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Forums - Sales Discussion - Euro/Pound dive against the Yen

Mummelmann on 05 February 2010
kowenicki said:
As NJ5 said, I think a few of us have been talking about this for some time... actually, probably just me and him.

But it has always been knocked down as negative spin and as a way of having a dig at Japan and particularly Sony... It isnt and never was, its just hard economic reality.

Japan has some very hard questions to answer and some tough decisions to make.

I eluded to a lot of it in this thread:

http://www.vgchartz.com/forum/thread.php?id=98412

some of the information in there is very bad.

I never thought it was over myself, I live in a disillusioned country with the biggest cash reserve in the world so I try to keep up to date with the standings of the world. And economy is a rather interesting subject in some instances so I quite like it.

On a site like Vgchartz one has to expect a different kind of view than other types of forums; first off is the average age, which I can't imagine is much beyond 18 years or so and then there's the fact that most users are interested in economy only on a videogame basis (if that) and not in the grander scheme of things.

For people who are either on the threshold of establishing a home, career and family, or indeed in the middle of it right now, things are different. Seeing the big picture is how one plots the future. I'm not worried about videogames at all when I think ten years ahead but I am somewhat worried about jobs, pay, mortgages and the overall condition of the Western markets (there will be a shift in East to West power ratio with the increase of wealth and standard of living in China, India and other Asian markets of size and we won't reach their level of self sufficency at all for decades or when we're forced to and all this is bound to affact our lives greatly in the next two to three decades).



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NJ5 on 05 February 2010
Mummelmann said:
kowenicki said:
As NJ5 said, I think a few of us have been talking about this for some time... actually, probably just me and him.

But it has always been knocked down as negative spin and as a way of having a dig at Japan and particularly Sony... It isnt and never was, its just hard economic reality.

Japan has some very hard questions to answer and some tough decisions to make.

I eluded to a lot of it in this thread:

http://www.vgchartz.com/forum/thread.php?id=98412

some of the information in there is very bad.

I never thought it was over myself, I live in a desillusioned country with the biggest cash reserve in the world so I try to keep up to date with the standings of the world. And economy is a rather interesting subject in some instances so I quite like it.

On a site like Vgchartz one has to expect a different kind of view than other types of forums; first off is the average age, which I can't imagine is much beyond 18 years or so and then there's the fact that most users are interested in economy only on a videogame basis (if that) and not in the grander scheme of things.

For people who are either on the threshold of establishing a home, career and family, or indeed in the middle of it right now, things are different. Seeing the big picture is how one plots the future. I'm not worried about videogames at all when I think ten years ahead but I am somewhat worried about jobs, pay, mortgages and the overall condition of the Western markets (there will be a shift in East to West power ratio with the increase of wealth and standard of living in China, India and other Asian markets of size and we won't reach their level of self sufficency at all for decades or when we're forced to and all this is bound to affact our lives greatly in the next two to three decades).

Yeah Norway should do well as long as it has oil to export.

It's really a unique case as far as "Western" countries go.

 



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Kasz216 on 05 February 2010
kowenicki said:
NJ5 said:
kowenicki said:
Dont worry, the Yen will have to be devalued soon, it has to unless Japan want to utterly screw themselves. They have to do something soon, Japans tax take this year wont even meat their own debt payments. They are effectively bankrupt too.

On Europe... expect Portugal, Spain and Italy to follow Greece soon.

It was sooooo obvious that a common monetary policy and common currency couldnt work for such different economies... especially economies propped up by inflows of european cash.

In some way I think it is a good thing. Eurozone countries are being pressured to stop running big deficits, while countries like the US and UK just print their way out of the problem with little pressure to really fix the deficits.

While the latter is more politically acceptable, it has already resulted in a big loss of purchasing power for British people, at least for imported stuff. Sure, it helps exporters, but the UK is not an export economy right?

 

Actually that is a bit of a myth, the UK does export quite a bit.  But yeah it isnt a huge export economy.

Im not sure European countries are being pressured into not running huge deficits... well... actaully clearly they arent.  As the PIGS economies (as ecomonmist call them) show.  PIGS being a rather derogatory acronym used by economists for Portugal, Italy (sometimes Ireland), Greece and Spain.

These countries have thus far spent like crazy knowing the net inflow of cash would prop them up, hence the myth that was the Celtic Tiger (Ireland)... entirely built on free money from the EU -  the definition of boom and bust.  As soon as this EU cash slowed or there was a real downturn it all fell to pieces. 

Go to Spain and Portugal, look at the nice new airports, roads and civic buildings... how can these countries afford this?  Simple fact is they cant.  It is built on European money.  I'm pretty sure there will be a few German and French wishing they had kept their own currency and control right now.  They are the ones who may well need to prop up Greece and others to ensure they are not knocked of course in their own recoveries.

 

Yep, UK is actually around 9th when it comes to exports in the world...

Although it's 6th in the world when it comes to imports... so I wonder if it really helps or hurts.

 



Bamboleo on 05 February 2010
kowenicki said:
Dont worry, the Yen will have to be devalued soon, it has to unless Japan want to utterly screw themselves. They have to do something soon, Japans tax take this year wont even meat their own debt payments. They are effectively bankrupt too.

On Europe... expect Portugal, Spain and Italy to follow Greece soon.

It was sooooo obvious that a common monetary policy and common currency couldnt work for such different economies... especially economies propped up by inflows of european cash.

To follow Greece where?

 

Sorry I didn't get that, but I'm curious since Portugal is a worst country than Greece in terms of economy. I even think it is the worst country in Europe, we are about to be kicked soon (2012) if our debts continue to raise.



Mummelmann on 05 February 2010

Well, the overall condition of the market and the strained economies we trade with (mainly the UK and France) in gas and petroleum has taken its toll and it appears that 2009 may be the first year since 1998 we won't have any significant profit on the overall budget due to having to drastically increase the flow of oil cash spending on public posts and problems and of course due to the simple fact that the fund itself hasn't really had a boiling market to grow in lately.
It can't be called a crisis though, seeing as how the oil fund is currently sitting at 140-150% of our GDP and nearly 300% of the national revised budget for 2009.

Overall oil fund spending increased by around 8% last year and seems to be growing still with a possible 10% increase in 2010.



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NJ5 on 05 February 2010
Bamboleo said:
kowenicki said:
Dont worry, the Yen will have to be devalued soon, it has to unless Japan want to utterly screw themselves. They have to do something soon, Japans tax take this year wont even meat their own debt payments. They are effectively bankrupt too.

On Europe... expect Portugal, Spain and Italy to follow Greece soon.

It was sooooo obvious that a common monetary policy and common currency couldnt work for such different economies... especially economies propped up by inflows of european cash.

To follow Greece where?

 

Sorry I didn't get that, but I'm curious since Portugal is a worst country than Greece in terms of economy. I even think it is the worst country in Europe, we are about to be kicked soon (2012) if our debts continue to raise.

Greece has bigger problems that Portugal in terms of debt and deficit.

In any case, don't get blinded by the current media reporting... Portugal's debt and deficit are nothing out of the ordinary compared to other countries (as I said, deficits and debt are similar to many countries including Germany and the US, proportionally).

What's happening is that the bond market is pressuring countries one by one... Portugal is in the crosshairs now, which results in a lot of attention from the media. Soon it will be Spain and Italy, which will be a whole other ball game given that they would have a much bigger impact if they didn't pay their debt.

 



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NJ5 on 05 February 2010

Greece, Spain, Portugal, Ireland and Italy together account for 40% of the eurozone's debt.


Ummm, this looks a bit like misleading statistics to me. Those countries added together have 133 million people, what is the population of the Eurozone?

EU population is 500 million, take 61m off for UK, 10m off for Sweden, 5m off for Denmark (which are not in the Eurozone) and that makes it at most 425 million people in the Eurozone. So those countries make up more than 30% of the population.



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Bamboleo on 05 February 2010

^

Wow I was unaware of that.

12.7% public debt last year for greece is just insane, Portugal is nearly at 3% and everyone in the media is saying the sky will shatter upon us this year.



I don't wanna imagine what happens if my country get's kicked from EU :(



woopah on 05 February 2010
kowenicki said:
woopah said:
once I leave uni i'm gunna be very much screwed


that depends on what you have studied surely?

i'm doing history, either way i'm still gunna leave uni with over £15k worth of debt, and thats if i leave after 3 years.  and from what i'm hearing  most 3rd years are staying on for a 4th because they can't get jobs anywhere



 nintendo fanboy, but the good kind

proud soldier of nintopia

 

NJ5 on 05 February 2010
Bamboleo said:
^

Wow I was unaware of that.

12.7% public debt last year for greece is just insane, Portugal is nearly at 3% and everyone in the media is saying the sky will shatter upon us this year.



I don't wanna imagine what happens if my country get's kicked from EU :(

No that is not correct, Portugal's deficit was 9.3% of GDP in 2009, and will probably not be very different in 2010...

Which is really bad. But other countries are really bad too in terms of deficit, there are few countries which have much less than 10% deficits.

 



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