trompe le monde Posted March 12, 2006 Share Posted March 12, 2006 http://news.independent.co.uk/business/ana...ticle350691.ece Looks to be an interesting week of figures from the ONS: Monday: "....On Monday, the ONS may also shed some light on inflation as producer price data is released. In recent months, manufacturers have mostly absorbed rising costs due to higher commodity prices, but they could begin to pass their costs down the supply chain, which may drive up retail prices...." Wednesday: "....After January's unsettling numbers, investor attention will be focused mainly on Wednesday's unemployment data. "Everyone is going to want to see if [the increase in the jobless total] was an aberration or if it will be sustained," said John Butler, an economist at HSBC...." Thursday: "....That will be followed on Thursday by retail sales numbers, which are widely expected to show that last year's late surge was short-lived...." Quote Link to comment Share on other sites More sharing options...
Marina Posted March 12, 2006 Share Posted March 12, 2006 (edited) My wife bought a sandwich toaster today from Tesco's. Made in China for Tesco's. It was £5.95 - and it does two sandwiches at once. There is something very, very weird going on. There has always been a disparity between nations - goods produced more cheaply in one country so the other country imports them rather than making the goods themselves. But this is just nuts. A punnet of blueberries - £1.99. A sandwich toaster = 3 punnets of blueberries. The thing has to be designed. Machine tools made. Raw materials obtained. Metal bashed, drilled, punched and tapped. Factory paid for. Staff paid something. Wiring, cables, heater element, plug, box, instructions in English shipping from factory to port, seafreight to UK, customs, duty, storage, transport, warehousing etc etc etc and, of course, Tesco's mark up. All that for what someone in the UK on an average wage gets paid for ... what 20 minutes work? And, for someone on bigger bucks, it might represent 5 minutes of their work. Why clean the damn thing? You might as well just buy a new one every week. And still we have to borrow money to keep afloat. I can't see how this can carry on forever. Either we will have to earn less - or our currency will have to move - or we will have to pay more for imported goods when the suppliers are no longer satisfied with us living the life of riley from their toil. Whichever way you look at it, we are going to have to pay more to borrow money. Edited March 12, 2006 by Marina Quote Link to comment Share on other sites More sharing options...
quangolicious Posted March 12, 2006 Share Posted March 12, 2006 Whichever way you look at it, we are going to have to pay more to borrow money. Or all start growing blueberries? Quote Link to comment Share on other sites More sharing options...
trompe le monde Posted March 13, 2006 Author Share Posted March 13, 2006 My wife bought a sandwich toaster today from Tesco's. Made in China for Tesco's. It was £5.95 - and it does two sandwiches at once. There is something very, very weird going on. There has always been a disparity between nations - goods produced more cheaply in one country so the other country imports them rather than making the goods themselves. But this is just nuts. A punnet of blueberries - £1.99. A sandwich toaster = 3 punnets of blueberries. The thing has to be designed. Machine tools made. Raw materials obtained. Metal bashed, drilled, punched and tapped. Factory paid for. Staff paid something. Wiring, cables, heater element, plug, box, instructions in English shipping from factory to port, seafreight to UK, customs, duty, storage, transport, warehousing etc etc etc and, of course, Tesco's mark up. All that for what someone in the UK on an average wage gets paid for ... what 20 minutes work? And, for someone on bigger bucks, it might represent 5 minutes of their work. Why clean the damn thing? You might as well just buy a new one every week. And still we have to borrow money to keep afloat. I can't see how this can carry on forever. Either we will have to earn less - or our currency will have to move - or we will have to pay more for imported goods when the suppliers are no longer satisfied with us living the life of riley from their toil. Whichever way you look at it, we are going to have to pay more to borrow money. I guess economy of scale, cheap labour and a strong (for how long!) UK currency is the prosaic answer, but it still beggars belief. It's the same in Makro, you can pick up an electric hand drill, sander, or angle grinder, all at around £5 each - all made in China. Imagine if they start making decent cars. Also good old supply and demand, if you can't get hold of blueberries during the winter, and enough people want them (what the hell do you use blueberries for, anyway? I've only ever seen them in muffins..), the price rockets. I can remember as a kid having cod on a regular basis, as it was always cheap. For a treat we might have tinned salmon sandwiches once or twice a month. Nowadays overfished stocks mean cod's more expensive than a farmed salmon steak. In fact you'd need two sandwich toasters for a kilo of cod fillet TLM Quote Link to comment Share on other sites More sharing options...
Michael Posted March 13, 2006 Share Posted March 13, 2006 My wife bought a sandwich toaster today from Tesco's. Made in China for Tesco's. It was £5.95 - and it does two sandwiches at once. There is something very, very weird going on. There has always been a disparity between nations - goods produced more cheaply in one country so the other country imports them rather than making the goods themselves. But this is just nuts. A punnet of blueberries - £1.99. A sandwich toaster = 3 punnets of blueberries. The thing has to be designed. Machine tools made. Raw materials obtained. Metal bashed, drilled, punched and tapped. Factory paid for. Staff paid something. Wiring, cables, heater element, plug, box, instructions in English shipping from factory to port, seafreight to UK, customs, duty, storage, transport, warehousing etc etc etc and, of course, Tesco's mark up. All that for what someone in the UK on an average wage gets paid for ... what 20 minutes work? And, for someone on bigger bucks, it might represent 5 minutes of their work. Why clean the damn thing? You might as well just buy a new one every week. And still we have to borrow money to keep afloat. I can't see how this can carry on forever. Either we will have to earn less - or our currency will have to move - or we will have to pay more for imported goods when the suppliers are no longer satisfied with us living the life of riley from their toil. Whichever way you look at it, we are going to have to pay more to borrow money. like my electric kettle analogy......A haircut is now twice the price of an electric kettle .... Quote Link to comment Share on other sites More sharing options...
Rave Posted March 13, 2006 Share Posted March 13, 2006 It's all silly- today my wife suggested that we get a new cordless kettle for a fiver because our two year old one was looking 'a bit scabby'. I had to explain that that would be a dire waste of the earth's resources . Quote Link to comment Share on other sites More sharing options...
RichM Posted March 13, 2006 Share Posted March 13, 2006 like my electric kettle analogy......A haircut is now twice the price of an electric kettle .... You need to go to Alfred's on Coldharbour Lane, Camberwell; one haircut = one sandwich toaster... Quote Link to comment Share on other sites More sharing options...
jpidding Posted March 13, 2006 Share Posted March 13, 2006 You need to go to Alfred's on Coldharbour Lane, Camberwell; one haircut = one sandwich toaster... This weekend I bought a cheap kettle in Germany for €4....£2.74....how can this be maintained....answer....it cant. This is SOOOOHHHHHOOOOOOOOW reliant on cheap oil its a joke. Give it 3-5 years and todays prices will be unthinkable. All financial investments should now be heavily weighted towards taking peak oil into account. Be warned! Quote Link to comment Share on other sites More sharing options...
737 Posted March 13, 2006 Share Posted March 13, 2006 This weekend I bought a cheap kettle in Germany for €4....£2.74....how can this be maintained....answer....it cant. This is SOOOOHHHHHOOOOOOOOW reliant on cheap oil its a joke. Give it 3-5 years and todays prices will be unthinkable. All financial investments should now be heavily weighted towards taking peak oil into account. Be warned! "This weekend I bought a cheap kettle in Germany for €4....£2.74....how can this be maintained" China's currency is heavily undervalued and business there also appear to have no health, saftey, pension, anti pollution or many other infrastructure costs - why we in the West don't have some form of trade barrier is beyond me! Quote Link to comment Share on other sites More sharing options...
AteMoose Posted March 13, 2006 Share Posted March 13, 2006 soon a dvd will cost more than a dvd player.... weird times Quote Link to comment Share on other sites More sharing options...
non-FTBer Posted March 13, 2006 Share Posted March 13, 2006 soon a dvd will cost more than a dvd player.... weird times A bit like buying Epson ink for an Epson inkjet printer. One set of ink cartridges costs almost as much as a new printer with a set of inks. Quote Link to comment Share on other sites More sharing options...
Marina Posted March 13, 2006 Share Posted March 13, 2006 "This weekend I bought a cheap kettle in Germany for €4....£2.74....how can this be maintained" China's currency is heavily undervalued and business there also appear to have no health, saftey, pension, anti pollution or many other infrastructure costs - why we in the West don't have some form of trade barrier is beyond me! Because if we had trade barriers and goods from China were more expensive, the Government would not be able to kid everyone that all is well because we would have inflation heading for double digits - and interest rates to match. Anything we source from this country - be it public services or other services is ludicrously expensive. An hour's labour for a spanner monkey at your local garage - anything from £45 an hour upwards. The costs of living and doing business here - council tax, income tax, utility bills, petrol, car servicing, building work, housing etc etc have been going up inexorably for years. But the inflation figures are offset by reductions in the costs of imported goods. How long before we get a car rotation servicing scheme? Take your car to the local service handling centre. They lend you one while yours is being serviced. They ship it to China - service it for £2 and bring it back. What happens when the Chinese do start regulating and raise their prices? Quote Link to comment Share on other sites More sharing options...
pharm Posted March 13, 2006 Share Posted March 13, 2006 My wife bought a sandwich toaster today from Tesco's. Made in China for Tesco's. It was £5.95 - and it does two sandwiches at once. There is something very, very weird going on. There has always been a disparity between nations - goods produced more cheaply in one country so the other country imports them rather than making the goods themselves. But this is just nuts. A punnet of blueberries - £1.99. A sandwich toaster = 3 punnets of blueberries. The thing has to be designed. Machine tools made. Raw materials obtained. Metal bashed, drilled, punched and tapped. Factory paid for. Staff paid something. Wiring, cables, heater element, plug, box, instructions in English shipping from factory to port, seafreight to UK, customs, duty, storage, transport, warehousing etc etc etc and, of course, Tesco's mark up. All that for what someone in the UK on an average wage gets paid for ... what 20 minutes work? And, for someone on bigger bucks, it might represent 5 minutes of their work. Why clean the damn thing? You might as well just buy a new one every week. And still we have to borrow money to keep afloat. I can't see how this can carry on forever. Either we will have to earn less - or our currency will have to move - or we will have to pay more for imported goods when the suppliers are no longer satisfied with us living the life of riley from their toil. Whichever way you look at it, we are going to have to pay more to borrow money. These days, labour costs are everything. Picking blueberries is labour intensive -- you can't do it by machine, so when you buy a punnet of blueberries in the supermarket, a big chunk of that is the cash to pay the picker. Plus they're a pain to transport without damage. On the other hand, once you've made your sandwich toaster making machine, all you need is someone to keep half an eye on the production line whilst it stamps 100s of the things out in an hour. International shipping for bulk goods costs very little these days -- it probably costs more to get the goods to the port than to ship them from there to the EU. Quote Link to comment Share on other sites More sharing options...
Marina Posted March 13, 2006 Share Posted March 13, 2006 A bit like buying Epson ink for an Epson inkjet printer. One set of ink cartridges costs almost as much as a new printer with a set of inks. I went into PC World a while ago as my printer had baled out - in a hurry had to get something printed off quickly. Stacked floor to ceiling - some new Hewlett Packard businessy model - high spec - £50. A few weeks later needed a new black cartridge - back to PC World - £28!!!!! - and the copy boys don't do them because they were too new. Full set of cartridges over £80!!!! I am ashamed to say (from the ecological point of view) I took my 3 week old HP printer to the dump and bought a Canon with cartridges that cost £2.95 to replace. Quote Link to comment Share on other sites More sharing options...
rockdoctor Posted March 13, 2006 Share Posted March 13, 2006 My lightbulb moment was when I saw Robert Dyas selling packs of three pairs of pliers for a fiver. No normal household needs more than one pair of pliers, so clearly the Chinese have so many of the things to shift that they have to almost give them away in threes. The pliers factory must be running white hot, but the GLOBAL market for pliers must be pretty near saturated by now. I can see this starting to hit China more and more - just as they complete the largest and cheapest factory for a widget, the bottom drops out of the market - they can't drop the price below zero and everyone has as many widgets as they want. There may be trouble ahead for the Chinese. Quote Link to comment Share on other sites More sharing options...
Zaranna Posted March 13, 2006 Share Posted March 13, 2006 You need to go to Alfred's on Coldharbour Lane, Camberwell; one haircut = one sandwich toaster... I wish I had your haircut - I could buy 6 toasters for the price of mine!! Quote Link to comment Share on other sites More sharing options...
needle Posted March 13, 2006 Share Posted March 13, 2006 There may be trouble ahead for the Chinese. Yeah but their non-existent banking system and imaginary currency will fold first. Quote Link to comment Share on other sites More sharing options...
EmpiricalBear Posted March 13, 2006 Share Posted March 13, 2006 I can see this starting to hit China more and more - just as they complete the largest and cheapest factory for a widget, the bottom drops out of the market - they can't drop the price below zero and everyone has as many widgets as they want. There may be trouble ahead for the Chinese. and the rest of us. Excess global capacity, high debt fuelling the last burst. Asset price bubble. We are getting close to a rerun of 1929. Deflation is coming. Our current little burst of inflation is just the prolog ue and the main act is nearly upon us. Quote Link to comment Share on other sites More sharing options...
Guest Posted March 13, 2006 Share Posted March 13, 2006 (edited) like my electric kettle analogy......A haircut is now twice the price of an electric kettle .... So it's basically a case of stock up on your tat NOW. As for the hair... http://www.amazon.co.uk/exec/obidos/ASIN/B...9032048-4963128 You couldn't make it up. This is LESS than the £9 my barber charges now. I got one of these, (similar model) and decided to go for the "scaring grannies" look, instead of the "middle class mummy's boy" look. Funny thing was my grandmother really liked it! PS. Boddies = £1.90/pint up from £1.83 on thursday. Crikey. Edited March 13, 2006 by megaflop Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted March 13, 2006 Share Posted March 13, 2006 I went into PC World a while ago as my printer had baled out - in a hurry had to get something printed off quickly. Stacked floor to ceiling - some new Hewlett Packard businessy model - high spec - £50. A few weeks later needed a new black cartridge - back to PC World - £28!!!!! - and the copy boys don't do them because they were too new. Full set of cartridges over £80!!!! I am ashamed to say (from the ecological point of view) I took my 3 week old HP printer to the dump and bought a Canon with cartridges that cost £2.95 to replace. I need to know more Quote Link to comment Share on other sites More sharing options...
SarahBell Posted March 13, 2006 Share Posted March 13, 2006 These days, labour costs are everything. Picking blueberries is labour intensive -- you can't do it by machine, so when you buy a punnet of blueberries in the supermarket, a big chunk of that is the cash to pay the picker. Plus they're a pain to transport without damage. They'll be picked by cheap labour who see no extra cash whether you pay £1 a punnnet or £2 There was a prog on about fair trade goods which the supermarkets charge the earth for but pass very little of the extra cash on to the suppliers - they just make a bigger profit on them. Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted March 13, 2006 Share Posted March 13, 2006 Anything we source from this country - be it public services or other services is ludicrously expensive. An hour's labour for a spanner monkey at your local garage - anything from £45 an hour upwards. The costs of living and doing business here - council tax, income tax, utility bills, petrol, car servicing, building work, housing etc etc have been going up inexorably for years. But the inflation figures are offset by reductions in the costs of imported goods. Yes, but unfortunately it's really the other way round. Because we have a (positive) targeted inflation rate, we *need* service inflation to be high to offset the falling low cost tangibles from Asia. We *need* solicitors to charge £200 per hour and keep racking up their fees each year to maintain a positive CPI number. This is the perversity of having a targeted CPI rate at a time of falling manufacturing prices. Even Mervyn King has commented on this. The same mistake was made in the 1920's. The US Federal Reserve was operating a targeted inflation rate and was patting itself on the back for achieving it - seemingly oblivious to the fact that due to the huge productivity gains from mass production, prices should have been naturally falling. They unwittingly forced asset inflation into the system (just as we have now) and created a credit bubble that inevitably burst. Of course the argument is that deflation is a dangerous beast - people delay buying things because they know that they will be able to buy them cheaper next year. Hence demand in the economy falls and a slump is created. I'm not convinced. Would your wife have delayed buying the sandwich toaster if she knew she could get it for £5.75 a year later? Hmm. Stalling real incomes wouldn't matter if we could all buy more for our buck. Unfortunately it's not working this way. Certain sectors of society are gaining at the expensive of the rest. Quote Link to comment Share on other sites More sharing options...
aris Posted March 13, 2006 Share Posted March 13, 2006 I went into PC World a while ago as my printer had baled out - in a hurry had to get something printed off quickly. Stacked floor to ceiling - some new Hewlett Packard businessy model - high spec - £50. A few weeks later needed a new black cartridge - back to PC World - £28!!!!! - and the copy boys don't do them because they were too new. Full set of cartridges over £80!!!! I am ashamed to say (from the ecological point of view) I took my 3 week old HP printer to the dump and bought a Canon with cartridges that cost £2.95 to replace. You can get Canon cartridges for a quid at poundland. They work fine. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.