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john_d_uk

British V German Economies

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I am becomming seriously worried about the state of the UK economy. Today it has really hit me with the release of German trade figures.

With the UK and Germany being similar size / type of countries, and Britain having had a period of supposed unprecedented growth, with Germany coming out of a supposed long term recession, the trade figures make startling reading. From BBC website:

Germany has just announced a trade surplus of 160.5bn euros (£110bn; $192bn) in 2005, compared with 156.1bn euros a year earlier. see:

http://news.bbc.co.uk/1/hi/business/4692638.stm

The UK in contrast has recently has a trade deficit of (From BBC website) see: http://news.bbc.co.uk/1/hi/business/4601442.stm

The trade gap in goods and services widened to £5.96bn ($10.45bn) from a deficit of £5.05bn in October, said the Office for National Statistics (ONS).

The November figure was more than £1bn higher than economists' forecasts.

The goods trade gap with non-EU countries also widened to £3.02bn in November from £2.28bn in October.

Economists had forecast a deficit of about £2.5bn.

I guess for the 2005 it will be around £50 Billion in total.

This is so absolutely terrifying for me that at the end of their recession, the German economy seems to be so much healthier that the UK's. Also add in the fact that so mucjh of the UK's 'turnover' is based on credit, surely it is only time until the whole pack of cards simply collapses?

I cannot see how our economy is viable AT ALL, let alone simply house prices being unsustainable.

Someone please try to explain, or I will start handing out leaflets explaining how to turn off the lights if you are the last person left in the UK.

:o

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I think it's something to do with making stuff versus taking in each other's washing.

:lol::lol::lol::lol:

Yes; I suppose it could be summarised as exactly that, ironically we may all be working for an outsourced (to Britain) Chinese laundry soon, if something drastic doesn't happen quickly.

All that washing will ruin my skin........

;)

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I am becomming seriously worried about the state of the UK economy. Today it has really hit me with the release of German trade figures.

With the UK and Germany being similar size / type of countries, and Britain having had a period of supposed unprecedented growth, with Germany coming out of a supposed long term recession, the trade figures make startling reading. From BBC website:

Germany has just announced a trade surplus of 160.5bn euros (£110bn; $192bn) in 2005, compared with 156.1bn euros a year earlier. see:

http://news.bbc.co.uk/1/hi/business/4692638.stm

The UK in contrast has recently has a trade deficit of (From BBC website) see: http://news.bbc.co.uk/1/hi/business/4601442.stm

The trade gap in goods and services widened to £5.96bn ($10.45bn) from a deficit of £5.05bn in October, said the Office for National Statistics (ONS).

The November figure was more than £1bn higher than economists' forecasts.

The goods trade gap with non-EU countries also widened to £3.02bn in November from £2.28bn in October.

Economists had forecast a deficit of about £2.5bn.

I guess for the 2005 it will be around £50 Billion in total.

This is so absolutely terrifying for me that at the end of their recession, the German economy seems to be so much healthier that the UK's. Also add in the fact that so mucjh of the UK's 'turnover' is based on credit, surely it is only time until the whole pack of cards simply collapses?

I cannot see how our economy is viable AT ALL, let alone simply house prices being unsustainable.

Someone please try to explain, or I will start handing out leaflets explaining how to turn off the lights if you are the last person left in the UK.

:o

Pah. they cant be rich. None of them even own their own house. How can a country where nobody owns their own house be rich?

Oh, sorry, wrong forum I thought this was the C4 homes forum.

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You are so right.

The perceived miracle UK economy is storing up immense problems under the facade created by NuLabour.

We're in denial. I am very, very, very worried.

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Trade surpluses of any relevance to anything.

So yesterday's economic theory darling.

I mean look over the pond.

That's the largest economy in the World and do such things bother them?

So why let this bother you?

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Trade surpluses of any relevance to anything.

So yesterday's economic theory darling.

I mean look over the pond.

That's the largest economy in the World and do such things bother them?

So why let this bother you?

Yes, you're right, this is a new paradigm. No need to earn money any more, we'll just print it and get richer and richer forever, amen :ph34r:

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Trade surpluses of any relevance to anything.

So yesterday's economic theory darling.

I mean look over the pond.

That's the largest economy in the World and do such things bother them?

So why let this bother you?

Greenspan gave everyone cheap cash after 9/11 to cheer 'em up. Not for any sound economic reason just to delay a recession whilst fighting a couple of wars.

Does nobody read my posts?

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The stregnth underpinning Germany is what is attracting investment.

I often ponder the precariousness of our own position. Something to bear in mind is the French economic story. I think Im right in saying theyve had a huge deficit for 30 years but have done ok. Odd really.

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Greenspan gave everyone cheap cash after 9/11 to cheer 'em up. Not for any sound economic reason just to delay a recession whilst fighting a couple of wars.

Does nobody read my posts?

And the UK can't even get its act together under these circumstances. We've just spent it on buying houses from each other and useless 4x4s to drive around cities rather than on entrenched economic growth.

The stregnth underpinning Germany is what is attracting investment.

I often ponder the precariousness of our own position. Something to bear in mind is the French economic story. I think Im right in saying theyve had a huge deficit for 30 years but have done ok. Odd really.

It's okay so long as you keep your currency strong :ph34r:

Edited by karhu

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It's okay so long as you keep your currency strong :ph34r:

successful drugpushers know not to cut their product too much. Debasing one's currency is no different.

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Germany is like the prospective FTB who lives with mum and dad, is extremely frugal, works overtime, is saving everything they can, and is waiting for houses to become affordable.

Britain is like the owner occupier with an average job but a period 3 bed house bought in 2003 with an IO mortgage and who has MEWed since then for a flash car.

Over the last few years Germany has been the butt of a lot of snide remarks from investors in Britain and other bubble countries about their supposed poor growth and economic problems. This is equivalent to the owner occupier making snide comments about the prospective FTB still living with mum and dad and riding a bike to work.

Germany has been pressured by some economists to "reform" and "liberalise" its economy along British and American lines. This is equivalent to the owner occupier encouraging the prospective FTB to "get on the ladder" and take out a huge debt for a poky 1 bed flat.

Basically, the Germans, like the FTBs, are being sensible, thinking for themselves and not being pressured by their peers.

frugalista

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A quick summary of the UK economy

Incomes:

- City of London, an international casino generating huge liquidity.

- North Sea Oil - taxed to death by Gordon & long past peak production

- HPI withdrawl

- errrr

Expenses:

- Public sector

- The UK outside of the south east

- 'value adding' professions with no exportable productivity (feng shui consultants, lawyers, the media, etc)

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Germany is like the prospective FTB who lives with mum and dad, is extremely frugal, works overtime, is saving everything they can, and is waiting for houses to become affordable.

Britain is like the owner occupier with an average job but a period 3 bed house bought in 2003 with an IO mortgage and who has MEWed since then for a flash car.

Over the last few years Germany has been the butt of a lot of snide remarks from investors in Britain and other bubble countries about their supposed poor growth and economic problems. This is equivalent to the owner occupier making snide comments about the prospective FTB still living with mum and dad and riding a bike to work.

Germany has been pressured by some economists to "reform" and "liberalise" its economy along British and American lines. This is equivalent to the owner occupier encouraging the prospective FTB to "get on the ladder" and take out a huge debt for a poky 1 bed flat.

Basically, the Germans, like the FTBs, are being sensible, thinking for themselves and not being pressured by their peers.

frugalista

no they are like the first time buyer who is using his savings to invest in businesses that will generate future income by selling things to other countries.

i hear stories from people with friends in germany who only 12-18 months ago thought our economy was fantastic because of its recent growth rate compared to theirs. Wonder what they are thinking now.

Edited by lowrentyieldmakessense(honest!)

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A quick summary of the UK economy

Incomes:

- City of London, an international casino generating huge liquidity.

- North Sea Oil - taxed to death by Gordon & long past peak production

- HPI withdrawl

- errrr

Expenses:

- Public sector

- The UK outside of the south east [Aberdeen more than pulls it's weight]

- 'value adding' professions with no exportable productivity (feng shui consultants, lawyers, the media, etc)

None exportable productivity is going to come under a spotlight during this recession, as in future such skills will suffer diminished wage inflation (their markets are minute).

If you are sensible enough to be looking for higher than typical wage inflation be sure as hell your skills cater to the entire global economy and not just UK planning applications or something just as pathetic and useless.

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no they are like the first time buyer who is using his savings to invest in businesses that will generate future income by selling things to other countries.

i hear stories from people with friends in germany who only 12-18 months ago thought our economy was fantastic because of its recent growth rate compared to theirs. Wonder what they are thinking now.

Short term loss, long term gain. Duh!!!

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i hear stories from people with friends in germany who only 12-18 months ago thought our economy was fantastic because of its recent growth rate compared to theirs. Wonder what they are thinking now.

That's the equivalent of believing VI spin!

frugalista

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Greenspan gave everyone cheap cash after 9/11 to cheer 'em up. Not for any sound economic reason just to delay a recession whilst fighting a couple of wars.

Does nobody read my posts?

Sorry, I sometimes make the assumption that my use of language can imply my sarcasm.

The use of the word "darling" was the clue here.

Yes, I do read your posts and find them reasoned and of merit.

:)

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Quite what these exports are going to be has never been specified

We're going to export chavettes to China to make up for the lack of women out there.

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Funny how 30 years ago this wouldn't even have been in the discussion. There was no comparison. There were only 2 miracle post-war boom economies. Those were, Japan and Germany. It was as if they were living in a paralell economic universe where the rules did not apply. Now funny thing, right up to the 80s neither of them had a Military Industrial Complex to call there own. Not because they didn't want to, they simply weren't allowed to have offensive capabilities.

Come the 80s, they got an MIC each, and they also somehow both got dragged into the same economic universe of ups and downs as everyone else. Economic evidence that has been completely ignored.

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A quick summary of the UK economy

Incomes:

- City of London, an international casino generating huge liquidity.

- North Sea Oil - taxed to death by Gordon & long past peak production

- HPI withdrawl

- errrr

Expenses:

- Public sector

- The UK outside of the south east

- 'value adding' professions with no exportable productivity (feng shui consultants, lawyers, the media, etc)

I couldn't have put it better. :)

Being German, I'm trying to be a bit contrarian here. As far as the German economy goes, this huge trade surplus does not really translate into new jobs which Germany desperately needs. Unemployment rate is about 11%, and the East is nowhere near catching up and rather falling further behind. Companies report record profits, shareholders are happy, yet a lot of these profits are based on rationalising (i.e. job losses).

I can see where you're all coming from yet I'm not as optimistic as you about the German economy. Having said that, I'm pretty convinced British economy is even deeper in the sh it.

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I couldn't have put it better. :)

Being German, I'm trying to be a bit contrarian here. As far as the German economy goes, this huge trade surplus does not really translate into new jobs which Germany desperately needs. Unemployment rate is about 11%, and the East is nowhere near catching up and rather falling further behind. Companies report record profits, shareholders are happy, yet a lot of these profits are based on rationalising (i.e. job losses).

I can see where you're all coming from yet I'm not as optimistic as you about the German economy. Having said that, I'm pretty convinced British economy is even deeper in the sh it.

As we write, a new report from The Economist is meant to come out. This report is much less complimentary on the German economy than the one which appeared last year.

According to this report, the main issues Germany is struggling with are:

1) Power struggles between state government and federal governments blocking necessary refom steps.

2) The education system: three-fold school system is too exclusive and a lot of potential is wasted.

3) The continued lack of jobs. Well, 11% it is.

4) Integration of immigrants / foreigners

5) Unsavioury relationships between local enterprises and local politicians.

I basically agree with 1) to 4). As for 5) I can't really comment. I'm a bit surprised that the article apparently does not comment on the former East.

Unfortunately, I can't find the article on the internet. There is, however, another article on it on the Spiegel (click here) website (in German only).

0,1020,576834,00.jpg

Edited to add image.

Edited by Plastic Elastic

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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