The value of money has dropped by two thirds in 30 years

[Ocean1]

No i haven't, but i do know it is a reasonable indication of prosperity. Macca's can't afford to get it wrong.LOL

If Macca's are continually tweaking their prices so that they're always getting the same optimal return then their prices are always going to follow the average income variations, yes? So not a good baseline against which to compare historic income. I think the Big Mac index is used more as a tongue-in -cheek comparison between economies rather than different periods within a single economy.

So:



I understand Macca's business model is based around real estate, levering the revenue lead from each outlet start-up to finance the next. Not sure I believe that, but it's an interesting concept...

[husaberg]

If Macca's are continually tweaking their prices so that they're always getting the same optimal return then their prices are always going to follow the average income variations, yes? So not a good baseline against which to compare historic income. I think the Big Mac index is used more as a tongue-in -cheek comparison between economies rather than different periods within a single economy.

I believe Macca price is based on what the market can afford to pay hence why it is dearer in the more Prosperous countries. Coke and Levi's would be the same.
I think it would be a valid way of comparing change in buying power within a country across years.

Although it would now seem with Coke Levi's and Macca's achieving good market penetration within China.
Communism will now fall within 15 years. That's how you push Democracy and free markets Make them want Brands

[mashman]

Aren’t positive for what? Income maybe but do family trusts record the price of groceries?
Seems likely the official govt conservator would have the numbers, I just don’t know where his shit is.

Positive as in the cost of living is cheaper today than back in the day... on the basis that that isn't constantly being sung from the heavens I'd happily write off that being the case. Dunno about family trusts, never looked into them. Tin foil hat says you can't get that info without a very very good reason and you'll likely have to sign some form of non-disclosure with your life being forfeit should you make the grade.

Infinite? Fuck off, the value of the economy is the total of what the various markets will pay for the product of our economy. That’s it. It’s value increases if and when additional product of some value is added, and only then. If GDP increases year by year then the economy grows in value, if external markets decide they don’t want a bunch of our product then it shrinks. Exactly the same as any other business.

The value of a dollar is essentially the value of the economy divided by the total number of dollars in circulation. If the govt prints more money and circulates it then the value of each dollar is diminished accordingly. And they do print more, supposedly to match growth in the economy, but also to match anticipated growth. The second sort isn’t in circulation, as such, it’s tied up in your mortgage.

As for the disparity between product value and price, it’s common enough, and becoming more common, it’s caused by arseholes circumventing a free market, and yes tptb are as guilty of that as some big businesses. Such distortions have nothing to do with prices rising to “allow the pumping of money into the economy”. The solution is really simple, require the commerce commission to do it’s fucking job and remove the barriers to free trade.

Of course it's infinite. Money is plucked out of thin air. Money = economy. The value being generated is financial, not the product itself as the prices for some products fluctuate innit. So GDP is expressed in financial terms and growth is merely a comparison of the amount of money "earned" over a given period. There's nothing magical about that calculation. For an idea of how infinite it is

The Japanese seem to do that alot, heh, for some reason. Of course the second sort is in circulation. I get a mortgage to pay the builder to build my house, he then spends it in the economy etc... You been drinkin today?

Pah... free market my arse. As husababy started to highlight earlier, why is product a $50 here and $1 in other countrys? The commerce commission do its job? What have you been drinking? they do as they're told, no more, no less.

Yeah? Then why are later models of pretty much everything priced lower than their predecessors? And I didn’t deny that the value of product changes, it’s synonymous with a free market. As you said, supply and demand should dictate price. What I said is that suddenly changing the value of the dollar doesn’t alter the intrinsic value of a product. The only time you’ll ever find that the final price of a product isn’t dictated by the it’s value is when the market’s being distorted.

Example: my audiologist wants to sell me hearing aids for $5k, yet the cost of manufacture is about $30. Why can’t I simply go and buy a $30 set? Because he has to tune them to suit me, and the way he chooses to cover his costs is to massively overprice the product. What should happen? I should be able to buy that $30 hearing aid, perhaps from him, and he should then charge me for his services honestly. The overall cost might well end up the same, but with the costs itemised properly I can see what I’m paying for. If don’t like it I can go somewhere else.

The value of the product should always dictate the price.

Lets talk about the value I’m getting from my tax dollars, eh?

Are they cheaper? They seem to be pretty much the same price given the new tech that comes online... and I would imagine the setup costs/factory upgrade costs are a large reason for that. That and the competition catching up.

I agree that the value of the product should indicate price, but those days are long gone and I highly doubt that they'll return. Hence we may as well accept that we're just beings on a spinning rock and owe no money to anyone other than our species... and that we should make the best of the situation instead of making up contrived overly complicated systems of human governance. It's counter-productive and a complete waste of time and energy. It ain't gonna go back to the way it was... praps we're going to end up in a nuclear war and "my" system will come about by default, although I'd rather we bypassed the war and went straight to the cooperation part.

We're all subsidising someone else, be it locally or internationally. Yet another insane waste of time and energy where if we did what needed to be done instead of what we could afford, then we'd get everything done without holding a grudge over what your effort is being used for. Also your tax $ isn't enough coz the free market economy has failed and isn't free at all. You're gonna have to pay more please, as am I.

[Ocean1]

Of course it's infinite. Money is plucked out of thin air. Money = economy. The value being generated is financial, not the product itself

If you genuinely believe that then Oscar's right, there's no hope of any rational discussion.

[Ocean1]

I believe Macca price is based on what the market can afford to pay hence why it is dearer in the more Prosperous countries. Coke and Levi's would be the same.
I think it would be a valid way of comparing change in buying power within a country across years.

But if those prices are set to "what the market can afford" then they're always going to be similarly related to average income aren't they? So if "what they can afford" in 1980 is, say 2% of an average wage and in 2010 it's still 2% of the average wage then there's no change, is there? How can that form a measure of changes in buying power?

Although it would now seem with Coke Levi's and Macca's achieving good market penetration within China.
Communism will now fall within 15 years. That's how you push Democracy and free markets Make them want Brands

I've traveled through China. If communism is to fail there it might be because that particular flavour has a habit of lying to it's people.

And this:

[mashman]

If you genuinely believe that then Oscar's right, there's no hope of any rational discussion.

Pah. Given that economists agree that money is plucked out of thin air and given that you claim that the economy won't work without money, I find that your statement not only goes against your beliefs and that you're either denying a universal truth or are still equating how money works today to how money worked 30/40 years ago. In regards to rational discussion, you have to be able to understand both sides of the argument before you can have a rational discussion. I understand your argument, the same can't be said for you pseudo-rational folk as you have 1 way or none at all. Hardly rational.

[husaberg]

But if those prices are set to "what the market can afford" then they're always going to be similarly related to average income aren't they? So if "what they can afford" in 1980 is, say 2% of an average wage and in 2010 it's still 2% of the average wage then there's no change, is there? How can that form a measure of changes in buying power?

I had considered that, but still interesting to tie it too the minimum wage. as not everyone can afford Maccas (make em want it)
here is something i did to compare the prize money for a motorbike race series back in the UK in the late 70's.
Well prize money definitely does not go as far

With 9000 pound's prize money that would buy over 10 cb400f's back then or a three bedroom house.

I've traveled through China. If communism is to fail there it might be because that particular flavour has a habit of lying to it's people.

And this:

Too true Rupert has even exited NZ as he has reached total economic saturation.
People don't seem to mind being lied to (It just when it is just when they become aware of it that it causes issues) Aye John Key .......... John..... John....er sorry he would have answered but he either didn't recall, or was overseas at the time.

[Brian d marge]

If you want some reading , this is a rough guide to what happened ( from my bookmarks and yes if you want me to summarise it I can )

please read from top to bottom. notice game theory at work , and it is still being used in our hospitals and government departments today!

http://en.wikipedia.org/wiki/Economics

http://en.wikipedia.org/wiki/Economy_of_Nazi_Germany

http://en.wikipedia.org/wiki/Autarky

http://en.wikipedia.org/wiki/Beggar_thy_neighbor

http://en.wikipedia.org/wiki/Race_to_the_bottom ( game theory )

http://en.wikipedia.org/wiki/Isolationism

http://en.wikipedia.org/wiki/Bretton_Woods_system

http://en.wikipedia.org/wiki/Nixon_Shock

http://en.wikipedia.org/wiki/1973%E2...k_market_crash

http://en.wikipedia.org/wiki/1973_oil_crisis

http://en.wikipedia.org/wiki/Stagflation

Yes, the unions weren’t helping but in Britain’s class ridden structure they were probably the only chance ALSO , if you disenfranchise people through what ever means , you will get an " OH FK IT attitude " as seen here in NZ and that exactly what you got ... born and bred in the east end I am .

Britain , I think, needed money and opening up the financial markets was a quick and dirty method but that has only helped a few ;

http://www.wsws.org/en/articles/2001/05/uk-m17.html

I know its a commie web site but its close enough to show the point

Finally

Big mac index is used to compare price parity between american dollar and your local currency and shows if the currency is under or over valued


Stephen

[mashman]

If you want some reading , this is a rough guide to what happened ( from my bookmarks and yes if you want me to summarise it I can )

please read from top to bottom. notice game theory at work , and it is still being used in our hospitals and government departments today!

http://en.wikipedia.org/wiki/Economics

http://en.wikipedia.org/wiki/Economy_of_Nazi_Germany

http://en.wikipedia.org/wiki/Autarky

http://en.wikipedia.org/wiki/Beggar_thy_neighbor

http://en.wikipedia.org/wiki/Race_to_the_bottom ( game theory )

http://en.wikipedia.org/wiki/Isolationism

http://en.wikipedia.org/wiki/Bretton_Woods_system

http://en.wikipedia.org/wiki/Nixon_Shock

http://en.wikipedia.org/wiki/1973%E2...k_market_crash

http://en.wikipedia.org/wiki/1973_oil_crisis

http://en.wikipedia.org/wiki/Stagflation

Yes, the unions weren’t helping but in Britain’s class ridden structure they were probably the only chance ALSO , if you disenfranchise people through what ever means , you will get an " OH FK IT attitude " as seen here in NZ and that exactly what you got ... born and bred in the east end I am .

Britain , I think, needed money and opening up the financial markets was a quick and dirty method but that has only helped a few ;

http://www.wsws.org/en/articles/2001/05/uk-m17.html

I know its a commie web site but its close enough to show the point

Finally

Big mac index is used to compare price parity between american dollar and your local currency and shows if the currency is under or over valued


Stephen

Very interesting read... I was almost rooting for Hitler when reading about Nazi Germany and Autarky.

[Brian d marge]

Very interesting read... I was almost rooting for Hitler when reading about Nazi Germany and Autarky.

wasnt it .
just need to find the relationship from and to the labour government ( and NZ relationship to the above, info not hitler )

I have pieced together a few bits , such as when the dollar was pegged and ..hang on I wrote it on a bit of paper ,,,,,scurries of find his old blog ...

found it !!

anyway NZ during the 70 and 80s ........

8 March 1983 The New Zealand Dollar was devalued by 6% against its weighted basket of currencies.
The middle rate in terms of the U.S. Dollar was consequently changed to US$0.655=$NZ1,
representing a depreciation of 8.3% from the middle rate of the previous day.
8 August 1983 The Reserve Bank practice of fixing daily exchange rates for the New Zealand Dollar
against the U.S. Dollar was abandoned, allowing the unit to follow international currency movements.
1984 At the end of 1984, almost all foreign exchange controls were in the process of removal.
31 December 1984 The buying and selling rates for the U.S. Dollar were US$0.4723 and US$0.4823,
respectively, per $NZ1.
4 March 1985 The practice of establishing a fixed exchange rate with respect to a trade-weighted
basket of currencies was terminated.
The exchange rate for the New Zealand Dollar was to be determined on the basis of supply and demand
in the foreign exchange market.
The Reserve Bank ceased to quote official buying and selling rates for the New Zealand Dollar, but
would enter the market in periods of disturbed conditions.
31 December 1985The buying and selling rates for the U.S. Dollar were US$0.499 and US$0.5,
respectively, per $NZ1.
1986 The $NZ25 tax on foreign travel tickets was abolished.
The Effective Rate was eliminated and replaced by the Interbank Rate which was to be determined by
supply and demand conditions in the exchange market. The Reserve Bank retained discretionary power
to intervene in the market.
31 December 1986 The buying and selling rates for the U.S. Dollar were US$0.5250 and
US$0.5240, respectively, per $NZ1.
31 December 1987 The buying and selling rates for the U.S. Dollar were US$0.6595 and
US$0.6585, respectively, per $NZ1.
1989 During 1989, a number of exchange control regulations were abolished.
So to review
In 1971, the Effective Rate was created and
the currency's link to Pound Sterling was replaced with a pegging to the U.S. Dollar. In 1973, the New
Zealand Dollar was placed on a controlled, floating basis. Exchange rate is computed from the value of
the New Zealand Dollar, which is determined on the basis of the fixed relationship between the New
Zealand Dollar and a basket of currencies representing New Zealand's main trading partners. The
weights of the currencies included in the basket are established in accordance with their proportionate
share of New Zealand's total current overseas receipts and payments; the weights are adjusted
quarterly. From 1979, a crawling-peg system of monthly depreciation adopted.
In March 1985, the New Zealand dollar was floated as part of a broad-based deregulation of financial
markets. The rate was determined by the supply and demand in foreign exchange market. The Reserve
Bank has not intervened in the foreign exchange market since the float. In mid-October 1993, the New
Zealand dollar was worth less on a trade-weighted basis than at the time of the float. In early
November, the New Zealand Dollar was trading at 65 U.S. cents (buying rate: US$0.6515 and selling
rate: US$0.6520), having appreciated 6% against the U.S. Dollar in the previous 12 months.
This brings us to the mid eighties ,during the 1970s and early 1980s, New Zealand was faced with a

series of economic problems brought on by changes in the global economy, many of which directly
affected the country, such as Britain’s entry in to the European Economic Community in 1973. New
Zealand was rating badly for living standards and economic performance compared to OECD averages:
in 1980 it had slipped from being in the top five OECD countries to 19th Roger Douglas, who would
later become finance minister, went so far as to say that the country stood “on the brink of economic
ruin”.
Prior to 1985 the New Zealand Dollar was controlled centrally by the Reserve Bank of New
Zealand at a fixed exchange rate to the United States Dollar. In early 1984 the Deputy Governor of the
Reserve Bank, Roderick Deane, became concerned that the dollar had become significantly overvalued
and was vulnerable to currency speculation on the financial markets in the event of a "significant
political event"
Media speculation followed a leak that an incoming Labour government would be likely to
significantly devalue the dollar upon election. The Reserve Bank advised the Prime Minister, Sir
Robert Muldoon, that the dollar should be devalued. Muldoon ignored the advice, owing to his belief
that it would hurt poorer New Zealanders in the medium term. In June 1984 Muldoon announced a
snap election to be held in July. This caused an immediate run on the dollar, as currency speculators
believed a Labour win would mean devaluation. Despite a deepening foreign exchange crisis, Muldoon
continued to refuse to devalue, forcing the Reserve Bank to take some extraordinary steps, such as the
temporary closing the forex markets for a short period of time to slow down devaluation.
On 14 July, Muldoon and National lost the general election, and the Fourth Labour government was
sworn in on 26 July.
By constitutional convention, between election day and the return of the writs for the election, an
outgoing caretaker government defers to the wishes of an incoming government. On Sunday 17 July,
following a meeting between Reserve Bank officials (Reserve Bank Governor Spencer Russell, deputy
Roderick Deane, and Treasury Secretary Bernie Galvin) and the incoming government at Auckland
International Airport, the incoming government requested that the dollar be devalued.
The outgoing Prime Minister Sir Robert Muldoon refused. The foreign exchange market was closed the
following day. In an impromptu television interview with Richard Harman that evening, Muldoon
stated he had been asked to devalue the currency by the incoming government but was not going to.
Prime Minister elect David Lange responded with an interview of his own. He stated: "This nation is at
risk. That is how basic it is. This Prime Minister outgoing, beaten, has, in the course of one television
interview tried to do more damage to the New Zealand economy than any statement ever made. He has
actually alerted the world to a crisis. And like King Canute he stands there and says everyone is wrong
but me".
This provoked a further crisis in the foreign exchange markets - when the exchange was finally opened
on 19 July, millions of foreign exchange dollars left the country as currency speculators expected a
devaluation of the New Zealand dollar.

Lange later remarked "We actually were reduced to asking our
diplomatic posts abroad how much money they could draw down on their credit cards! That is the
extent of the calamity that had been ground into us by the briefings that we'd got".


In the late 1980s the leverage available through derivatives threw up some volatile P&L figures.
Volkswagen came unstuck on some unauthorized currency deals with the National Bank of
Hungary. The broker in the middle Joachim Schmidt did a runner. The London borough of
Hammersmith & Fulham lost $500 million in swaps and swaptions and landed in a celebrated
court case. Britain's law lords controversially ruled the swaps null and void (ultra vires). Bankers
Trust's star currency trader, Andy Krieger, made a killing shorting the New Zealand dollar.

1987 to be exact

Snip http://voter08.wordpress.com/a-brief...e-kiwi-dollar/

In 1987, Andy Krieger, a 32-year-old currency trader at Bankers Trust, was carefully watching the currencies that were rallying against the dollar following the Black Monday crash. As investors and companies rushed out of the American dollar and into other currencies that had suffered less damage in the market crash, there were bound to be some currencies that would become fundamentally overvalued, creating a good opportunity for arbitrage. The currency Krieger targeted was the New Zealand dollar, also known as the kiwi.

Using the relatively new techniques afforded by options, Krieger took up a short position against the kiwi worth hundreds of millions of dollars. In fact, his sell orders were said to exceed the money supply of New Zealand. The selling pressure combined with the lack of currency in circulation caused the kiwi to drop sharply. It yo-yoed between a 3 and 5% loss while Krieger made millions for his employers.

One part of the legend recounts a worried New Zealand government official calling up Krieger's bosses and threatening Bankers Trust to try to get Krieger out of the kiwi. Krieger later left Bankers Trust to go work for George Soros.

As for Donkey

snip;
Key's first job was in 1982, as an auditor at McCulloch Menzies, and he then moved to be a project manager at Christchurch-based clothing manufacturer Lane Walker Rudkin for two years.^[7] Key began working as a foreign exchange dealer at Elders Finance in Wellington, and rose to the position of head foreign exchange trader two years later,^[8] then moved to Auckland-based Bankers Trust in 1988.^[3]

so He would have been at Elders finance october 1987 . and ya dont get promoted unless ya do something .............( the slimey wnker)

I need to re-organise this blog site as I screwed up the layout. and also as said find out what happened in Britain

http://mustnt-grumble.blogspot.jp/20...1_archive.html



Stephen

[mashman]

http://mustnt-grumble.blogspot.jp/20...1_archive.html

Stephen

NOW that was a great read... as far as I got anyway, and will very much keeping reading it to the end. It's a shame some of the blogs end half way through sentences (Do you need more space? If so, design a blog i.e. how you'd like it to look and navigate, and I'll build you one for fwee). Iz the half finishedposts coz you wuz passin out on occasion

[husaberg]

Hey Stephen Second link .


Godwin's law......lol

Interesting thing LWR went south in a big way.

Oh also Stephen you never said what you thought of my cylinder molds

[Brian d marge]

Hey Stephen Second link .


Godwin's law......lol

Interesting thing LWR went south in a big way.

Oh also Stephen you never said what you thought of my cylinder molds

the cylinder molds were great , my bad I have been meaning to reply , but just kept forgetting ! , shrinkage ok? how are u casting them !!

I used to get all my socks from LWR and live just round the corner by countdown and if donkey was in charge and it went south ,,what chance has nz !! hahahaha

Stephen

[Brian d marge]

NOW that was a great read... as far as I got anyway, and will very much keeping reading it to the end. It's a shame some of the blogs end half way through sentences (Do you need more space? If so, design a blog i.e. how you'd like it to look and navigate, and I'll build you one for fwee). Iz the half finishedposts coz you wuz passin out on occasion

, I wrte it on a bit of paper and then tried to cut paste ,,but , oh dear that went south

If there is a better bloggie place I can store my musing ,,,yes please !!!!

Stephen

[mashman]

, I wrte it on a bit of paper and then tried to cut paste ,,but , oh dear that went south

If there is a better bloggie place I can store my musing ,,,yes please !!!!

Stephen

heh... PTO does not mean please turn off.

I shall get my shitteth together and fashion something simple for ye.