Thursday, September 9, 2010

Slow boil

Trade deficit rises to postwar record

What happens to a country after a 20% currency devaluation? When the existing contracts run out, you have to pay more for the same imports, but the exporters still get paid the same amount. This shows up as a huge sterling priced deficit. I think the argument that we imported more real goods all of a sudden during a downturn a bit pointless. Companies are in the business of selling whatever the specialise in, they had to pay more, and now it remains to be seen if they can sell on to the UK consumer... This IMO is an import price shock and I finally have an answer to why domestic prices didn't change after our glorious leaders dumped their own currency, basically because economic events like this go at the same speed as a UK house price adjustment (unless they go dramatically faster !!!).

Posted by stillthinking @ 09:42 PM (2402 views)
Please complete the required fields.

2 thoughts on “Slow boil

  • mark wadsworth says:

    This phenomenon is called the J Curve.

    Please complete the required fields.

  • 1. mark wadsworth said…’This phenomenon is called the J Curve.’

    That’s news to me. I was thinking more on the lines of a NWO Curve.

    A pre softening up, conditioning process.

    Please complete the required fields.

Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>