A supply shock occurs when consumer demand can't be met, it won't lead to price rises unless there is fear eg toilet paper, masks etc during COVID lockdowns or milk/bread when cyclones are imminent. Businesses are generally able to scramble resources to restore the market and meet demand - unless the economy has been trashed a la Venezuela or Zimbabwe. So while there may be short term surges in the prices of goods that are in demand, this incentivizes businesses to meet that demand and consequently the price rises are short lived. In the case of say China's surging demand for diesel fuel over the past 20 years, this led to a shortage in the Australian domestic market which drove the price of fuel up. It wasn't cause by the increase in the velocity of Yuan though, it was driven by individual buying preference in China. The demand comes first, not the speed by which money exchanges hands.
Negative rates for UK is likely medium to long term, even if EU moves back to positive rates. UK is effectively sabotaging their industry by willingly embracing trade friction
If negative rates are for a long term, then the EU economy is going to implode on long term. People will mass-sell their GBP for hard assets and other (cash) currencies (EUR, USD, CHF) and they will ignite massive currency devaluation (as a result of mass currency sales). Some are suggesting the UK might team up with the rest of the "British-American Empire" (+Canada, +Australia +New Zealand) to create an EU-like alliance. Otherwise, Brexit is probably hurting the UK economy more than anything else after WW II.
No country ever blew up becuase of negative rates though "British-American Empire" (+Canada, +Australia +New Zealand) this is very unlikely for a decade. Just based on time it takes to agree to a Multi-Lateral FTA.
Zimbabwe and Weimar Germany did "blow up" due to hyperinflation. And for hyperinflation you need loos of confidence in the currency (which is already inflated). This is exactly what negative interest rates would ignite: people would sell their money and invest it in anything, just to save their wealth. Negative interest rates are economic suicide.
You keep missing the point. Hopefully no one else here reads what you write and takes it as sound advice.
Which century are you referring to? This one or the last one Are you aware of the Five Eyes alliance? If the future delivers us into a total surveillance state then the Five Eyes alliance will be the ultimate power behind it all.
5 eyes is about spying on the other people citizen on behalf of other member governments Huawei could have that spying undone with 5G technology, that's why the banned
EUrmany is finished, Germany is too dependent on China on exports that the Chinese can soon produce themselves after another 5-10 years. What will Germany export after that? Cars, they are losing to Tesla and soon Apple Car. The sooner the UK leaves EUrmany, the better.
Germany has externalized much of their production facilities to V4 countries: https://en.wikipedia.org/wiki/Visegrád_Group Countless German investments are present in these countries, political ties are close. Perhaps it's Hungary and Poland are the main recipients of German investments. Many major German car brands are already being manufactured in Hungary: Mercedes, Audi, Opel, while BMW is building a new factory nearby. Interesting facts about the V4 Countries (Hungary, Poland, the Czech Rep. and Slovakia): - their combined PPP GDP is almost equal to Italy's or Turkey's GDP (2.2+ trillion USD, which makes V4 the 13th economic power, roughly equal to the Australia + the Netherlands combined) - their combined population is larger than Italy's and slightly smaller than France's - Germany has more economic activity with these countries than with France (previously France was Germany's top economic partner, now it is the V4/Visegrad Group) - throughout history, the V4 countries have has strong ties between each other (common kings, common alliances/personal unions etc. and they were the most developed "Communist Block" countries) - the core of Europe is essentially: Germany, Poland, Czech Rep., Slovakia, Hungary, Austria, Slovenia, Switzerland - Europe's core is an industrial powerhouse: https://en.wikipedia.org/wiki/Central_Europe And countless things could be said about this region, where Germany nests and determines the direction of all of these economies (perhaps Switzerland is somewhat neutral, but geographically still in the region).
Why Haven’t We Seen Hyperinflation? Just a video that I came across: - shows scenarios of hyperinflation in Weimar Germany, Hungary, Zimbabwe, Serbia, Venezuela - the video claims that 41+% of all US dollars were printed in the last 12 months - short comments by Peter Schiff: the US just decided to spend more, the government printed more money and spent it in the economy What's holding the USD and Euro? I think it's trust and the large international economic system which can't exist without these two currencies. We have the impression that there is no inflation, but the inflation is working its way through the economy. You can see the inflation in consumer prices. The US dollar, EUR seem to be sanding still. But if you look at the price of gold, silver, cryptos, but even real estate - then you will see that the USD, EUR have lower and lower purchase power.
Budget 2021: Government cuts import tax on gold, silver to 7.5% from 12.5% https://timesofindia.indiatimes.com...ver-to-7-5-from-12-5/articleshow/80628402.cms Huge news but no one talks about it? The biggest buyer of gold and silver jewellery.
The trouble right now isn't jobs but exports. There isn't anything that Germany can produce that China can't in a couple of years. In fact, in certain areas such as EV and autonomous driving, China already exceeds Germany. The only advantage that Germany has at the moment is branding, but as we have seen with Apple watch, hi-tech can usurp the branding of traditional companies quite easily.
Germany has many advantages, not just branding. GERMAN INDUSTY, GERMAN QUALITY 1) The German industry is far more developed and produces more reliable products than anything made in China. Think about the heavy industry... steel industry. China is evolving, but I think it will take many decades IF they can reach German quality. Not even the US matches German quality in many areas (see the arms industry, for example). France is far below Germany in all areas and so is the UK. Why would China be able to become "better", if the French never could surpass the Germans? NEARBY MARKETS 2) Germany can export to the entire Europe directly (being in the core of the continent), while Russia, Turkey and the Middle East are FAT nearby markets. China is far from its best markets (see Europe, North America). The EU's bad relations with Russia and Turkey are hitting Germany's economy more than any other European economy. INTERCONNECTED EUROPEAN MARKETS & KNOWLEDGE 3) Because Germany is in the EU, they have access to the "brains" of other European countries + there is an exchange between these markets (for example: Volkswagen owns the Czech Skoda and Spanish Seat - but basically, all of these cars are German, yet: all three countries contribute with resources, technology and markets) China is "on its own". And the US, Europe, Japan are doing a lot to isolate China from gaining access to more technology. But yes, I think it's a matter of time until China becomes the World's top economy and will dominate many industries. I see China beating the US in many areas, but even in the arms race there's a huge gap in terms of quality. But I doubt China would be able to deliver quality in the automotive or aerospace industries, for example - most European's couldn't name a single Chinese car manufacturer. And they're far from Mercedes, BMW, Audi in terms of quality. China is buying German cars, not the other way around. The EU and the USA are literally committing economic suicide through their social and political suicide. The EU is destroying its own members, the EU is ruining its own relations with Russia and Turkey (which are vitally important markets), the USA has gone "Kama-kama-kamala" (internal turmoil). From all of this: China is the big winner, overall
The German advantage is only branding. In terms of quality and price, I think Japan exceeds Germany, at least for industrial goods. Maybe for military industry as Japan doesn't really have much of one for now. Of course Germany will still be doing ok since they still have regional advantages as you mentioned, just that EU countries that depend on Germany will be in trouble. If the master can barely survive, how would the serfs fare?
Germany is externalizing much of its industrial operations (and therefore, exports known-how) to countries just slightly east of it: the Visegrad 4 countries. Which will become more prosperous and will have more intense economic flows between them and the rest of the world (e.g. the Middle East, Russia, Turkey, China, India...). Germany is committing economic-social-political suicide through illegal migration. Germany is in decay. It's not what it used to be in 1980. Sad. But true. While I agree with you that China is on a tremendous climb, I don't believe that branding is the only difference between Germany and China (we're talking about industrial products). Germany vs China: 1-0 for Germany due to quality Japan vs China: 1-0 for Japan due to quality USA: couldn't enter the race, because they can't even find China on the map, they lost their know-how almost entirely, they can't even make shoe-laces (but apparently they know how to make Tomahawk missiles and F-35's). Proof of German quality vs Chinese: the German ball bearing rotates smoother for longer time My personal experiences are similar. Although, not with bearings.
I remembered telling my wife to speak english in HK as they don't like to hear mandarin. Never imagined the same to happen in the local context. Even my PRC neighbour is encouraging her 5 year son to speak english instead. Only just a year ago, he was speaking her mother's mandarin which was a foreigner giveaway. Within a year, she managed to get that fixed. Just to show how well they have managed the fallout.
