Exporting our minerals, wood and pulp is very short sighted.

wow…Liberals patting themselves on the back again…too bad the exports to China where raw logs taking BC sawmills jobs away

Should be a good new story no matter what flavour of government you like. This province’s sucess is tied directly to its natural resources. So the more digging, cutting or drilling we can do, the more education , health care, roads, recreation and services we can get. Its the way it has always been and the way it will always be.

How did our imports do? What is our balance of trade picture like with the top ten trading partners?

I know that info is available, but why do we never get to see those figures reported alongside the export figures?

Conspicuoulsy absent are the figures of exports to the USA of course.

As far as any government patting itself on the back goes, I am not quite understanding how any government, liked or disliked by someone, should report out in the case of it being so called “positive” information. Perhaps governments should refrain from reporting anything.

Stop it with that common sense, Streetwise. It’s not welcome around here.

“Exporting our minerals, wood and pulp is very short sighted.”

What’s truly astounding is how few people understand how those materials are converted into things that people buy here in Canada, and everywhere else in the world for that matter. Where do you think the raw materials came from that go into the computer you’re using?

But go ahead, keep on living in ignorance.

Pulp is used to make the cardboard shipping boxes

Oil is used for the extruded foam inserts to protect the computer during shipping

Oil is used to make the plastic casing and other parts.

etc. etc.

All the “value added” to the raw materials is generally provided in countries other than Canada, as is the assembly of the various parts and the creation of the design of the machinery, whether it is for a functional or aesthetic reason.

The $7.56 worth of raw material we ship has to be bought back by our distributors for $231.39 and put on sale at Future Shop for $429.99.

We make far more money on the domestic transportation, storage and marketing of the article than on the raw material.

There is a similar amount of money made by those who manufacture the item and provide the transportation, storage and marketing outside of Canada. We could get access to that, and do in some cases. We need to do that with more.

Hey, Johnny Belt, how is that for ingorance of how the system works ……??

Thanks once again gus. I sure am glad there’s someone around here who’s an expert in pretty much everything.

Suppose BC exports 60% of its production, and imports 40% of its consumption. The BC Liberals are happy. Raise the ratio to 85% exports vs. 15% imports, and they’re overjoyed. But what if we exported 100% of what we produced, and imported nothing? Are we getting richer, or poorer? Think about it. ‘Money’ does NOT always reflect physical reality.

Now perhaps those who allude that THEY do not “live in ignorance” could explain to me just how any country that CAN’T ~ never mind whether it wants to or not, (which in our case we don’t)~ but CAN’T, buy and fully pay for ALL its own production from ALL the wages, salaries and profits distributed as Incomes in the course of making that production, can then buy and fully pay for all the EXCHANGE of that production through international ‘trade’?

And further, that if it CAN’T buy and fully pay for ALL the domestic production or alternate imports received instead, from ALL those Incomes, taken collectively, just how then CAN they be bought?

By going into debt, you say? Well, sure, and that’s just what we do. But how then, in the totality of things, can that debt ever be repaid? Remember now, a so-called “favourable” Balance of Trade internationally means that we are, in effect, receiving some other country’s ‘money’ for the difference. But that country’s ‘money is EFFECTIVE DEMAND for ITS goods. Not ours. Unless we can use it to purchase ITS goods, in exchange for ours, it is simply useless paper to us. But that’s NOT the current idea, is it? It’s not a ‘Balance’ of Trade that’s desired, anywhere. It’s a “favourable” Balance of Trade. How can a set-up that results in our exporting more in actual real wealth than what we receive back in alternate actual real wealth be “favourable” to us?

There is quite a stretch from being ignorant to being an expert.

I like to think of some just being a bit more streetwise than others.

“Suppose BC exports 60% of its production, and imports 40% of its consumption”

That means that 40% of its production is for internal consumption

Then it imports another 40% of its consumption.

That means that it has 80% of its consumption … 50% from internal production and 50% from external production.

So where does the other 20% of its consumption come from?

On the other hand, if we exported 100% of what we produced and imported nothing, we would not be able to produce anything since we would all be dead.

So that is an impossibility.

On the other hand, if we exported nothing and imported nothing, yet we consumed what we produced, we would be self sufficient.

;-)

On this sunny afternoon, it is nice to see all the wanna be economists are hard at work espousing the way it should be. Makes me feel real good.

Well, if we were physically capable of being fully self-sufficient, shouldn’t we also be fully financially capable, too?

Why do we think we have to import some other country’s ‘money’ to live? And would all go to ruination without it? When that isn’t the case physically at all? As anyone with eyes to look should plainly be able to see. If all our international markets were closed to us right now, would we just sit down in despair and starve to death? Or would we finally use our brains, and do what should’ve been done years ago? Make the figures of Finance properly REFLECT the physical realities of what we are still able to Produce and how much we need and desire to Consume of it?

We put ourselves in a position where we believe we are ‘forced’ to trade internationally for financial purposes, instead of being ‘free’ to trade for physical ones of mutual to us and our trading partners.

Really, the only sane purpose of international trade is to enable the diversification of Consumption in each of the countries participating. That isn’t what we’ve got now as being its primary purpose.

There is simply no way, physically, you can move our raw materials halfway around the world for manufacture, and then bring finished products the same distance back again for sale, and say that this is ‘cheaper’ than making those finished products here. There are enormous additional real costs involved in doing this.

Physically, an hour’s labour is an hour’s labour. And the productivity per man-hour here is generally higher in terms of actual output, than it is in most of the places we send our resources to, and buy finished goods back from. This kind of ‘trade’ enslaves the working population of the raw material importer, and it impoverishes the (formerly working) one of the country receiving its finished products exports.

Not so sunny where I am, runner46. Something to relieve the monotony of an otherwise boring day.

“Well, if we were physically capable of being fully self-sufficient, shouldn’t we also be fully financially capable, too?”

Of course. Not only capable, but we would be since money is simply a measure of the value of goods and services.

It is when money itself is considered as a commodity and is traded for differnt currencies that the trouble begins.

Your last paragraph is so true. Theoretically a state of relative equilibrium should be reached and there will be a rationalization of the creation of products and the provision of labour which will be related more to geography once more rather than labour costs.

socred: “There is simply no way, physically, you can move our raw materials halfway around the world for manufacture, and then bring finished products the same distance back again for sale, and say that this is ‘cheaper’ than making those finished products here. “

Did somebody tell Walmart this?

Funny how the export amounts are reported in $ amounts! I guess if the price of a thousand board feet of lumber doubled someone would report increased exports? BTW a3% increase is just a reflection of inflation. :-)

To state the problem as simply as I believe possible, the present financial set-up is flawed. While it correctly CHARGES the consuming public with ‘Capital Depreciation’ in the price of each individual product, it currently lacks a mechanism to fully CREDIT that consuming public with the concurrent ‘Capital Appreciation’ inherent in our increasing ability to more efficiently make ALL products over any same given time period.

While the REAL cost of production is actually falling, the FINANCIAL cost of it, as presently determined, is going the other way. And price, to Consumers, is based now solely on that FINANCIAL cost. It should be based instead on REAL cost. And to them, be considerably lower. That is not a difficult thing to do.

Normally, barring natural catastrophes, or the effects of war, or other actual destruction of productive capacity, there is an ongoing greater increase in overall Capital Appreciation relative to ongoing overall Capital Depreciation over any given period of time.

While we do gain some from this through improvements in processes which lower ‘unit’ costs, and prices, through mass production efficiencies, it is still the TOTAL costs of ALL the ‘units’ made that have to be continually liquidated fully to effect any real savings. This becomes difficult, if not impossible, to sustain over time.

Our current methods of correction are to encourage further and increased Capital spending. Or increased Exports. The first is paid for from further expansion of bank created financial credit. Which distributes Incomes NOW and ‘expenses’ the Costs (or taxes, if it’s government engaging in this), into the future.

This enables past production to be more fully sold into consumption in the present. But only by increasingly mortgaging the future. It is an utterly inane policy.

It also has the definite disadvantage of being ‘inflationary’. While it does raise the rate of business profit, from which those bank loans will be repaid, it also continually diminishes the actual purchasing power of each dollar in terms of what it will buy.

We all get to work with bigger figures, but the prosperity they should enable continues to elude an increasing number of our citizens. And our businesses, too, are not really being advantaged. Since their costs keep rising, and filching more of those larger profits to try to meet them.

We can’t ever correct this the way we’ve been trying. Nor can we do it by ‘capturing’ foreign markets with our exports. We will only succeed in making ourselves poorer ~ both financially and materially ~ if we continue this course.

The proper method of correction is to continually relate the mean rate of overall national Production to the mean rate of overall national Consumption, in the economy as a whole, over any appropriate same time periods.

What we ‘consume’ will virtually always be found to be some fraction of what we ‘produce’. Indeed, over time, it can’t be more, because no one can consume what has not yet been produced. This fraction, over, say, any one month time period, can be expressed as a percentage.

That percentage could be applied as a REBATE on the prices of all consumables as presently ‘financially’ established. It would, in effect, actually LOWER all prices to consumers, while still leaving retailers the ability to get the price they currently need to cover their costs and make an adequate profit. The ‘money’ to pay such a rebate could be created by the Bank of Canada. No taxation, or socialistic attempts to “rob Peter to pay Paul” are involved. Nor is there any possibility of inflation ~ since the ‘money’ created is being used to LOWER prices to Consumers. Not in a manner that will raise them.

Johnny, Wal-Mart has discovered that the secret of success in modern retailing is to find the shortest distance for its products from store shelf through the Consumer to the landfill!

In a sense, you could say it ‘externalises’ its costs. Since WE are the ones who get taxed more, and pay ever increasing tipping fees, as those landfills overflow.

And we are the ones who pay the price the mis-guided ‘environmentalists’ demand when bankrupt, mis-managed, governments impose perverted things like Carbon Taxes that impede our own industries in keeping their costs down, while leaving fuel wasted in criss-crossing the planet with resources out and junk back in completely untouched.

Socredible wrote: “it currently lacks a mechanism to fully CREDIT that consuming public with the concurrent ‘Capital Appreciation’ inherent in our increasing ability to more efficiently make ALL products over any same given time period.”

I was kinda thinkin’ that the increased affluence of people in the industrialized world was the CREDIT. The tendency may be that the affluence is tending more and more to not be fairly distributed. That is a separate matter.

Some of that affluence is visible through the normal acquisition of products. Many more, however, are visible through services, which is the sector which has grown to accommodate that affluence – medicine, travel, electronic communication, eating away from home, overabundance of food (the latter two being seen as the increase in obesity), reduction of physical labour, increase in number of years spent attending formal education. Let us not forget that the average lifespan of an individual has increased considerably.

Some of that “affluence” is optional while other affluence has become virtually necessary to live in today’s society. Nevertheless, life in 2012 Toronto is different from life in Toronto in 1962, 1912, 1862, 1812.

Affluence is not objectively measured through financial metrics by themselves. Affluence is measured in conjunction with social metrics which, of course, have to be adjusted somewhat in recognition of various cultures.

socred: “Johnny, Wal-Mart has discovered that the secret of success in modern retailing is to find the shortest distance for its products from store shelf through the Consumer to the landfill! “

Maybe, but man is that place busy on the weekend… along with Canadian Tire, Home Depot, Costco, etc.

Well, while there is undoubtedly an increase in affluence, or the material ‘standard of living’, I think the overall ‘cost of living’ for an ever increasing number of people has risen even faster. And continues to.

Otherwise the ever rising ratio of overall personal debt to disposable income wouldn’t be happening. Just in the last year alone that’s gone from 147% to 153% on average. And instead of trying to correct that, we have governments like the BC Liberals that are trying to tax it! Witness the HST.

How far can we go into hock before the risks of going further offer an inadequate reward for any further advancement of credit? Right now, if there was a mere 2% rise in interest rates, a lot of people would have trouble making the payments on their existing indebtedness.

And conversely , if there was a sudden reluctance on the part of the public to borrow and spend? If more people actually did try to “live within their means”, as that phrase is commonly understood? Well, a lot of them very quickly wouldn’t have any “means”. Period. They’d be unemployed.

I think sometimes we look at the negative side of affluenza ~ at things like growing childhood and adult obesity, for instance. But that’s not necessarily because there’s an over abundance of food, but rather more likely an inability of the modern family, with both parents out working to keep up the payments, to still have the time to prepare and eat proper food.

It’s easier to feed the kids at McDonald’s, or Pizza Hut, or get a bucket of chicken from KFC, than to home cook a more healthful meal. And maybe cheaper, too.

And we can criticise the compulsive shopper for having to have the latest this or that, and maxing out her credit card in the process. But I wonder just how much of that is driven by an insecurity that if she doesn’t ‘buy now’ she might not be able to afford what she just ‘has to have’ in the future?

I think it’s been proven long ago that with a rising income, the propensity to consume actually declines. Instead of repeatedly buying seemingly affordable crap that doesn’t last, people tend to buy more durable products that do. So I don’t really think we can lay the blame for our present woes on affluence to any great degree. Or sniff, as a long-time former Governor of the Bank of England once did, “That too much prosperity isn’t good for the country.” Shortly before HIS annual stipend was raised by a few thousand pounds. If we’re going to busy ourselves creating the capacity to Produce, that only makes sense if we also enable an equal ability to Consume. Otherwise we really are “working for nothing.”

We’ve got all those chains where we are, too, Johnny. And the other five days of the week the garbage trucks roll steadily onward to the dump.

“It’s easier to feed the kids at McDonald’s, or Pizza Hut, or get a bucket of chicken from KFC, than to home cook a more healthful meal. And maybe cheaper, too.”

Has anyone ever wondered how come amateur home cooking is healthier than professionally cooked meals, whether they are fast food or a nice sit down restaurant meal. It should be the reverse, on average.

We have product standards, including safety standards for just about everything we buy, but we cannot manage to do the same for centrally controlled fast food outlets.

What is wrong with this picture?

Just simply ‘cost’ and ‘price’, gus. We use those two words interchangeably, as if one were the same as the other. Kind of like ‘jobs’ and ‘incomes’. Or ‘work’ and ‘wages’. But they’re not the same thing. The ‘cost’ of a home cooked meal doesn’t have to be recovered in ‘price’. It’s recovered in ‘satisfaction’. If the one preparing it is a good cook, and is concerned more about what’s being eaten rather than the forced priority of a financial return.

Many people over the years have asked the question, “What is Social Credit”? Those of us in BC mostly remember it as the name of a more or less center-right political Party that governed this Province, and also Alberta, for a number of decades. And also was active Federally, even ousting the NDP for number two spot on the Opposition side once, way back in the 1960’s.

But the original idea behind those Parties, and what the name originally described was, “The power of people in association, or society, to produce an intended result as measured by their ‘satisfaction’.”

What was originally hoped for was to make some changes financially that would enable ‘satisfaction’ to be the main object of human endeavor. Not ‘financial return’, nor ’employment’. Both of which DO have a place, of course, but properly should never be the principal reasons for doing anything.

Maybe if people took a litle more responsibility in their lives. That’s what’s missing imo.

It doesn’t wash with me when you’re blaming McDonalds because you’re fat and your credit card company because you’re in debt up to your eyeballs.

Who’s ‘blaming’ McDonald’s and your credit card company for anything, Johnny? Not me. People should certainly take more responsibility in their lives. If we all did that we wouldn’t be increasingly ‘working for nothing’.