Which is a game of chance most of British industry is fed up of playing. We need to either get into the Euro or Dollar zone soon before all our exporting manufacuring industry exports itself to Poland or China.
Then they need to sack their Treasury departments.
I haven't noticed the Japanese rushing into either currency. There is only one currency and that is the dollar. All commodities are priced from this. The price of a product is not greatly determined by exchange rates. Efficient manufacture relates costs to commodity prices and at the moment many of these are dropping in real terms. The Euro is a banana republic currency, IMO the current rate should be around E1.7 to the £ and correspondingly to the dollar. The Huf House price paid variation demonstrates poor commercial skills. If they had purchased a US house kit(heaven forbid) the price would have fallen by I guess around 10%. Currency variations are a fact of life and if your business can't cope with them then there is no hope for you. Manufacturing industry is rushing offshore because the present government is increasing the manufacturing overhead costs far above those of the competing nations. It also makes more sense to put your factory in Poland when shipping costs to the continent are much lower.
My observations on the product are:-
1) £0.5M and no garage? 2) How much is the window cleaning bill?! 3) How much are the maintenance costs going to be in our very wet climate?Regards Capitol
In article , Capitol writes
Indeed, as they were struggling with crowbars to get the corner bits to line up, the cut grain end of horizontal wooden beams was all too obvious. I wonder what they do to seal them ?.
Then you haven't been paying attention. The Asian central banks have bought about $22 trillion over the last few months.
Not "all" commodities. Just most.
Unfortunately there is one 'commodity' most companies use quite a lot of and isn't priced in dollars - labour !
It is quite legal to set directors pay on dollars but not employees. When almost your whole market uses dollars (i.e. an exporting company - the ones we need most) this is bad news.
Hate to say it, but if you can't absorb a 20% currency shift, then you shouldn't be in business. If your labour costs are that high, then you're either in the wrong country or the wrong business.
Regards Capitol
yup, but at what price does this gamble come?
with a transaction such as this what you want is certainty - all of your economic considerations will have been worked out at a particular exchange rate, and if you're not in a position to be able to absorb any negative currency swings without pain then forget about the chance of paying less if things do happen to go your way and take the boring-but-safe option.
-- Richard Sampson
email me at richard at olifant d-ot co do-t uk
That was my point. The business did move almost all manufacturing abroad. Problem is that at this rate there won't be any manufacturing (i.e. basic wealth creation) in this country - there simply isn't the value add to cover UK labour costs.
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