Us Property Prices The Total Opposite Of Uk

cloud_dog

mikael wrote: »

In this case reducing rates could make any downturn even worse.

Yes and no. Lowering interest rates would devalue the GBP and that inturn would make our exports more attractive (if we still make anything) and (eventually) you would start to 'grow' your way out of problems but there would still be an initial hit.

This is a scenario many people are beginnig to think the US (Fed) might be willing to accept - but, ho knows.

cloud_dog

ManAtHome

Yes CD, but the US still has an export capacity (and billions of US holdings with the Chinese), UK doesn't (IMHO). Most of our imports are valued in dollars so if the pound blobs... I guess everything does..?

PosterBoy77

cloud_dog wrote: »

Yes and no. Lowering interest rates would devalue the GBP and that inturn would make our exports more attractive (if we still make anything) and (eventually) you would start to 'grow' your way out of problems but there would still be an initial hit.

This is a scenario many people are beginnig to think the US (Fed) might be willing to accept - but, ho knows.

cloud_dog

Apparently close to 80% of GDP is now due to our "service industry". The UK just does not have enough manufacturing capacity left to take up any slack, even if it can grow. With the tax and spend government we have any company that does want to expand any manufacturing, will probably open up new factories in Eastern Europe.

There would be a huge intial hit. Just look at how long it has taken Germany to turn the corner and they have a huge manufacturing base producing products the world actually wants. Their manufacturing companies have expanded through investing in robotics and large amounts of automation, which has meant that new jobs were not being produced very fast either. If Germany struggled there is not a chance for us to survive on our few exports.

The US still has a much larger manufacturing base in percentage terms than the UK, so they may just survive a bit better by adopting such a policy.

exil

On the contrary, the US is even more service-based than the UK. Manufacturing jobs have been exported steadily from the US over the last few decades. Manufacturing contributes 15% of US GDP compared to 16% in the UK, 21% in Japan and 22% in Germany. And that is approximately the order of the health of those economies. Western countries are not rich because they manufacture things!

And those that do manufacture things catch cold first when the economic winds blow, Japan suffered more from the last 2 recessions (early 90s and around 2002) than we did, and Germany has higher unemployment than we or the Americans do.

PosterBoy77

exil wrote: »

On the contrary, the US is even more service-based than the UK. Manufacturing jobs have been exported steadily from the US over the last few decades. Manufacturing contributes 15% of US GDP compared to 16% in the UK, 21% in Japan and 22% in Germany. And that is approximately the order of the health of those economies. Western countries are not rich because they manufacture things!

And those that do manufacture things catch cold first when the economic winds blow, Japan suffered more from the last 2 recessions (early 90s and around 2002) than we did, and Germany has higher unemployment than we or the Americans do.

Germany has higher unemployment because it merged with the former East Germany. You cannot compare the health of German manufacturing by its unemployment level. If you look at the stats for the part of Germany that used to be West Germany, it will be a much better comparison. Germany is still the richest country in Europe and it comes from manufacturing things.

Western countries that do not manufacture things may at the moment still have a good standard of living, but they are not rich - they are saddled with debt and someday it will need to be repaid.

If every country in the world only had service industries the world would be poor.

If you think the UK is the healthiest economy in the world, then just give it another ten years and see where we are then! The health is an illusion.

Mrs_pbradley936

I own a house in Florida and have lots of American friends. The economy is different in that they can claim their interest payments off their tax, some of you younger people may not know that we used to be able to as well. What that means in practice is that older people tend to have mortgages as well as young people. As soon as there is any equity in the home they tend to re-mortgage or take out a “home equity loan”. The social housing policy is also very different, here people likely to run into trouble with money/debt will often live in social housing because there is a lot of it (comparatively). The sub prime mortgages could probably be compared to “self cert” which often have a higher rate. So you have a situation whereby people that cannot really afford houses are being lent money and they go on the get into trouble.

exil

mikael wrote: »

Germany has higher unemployment because it merged with the former East Germany. You cannot compare the health of German manufacturing by its unemployment level. If you look at the stats for the part of Germany that used to be West Germany, it will be a much better comparison. Germany is still the richest country in Europe and it comes from manufacturing things.

Western countries that do not manufacture things may at the moment still have a good standard of living, but they are not rich - they are saddled with debt and someday it will need to be repaid.

If every country in the world only had service industries the world would be poor.

If you think the UK is the healthiest economy in the world, then just give it another ten years and see where we are then! The health is an illusion.

I think your economics is several decades out of date. The Third World generates raw materials and manufactures things and exports them to the West in exchange for services. And the West does better out of the deal, hence its high standard of living. In a few decades this may change as the 3rd World starts to move into providing its own services and we no longer have anything to exchange for raw materials and manufactures - but I'll be dead and buried by then.

Germany - GDP per head, PPP basis - $30,579
UK - $30,436

Public debt as %age of GDP

Germany 67%
France 65%
USA 65%
UK 42%

and Japan - hold on to your seat - 176%!!!!

benood

mikael wrote: »

Western countries that do not manufacture things may at the moment still have a good standard of living, but they are not rich - they are saddled with debt and someday it will need to be repaid.

If every country in the world only had service industries the world would be poor.

If you think the UK is the healthiest economy in the world, then just give it another ten years and see where we are then! The health is an illusion.

I was told this by some German friends fifteen years ago....

ManAtHome

Exil, do you know if the public debt as GDP% includes anything similar to UK pension provision and PFI.

Would you regard Windows as a product or a service (and/or a pile of ..... makes more money than Linux though - lol). Really just a general high-tech question - obviously not heaps of dosh in banging out the CDs, but quite a bit in providing the content.

Generali

ManAtHome wrote: »

Exil, do you know if the public debt as GDP% includes anything similar to UK pension provision and PFI.

That figure for the UK doesn't include PFI or pension liabilities. However, German pension liabilities are far higher than the UK's as they don't have nearly as much private pension provision as the UK does. I believe that the German birth rate is a fair way below the UK's which will cause problems in the future too.