A trade surplus means that citizens of that country (say China) are working for the benefit of other countries. In return they get a bank statement denominated in fiat currency from a governemnt where they have no representation (USA).
Tell me how you think that is a good thing?
Catweasel say crikey.
Students of chin scratch probably not ask question and stare deep into iphone with vacancy in skull.
If china can sell pencils and a japan sell a cars to little pot belly to white picket gate keeper in a u.s. and a Australia, some mouse be a employ and pot belly can watch a kochie & cooking show.
No - the whole point of the discussion was to show that this is a bullshit claim. You have helped prove that enourmously, as all your questions have been able to be answered, easily. You asked for even ONE example of an Aussie non-mining exporter on par with your mediocre list, and you have been given several. I notice you have gone quiet on that point, while still sticking to your original claim?
Anyway, there is FAR more to the Australian economy than just mining. 44% of exports in 2012 were of things other than mining, and 80%+ of the local economy was made of activities (production of goods and services) that were not mining related.
But even so, mining is good as we make a shitload of extra export derived cash out of it as well and it supports some locally owned/based companies that are the largest and most successful of their kind in the world - ie nothing to be ashamed of. Sure beats Nokia - a failed mobile phone company that completely missed the smart-phone revolution, and Volvo - a declining manufacturer of very boring cars that happens to have a large market of very boring people who like them.
Where are those answers? Mediocre list? I still have not been given any Australian examples outside of mining that can compare to any of the companies I listed from a much smaller country.
Volvo is not declining. In fact its growing.
The argument was never about if you should be ashamed of mining or not. The issue we are debating is if Australia is good at anything except digging stuff out of the ground and inflating house prices. I argue that no, they are not. In fact I cant think of anything at all except for wines but that is not a big export.
Oh yeah but food is hardly exciting, it just lies around on the ground, you put it in boxes and send it overseas.
If we made Volvos or Nokia phones we would miles ahead as we would have a manufacturing industry with lots of semi-skilled factory workers with wrenches and soldering irons and other cool stuff.
Obviously we are doomed, we only have natural resources to sell overseas like minerals, plants, animals, animal secretions, tourism (mostly natural resource based) and overpaid services. Man we are stuffed.
Sweetdish
30 Sep 2013, 04:57 PM
The argument was never about if you should be ashamed of mining or not. The issue we are debating is if Australia is good at anything except digging stuff out of the ground and inflating house prices. I argue that no, they are not. In fact I cant think of anything at all except for wines but that is not a big export.
Qn: When will Australia run out of credit? Ans: Never, so long as we continue to use Australian dollars as our national currency.
Well then why do the banks bother with offshore borrowing at all?
If all the banks have to do is sit back and let the RBA shovel money at them why bother borrowing on wholesale markets?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Qn: When will Australia run out of credit? Ans: Never, so long as we continue to use Australian dollars as our national currency.
Well then why do the banks bother with offshore borrowing at all?
If all the banks have to do is sit back and let the RBA shovel money at them why bother borrowing on wholesale markets?
The AUD loan creates the AUD deposit. Even Macrobusiness agrees with this.
So bank balance sheets balance - always.
Why do Banks borrow overseas? There are two answers depending on your definition of overseas borrowings
1. Foreign owned domestic liabilities (deposits) This comes from our external accounts (CAD). When an Aussie decides to buy a honda, they will buy yen and sell AUD. The yen is used to buy the Honda. But the seller of the yen now owns AUD. If the AUD is not used for trade, then is simply finds its way into the banking system again (capital account). This has nothing to do with the bank. The bank has not funded the current account. In fact, it is probably correct to say the bank is an innocent bystander to the transactions undertaken by the customers.
2. Banks issuing Bonds to foreign investors / domestic bonds Foreign investors do not have access to AUD. But Banks (say NAB) will issue in foreign juristictions to meet man made requirements from APRA and regulators (term requirements etc). But it is nonsensical to suggests this funds Banks. Because the Bank raises USD from the Bonds, and swaps it back into AUD. AUD which already exists. the same for domestic bonds. The issue of the bonds is bought by investors who already have funds in Australian bank accounts. It is about swapping term. Again, the AUD already exists.
So it is a closed system. No AUD leaves our shores - no AUD comes in from offshore. It is about the composition of a Banks portfolio of liabilities.
Now here is the real killer.
If the loan creates the deposit, then rapid growth in the loan book actually assits the banks funding mix, and the requirement for offshore loans is diminished.
No - the whole point of the discussion was to show that this is a bullshit claim. You have helped prove that enourmously, as all your questions have been able to be answered, easily. You asked for even ONE example of an Aussie non-mining exporter on par with your mediocre list, and you have been given several. I notice you have gone quiet on that point, while still sticking to your original claim?
Anyway, there is FAR more to the Australian economy than just mining. 44% of exports in 2012 were of things other than mining, and 80%+ of the local economy was made of activities (production of goods and services) that were not mining related.
But even so, mining is good as we make a shitload of extra export derived cash out of it as well and it supports some locally owned/based companies that are the largest and most successful of their kind in the world - ie nothing to be ashamed of. Sure beats Nokia - a failed mobile phone company that completely missed the smart-phone revolution, and Volvo - a declining manufacturer of very boring cars that happens to have a large market of very boring people who like them.
Where are those answers? Mediocre list? I still have not been given any Australian examples outside of mining that can compare to any of the companies I listed from a much smaller country.
Volvo is not declining. In fact its growing.
The argument was never about if you should be ashamed of mining or not. The issue we are debating is if Australia is good at anything except digging stuff out of the ground and inflating house prices. I argue that no, they are not. In fact I cant think of anything at all except for wines but that is not a big export.
I feel like I'm banging my head against a brick wall then! I and others have posted numerous Australian non-mining exporters! Go back and read the responses again seeing as you seem to have missed.
I mean what the hell do you think the 44% of our exports that are NOT mining/minerals/energy etc are then if you continue with this ridiculous claim that Australia exports nothing but mining related stuff? Please answer that question? 44% of our exports are about $150B worth of something???
We are a basket case in a fools paradise and I believe that from this day onwards with reference to the utter stupidity of house prices in Sydney this year we are going to see the magnitude of the over leveraged herd and we will all be amazed at the actual numbers involved swimming naked!
Jeez shitty little inner city houses with no parking were highly priced since 2003 and last year at over 700k they were not worth the money and the Sydney dickheads have bid them up more!
You want to see how fucked we are?
OK, let’s set up in Sydney a world trade exhibition to show the world what we produce here. It couldn’t happen now because we would have nothing to show the world unless we do bus tours around our property hot spots and point out our million dollar shitbox houses then drive them out to the Nepean River and show them the people living in their cars.
Wake up you dumb Australian cocky arrogant inner city smug in love with your own importance as you strip yourselves bare so willingly in front of your banking masters!
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