sorry I'm very very busy at the moment, both in life and in business. Also this isn't a thread that I hang out on.

b_b made an excellent post on this at MB recently where he used the scenario where we invented a cure for cancer I think and we had sole rights to export the drug around the world, but I can't locate it for you. It was something like that, I should have copied it.

Iron ore brings in a lot of foreign currency but it doesn't bring any $AUD. That forces up the value of the $AUD which causes a recession in all of the non mining industries in Australia. We have had that in NSW and Victoria as well as the other states to some degree for the last decade.

That was great for many of us as TV sets fell from $12,000 to $700 etc but it hurt all of the non mining industries and it has cost jobs. Apart from WA the rest of the country would have been better off without the mining boom.

As well as manufacturing it has hurt primary industries, overseas education, film and television, tourism, many seemingly small industries that employ a lot of people. If iron ore fell over today tourism in Qld would boom - seriously you already know this. Most people would cope if our dollar fell to 70 cents USD it would just mean that we can't afford imports and the price of everything would rise, including house prices as unemployment fell and wages needed to be increased to meet the rising cost of imported goods.

Housing bulls cheering higher iron ore prices and bears hoping that prices crash have both got it the wrong way around.

Funny but I asked David what would happen if iron ore fell substantially and he immediately answered that house prices would rise - then he immediately deleted his post.

It's a strange world isn't it.


I agree with much of this, but then I think there are variables as well, especially how the govt treats interest rates during the transition. They would have to ignore the inflation, but also court o/s investment.

I can see several models playing out. I can't see wages increasing under this scenario, neither house prices. I would guess most house building materials would be locally sourced, so wouldn't suffer the inflation.

But I have yet to read a detailed study of this playing out. I find this strange, as we live in a boom bust world, I thought the net would be flooded with stuff.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


newjez
18 Jun 2014, 04:03 PM
I agree with much of this, but then I think there are variables as well, especially how the govt treats interest rates during the transition. They would have to ignore the inflation, but also court o/s investment.

I can see several models playing out. I can't see wages increasing under this scenario, neither house prices. I would guess most house building materials would be locally sourced, so wouldn't suffer the inflation.

But I have yet to read a detailed study of this playing out. I find this strange, as we live in a boom bust world, I thought the net would be flooded with stuff.
yes there would be many possible variables, and no one can predict them all.

Having a lower AUD is a bit like an old fashioned tariff. that's why the USA, Europe and China plus a number of other countries have been pushing their currencies lower.

People forget that Britain became an economic and industrial powerhouse on the back of tariffs that restricted imports. It means that everyone subsidises industry, but then everyone gets a well paid job in return.

Well that's the theory. It won't work out as neat as that, but I can see that you understand the gist of this.

This is very MMT and the net is not flooded with it at all, just a few preachers is all they can muster - it will change though. people still think that a trade deficit has to be funded or paid back, so it concerns them no end.

Edited by peter fraser, 18 Jun 2014, 05:11 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


peter fraser
18 Jun 2014, 04:41 PM
yes there would be many possible variables, and no one can predict them all.

Having a lower AUD is a bit like an old fashioned tariff. that's why the USA, Europe and China plus a number of other countries have been pushing their currencies lower.

People forget that Britain became an economic and industrial powerhouse on the back of tariffs that restricted imports. It means that everyone subsidises industry, but then everyone gets a well paid job in return.

Well that's the theory. It won't work out as neat as that, but I can see that you understand the gist of this.

This is very MMT and the net is not flooded with it at all, just a few preachers is all they can muster - it will change though. people still think that a trade deficit has to be funded or paid back, so it concerns them no end.
The theory is very similar to how the UK recovered, with massive devaluation, and lots of inflation. Unemployment was relatively low, but there was no wage rises. However house prices are now increasing. It looks like the UK will be one of the first affected GFC countries to raise interest rates.

It will be interesting to See how it pans out.

This was under 'austerity' too.
Edited by newjez, 18 Jun 2014, 05:25 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


newjez
18 Jun 2014, 05:21 PM
The theory is very similar to how the UK recovered, with massive devaluation, and lots of inflation. Unemployment was relatively low, but there was no wage rises. However house prices are now increasing. It looks like the UK will be one of the first affected GFC countries to raise interest rates.

It will be interesting to See how it pans out.

This was under 'austerity' too.
Yes the austerity made the recovery in the UK take longer than it should have.

I think that central bankers like Bernanke and Carney understand perfectly, as does Lord Adair, but the politicians are just floundering.

They say they will help industry and then implement policies that hurt industry without realising.

http://www.bbc.com/news/business-27406084

that will help the UK.

Edited by peter fraser, 18 Jun 2014, 05:36 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


peter fraser
18 Jun 2014, 05:33 PM
Yes the austerity made the recovery in the UK take longer than it should have.

I think that central bankers like Bernanke and Carney understand perfectly, as does Lord Adair, but the politicians are just floundering.

They say they will help industry and then implement policies that hurt industry without realising.

http://www.bbc.com/news/business-27406084

that will help the UK.
It's about time. I'm lucky, as I've been receiving good pay rises, but I generally stick them in my pension or invest them, so I do appreciate how those on fixed wages have been suffering. Low cost supermarkets and high cost supermarkets have been booming. Whereas middle of the road have been suffering. Gives a good indication of how the nation was affected. Hopefully we will get some balance now.

F Europe starts qe and starts recovering, that will be a huge boost to the UK. All the Spanish may return home, trade will pick up, and rates may have to rise to slow things down. Not a bad thing as house prices are going crazy.
Edited by newjez, 18 Jun 2014, 07:49 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Fully Featured & Customizable Free Forums
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy