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Germany the economy no one understands

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odysseus2000
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Germany the economy no one understands

#415676

Postby odysseus2000 » May 27th, 2021, 10:17 pm

Super interesting article about the German economy, an Economy no one understands:

https://www.conradbastable.com/essays/t ... nderstands

Hat-tip to Adafruit, NY for link

Regards,

SalvorHardin
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Re: Germany the economy no one understands

#415686

Postby SalvorHardin » May 27th, 2021, 10:41 pm

IMHO the key factors in why Germany has such a massive trade surplus in manufactured goods are:

1) The Germans are extremely good at this type of production. It's Ricardo's theory of comparative advantage at work.

2) The Euro has given Germany an undervalued currency, making its exports artificially cheap.

This has really screwed Italy, arguably Germany's biggest competitor in manufacturing in the EU. Italy's economy has barely grown since it joined the Euro. Not a coincidence IMHO.

If Germany still had the Deutschmark, I reckon it would be at least 20% higher than the Euro.

3) European Union protectionism gives German manufacturers the defence of another barrier to entry from competitors.

4) EU laws often favour Germans. A big aim of lobbying is to create laws designed to protect incumbents, often disguised as health and safety.

The vacuum cleaner bag regulations are a good example; a stitch up to prevent competition from bagless cleaners (e.g. Dyson) from disrupting the bagged cleaner market (Germany makes a lot of these).

As for Volkswagen cheating on the

AsleepInYorkshire
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Re: Germany the economy no one understands

#415693

Postby AsleepInYorkshire » May 27th, 2021, 11:09 pm

SalvorHardin wrote:IMHO the key factors in why Germany has such a massive trade surplus in manufactured goods are:

1) The Germans are extremely good at this type of production. It's Ricardo's theory of comparative advantage at work.

2) The Euro has given Germany an undervalued currency, making its exports artificially cheap.

This has really screwed Italy, arguably Germany's biggest competitor in manufacturing in the EU. Italy's economy has barely grown since it joined the Euro. Not a coincidence IMHO.

If Germany still had the Deutschmark, I reckon it would be at least 20% higher than the Euro.

3) European Union protectionism gives German manufacturers the defence of another barrier to entry from competitors.

4) EU laws often favour Germans. A big aim of lobbying is to create laws designed to protect incumbents, often disguised as health and safety.

The vacuum cleaner bag regulations are a good example; a stitch up to prevent competition from bagless cleaners (e.g. Dyson) from disrupting the bagged cleaner market (Germany makes a lot of these).

As for Volkswagen cheating on the

That was just starting to get interesting :lol:

Germany has manufactured EU rules and regulations to meet its needs and the EU always felt like a puppet of Germany. France borders on a similar approach in my opinion.

Anyway about our carrier strike group :lol:

AiY

JamesMuenchen
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Re: Germany the economy no one understands

#415719

Postby JamesMuenchen » May 28th, 2021, 6:51 am

Indeed. Germany plays the EU game as a pro.

German firms hoover up a lot of EU development contracts especially in the East. And German firms control a lot of the media in those countries too.

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Re: Germany the economy no one understands

#415731

Postby monabri » May 28th, 2021, 8:22 am

Not too shabby at football, neither!

scrumpyjack
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Re: Germany the economy no one understands

#415738

Postby scrumpyjack » May 28th, 2021, 9:05 am

Of course one should not forget that it is Germany, in effect, that has lent/given money to other EU countries so that they can buy German goods. It is extremely doubtful that those debts can ever be repaid. As the old saying goes, if you owe the bank 10,000 you have a problem. If you owe the bank 100 billion, the bank has a problem!

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Re: Germany the economy no one understands

#415760

Postby stevensfo » May 28th, 2021, 10:38 am

SalvorHardin wrote:IMHO the key factors in why Germany has such a massive trade surplus in manufactured goods are:


The vacuum cleaner bag regulations are a good example; a stitch up to prevent competition from bagless cleaners (e.g. Dyson) from disrupting the bagged cleaner market (Germany makes a lot of these).



You know, I had no idea that vacuum cleaners with bags still existed! I remember years of searching shops to find the correct bag and when bagless came along I thought it was one of the best ideas ever. The trick is, as with many appliances, make sure that spare parts are available online before buying. There are really people still out there having to find the right bag?? :?

Steve

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Re: Germany the economy no one understands

#415787

Postby murraypaul » May 28th, 2021, 11:25 am

One very large difference about Germany is the value placed on vocational education, the formalisation of trade qualifications and the higher status given to tradespersons.

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Re: Germany the economy no one understands

#427778

Postby 1nvest » July 15th, 2021, 12:56 am

Following the 2008/9 financial crisis massive amounts of bad German bets (debt) were moved over to the ECB, in effect the rest of the Eurozone bailed Germany out (whilst Greece's drop in the ocean problems by contrast weren't).


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