Author: doberman

1 $ = 2.08 RMB -the newest Rate of Exchange [Copy link] 中文

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Post time 2006-4-4 19:09:59 |Display all floors

RoE #1

Ok, Canchin I'l try to play the piano without notes.

1. "So it is only theory" - you talk about PPP.

Here I completelly disagree. PPP is just an approximate factor showing the real value of the different coloured papers being used in this country, versus the difference (ratio) of the puchase value of the same money after being exchanged to other currency of another country and used in THAT country.
It is not a theory, but a very practical calculation/adjustment to figure out the reality of earning&living in country A , B and C.

Paper money has physically only one value - a thermal combustion heat unit value , usually presented as Qc. In MJ/kg , or BTU/pound. For money it is about 15-18 MJ per kg, which is a similar value to what we get from newspapers and magazines. So actually the process of buying newspapers should engage an equibalance weigh, provided both papers have the same moisture content.

Other than the thermodynamics values are imaginary, artistic and customary. It is all about belief,faith, - something like religion. Chapellans sit in the churches called banks. Cardinals in cathedrals named central banks. And the pope is the neverending subject of speculations and conspiracy theories to whether he/them exist, and who he/they are. We are supposed to believe that when somebody gives me a paper for my work, I will be able to exchange it for goods at so and so price. This is BS, just gambling!
More than that. In the time , when it becomes a must to use non-existing money, which is now only  a state of magnetization of hard discs on computers I will never see in my life, the next problem appears. In 10 years time , when I come to a kiosk with 100 bucks cach to buy a pack of cigarettes, they will catch me, detain for 24 hours and make full investigation on how can I pay CASH with such severe purchase! The USA will be probably the first country to catch cach bearers= suspected criminals.
The artifacts, which are seldomly still used in some countries have an enigmatic inscription; I have one just in front of my eyes:

I promise to pay the bearer on demand the sum of fifty pounds.

WTF is that? I will give her fifty and she will give me fifty? Is that what they call fifty/fifty? Where is the interess then(?),-as little Icchac would ask? I even do not know who makes such heart thumping promises! The queen on the right ,or the Chief Cashier on the left, who signed it.

We, Poles are not stupid. No no. I can imagine me trying to execute their(whose?) promise:
Andy Dob

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Post time 2006-4-4 19:11:23 |Display all floors

Doberman in Buck'n'Ham Palace

I go the Buck'n'ham Palace, wipe my shoes at the entrance, go through a few corridors and stairways, find a right door..knock,knock ( I am a gentleman, I knock before entering)...and then I walk in...

- Who the [peeeep] can't wait until I dress up!!

- Oh , paad'n Her Maajesty, it's mey and me mony.

- youuu (?) bloody Irish from Liverpool again?!!

- no, I am a Pole from Szczecin.

- sounds gaelic to me, POles and Irish are one anyway, I heard jokes..I even made up some of them..ha ha ha. So what do you want?

- I came to take these fifty pounds you promised.

- I promised?! Show me this...where is that promise?

- well, here -"I promise to pay the bearer on demand the sum of fifty pounds." And your picture is here, Your Royal Highness...why do people call you Highness(?) sister is taller..

- [Hlast!] Now you see , you bor, as long as I can slap you stupid face I am tall enough! Is this me picture...I mean MY picture?? Look at that!

- hmm, indeed, me Too Highness, now I have some serious you keep other queens here by chance..?

- no, not to my best knowledge, however sometimes I also have some doubts...Aren't you one of these sneaky paparazzis with a hidden microphone recording us now?

- no

- really not?!

- no , I assure you i do not ha..

- so you bloody should have it next time , idiot! Now you [peeep] off and get the hell out of here!

We , Poles ,are used to get screwd on the Island. Tough life. I go then to a British Bank, which is the bank of England in the United Kingdom. Already a mess.
Andy Dob

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Post time 2006-4-4 19:12:42 |Display all floors

Doberman in the spiritual chappel of the Holy Paper Money

I come to a clark behind the window..

- Good afternoon Sir

- come later, I'm busy now.

- when should I come then?

- when you can greet me "good morning, Sir"

- tomorrow?

- tomorrow is not a bank day.

- so a day after tomorrow...Ok Ok..I will make it again...

I go out , turn round the corner and come back to the bank.

- Good morning Sir.

- Shop with watches is on the next street.

- right, but you know, everything is relative as my grandpa's brother used to say.

- so what?

- he also proved it

- Ah, you should tell this in the beginning. What's the matter, khaver?

- I came to collect fifty pounds.

- your bank account numer...?

- no, I just have the promise here...look.

- you want to give me this banknote and take another? Ha ha ha ha...what a joke!

- well , actually not. It is written " I promise the bearer..". If I give you the banknote I would not be it's bearer any more, isn't it?

- well yes.

- so you see, I can't give you this paper if I still want to be a bearer.

- logicaly...yes.

- it is written that I will be giventh fifty pounds, but there is nothing here , that I have to give the paper away, is there?

- no

- fine , so we agreed, now give me fifty pounds.

- no way , khaver. This is a promise to change it to gold.

- I'm not too choosy, give me fifty pounds of gold...that will be... twenty four and...ah, cut it to twenty kilograms. I doubt this plastic bag will carry more. And you know what? I will give you this paper if you so insist.

- but we have no more gold.

- how it comes?

- do you think that you are the first with such kiepełe?
Andy Dob

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Post time 2006-4-4 19:13:35 |Display all floors

RoE and bonus points for applicants to universities

So as we see the function between a good and the colourfull paper is just a matter of some unknown mechanisms, which tell that I need to give so many sheets of this colour to buy that. Why 50 and not 4000 for a loaf of bread? Or 1, or 88? At times , when ministry of finance together with the central bank decide to denominate money, from day one to day next , suddenly a kilogram of eggs is not worth a paper with 20000 number imprint, but for example 2. THe same eggs.Different paper.

How is then the Rate of Exchange calculated , when there are no direct market mechanisms to leave it to the market sharks? There are indirect connections, but not DIRECT.
I see that such RoE can actually be set at any value. In case of RMB...1:1, 1:2, 1:8..1:50..etc. What's the problem of setting it at 1:25 for example? This is but sole decision of the respective authority, whoever it is. The otcome will ofcourse bear certain consequences. If the RoE will be set at a level bringing PPP to average 1 in relation to country Z - then the competition between companies in these two countries trying to sell products to such joint marked will be fair. If not - it will give advances to the companies producing in the country of PPP higher than 1. If additionally this factor (PPP) is firmly high , it may give not a just a cutting edge, but killing power to the companies. These are of course only the preliminary conditions and "bonus points". Similar thing like givng extra points for student applying to universities , if they come from rural regions , or their parents belong to the "more politically proper" class. The rest lays in hand/brains of these students, or companies. Will they utilize such favourable, handicapping conditions , or not.

It was disputable whether giving any extra points for students , because their parents were peasants , or workers (and not giving to other class) is fair. People were concerned that this equalize chances for them. There was some truth in this. But what would you say , when the living (and studying) conditions for sons of workers and sons of working intelligence have become so close (though still not exactly equal), that the too big number of points practically gives no chance now to the sons of working intelligency?
Andy Dob

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Post time 2006-4-4 19:36:08 |Display all floors


Originally posted by benemaru at 2006-4-4 09:52
Life-related products are advatages of China, it's stupid to compare your advatage
with your rival's diavatage.

Hi Benemaru. My ignorance gives me a free hand in dragging my stupidity to the bottom of it. :)

What my stupidity tells:

The accessible goods to people in a country depend on how much time they need to work to get a good. This is MAINLY depending on the LOCAL power of production and local level of the services rendered. Plus the sum of nation's trait on borrowin/saving and a net of credit banks/their conditions etc.

I could talk also about others, but here I will take an example of China. And a bit of the USA.

If the RoE is set up in the manner actually devaluing the local currency, which in case of China is not freely exchangeable, the effect will be: it is WORSE for the consumers, because this small part of goods, which are FOREIGN goood are MORE EXPENSIVE. The consumer can buy less , or nothing out of them. It however is BETTER for the chance to get work. It reduces unemployment.

So it compares in a sense -> what is better: to buy more vs to live with a risk being able to buy NIL.

The stupid question being asked by every folk in Europe and not only. But the answer is damn complicated.
Andy Dob

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Post time 2006-4-5 22:49:04 |Display all floors

I live quite happy, because I am dumb. If one day I became smart, then I will realize how poor I am and I am not handsome at all! Then I have to kill myself. That is why the people who killed themselves are all smarties.

You still not jump out your background. Poland may not be as developed as western Europe, but probably hard to find the poor villages as those are in China.

China economy, you can draw a line, and divide it into two pieces – the first piece is the one you talking about here, and everyone else in the world can see it, which is linked more or less to the global economy.

Another China economy, is the forgotten one. Many farmers in China, are growing what they eat… that is all. They don't have, or have very little purchase power, they have very little relationship with market. Or, you can say, they have their market, and their markets have no much relationship with the market we are talking about here.

Now the two economy in China is mergering, the first one is becoming bigger and bigger, the second one is becoming smaller and smaller, which we call it – urbanization

So when you calculate PPP, you very much ignored the second economy in China, but when you try to calculate the second economy in China, it keeps changing. This transition keeps China price low for 20 years, and it will keep China price low in next few decades.

The China economy needs motivate the second economy into the first, which is the effort to pull the poor out of poverty, and feed China economy machine with more cheap labors.

When you think about China rate, think about the transition from second economy to the first.

[ Last edited by luf2004 at 2006-4-6 12:00 AM ]

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Post time 2006-4-5 22:57:03 |Display all floors
i like this Polish car jack! where did you buy it? can I buy one?

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