Devaluation and Exports

[Assasin]

http://rjrnewsonline.com/opinion/dev...on-and-exports

[Stonigut]

Sass here is more to add to this story.

On the devaluation issue the real deal is we devalue theoretically so you can gain a short term advantage in export markets and push you foot further into the door of foreign markets and if you can source locally and there is room for supply source expansion which would have a strong multiplier effect on local suppliers sourcing locally, then devaluation is a wickedly great tool. As it means it give you a chance to compete against other sources in the hard fx country whose price remains static while you devalue, unfortunately for us we cannot take advantage on the export side due to supply limitations, there is a lot more to this argument relative to elasticity of demand for the type of good being exported but that argument we can't even touch it yet as we can't even expand local supply production to meet increased demand anyway so devaluation is almost a waste of time.

The worse part of devaluation for jamaica is the import side where we have a high locked in propensity to consume exotic and not so exotic import goods, "p-tc-ig" I call it which as you may figure with devaluations makes imports more expensive and with out high jamaican style "ptcig" (think Bmw, Mercedes, smartphones, smart samsung TVA etc not to mention the black label whiskey, etc etc), that means we are locked in a increasingly negative formula of no real upside on exports and a wicked downside on imports as we are continually influenced even more by cable and internet, thus unleashing a stronger ptcig, so literally we spend more money/ our productive capacity every year to get a lesser amounts of the same import goods from the previous year or spend more money to get the same amount from the previous year so talk about being licked into a downward never ending spiral, this is it and constant devaluations make it worse.

Until we can cure the addiction to non jamaican items and build better local supply sources and production tied in with cheaper energy we are doa, improvement takes heavy duty non-political lifting.

[Don1]

Connecting the dots to diagram our Collective Failure

Stonigut;509237]Sass here is more to add to this story.

On the devaluation issue the real deal is we devalue theoretically so you can gain a short term advantage in export markets and push you foot further into the door of foreign markets and if you can source locally and there is room for supply source expansion which would have a strong multiplier effect on local suppliers sourcing locally, then devaluation is a wickedly great tool. As it means it give you a chance to compete against other sources in the hard fx country whose price remains static while you devalue, unfortunately for us we cannot take advantage on the export side due to supply limitations, there is a lot more to this argument relative to elasticity of demand for the type of good being exported but that argument we can't even touch it yet as we can't even expand local supply production to meet increased demand anyway so devaluation is almost a waste of time.

There are several factors which disable Jamaica from responding to devaluation by boosting local production and exports

* High production costs due to lack of scale, expensive energy & security
* Backward business class focused on easy profits via trading, rent, protected industry and govt handouts..There is negligible innovation from our so called capitalists
* Low labor productivity from mostly low skill workforce.. Expert at taxi driving,trinket selling & JEEP make-work. Low innovation & STEM capability

This picture needs to be changed drastically & post haste

The worse part of devaluation for jamaica is the import side where we have a high locked in propensity to consume exotic and not so exotic import goods, "p-tc-ig" I call it which as you may figure with devaluations makes imports more expensive and with out high jamaican style "ptcig" (think Bmw, Mercedes, smartphones, smart samsung TVA etc not to mention the black label whiskey, etc etc), that means we are locked in a increasingly negative formula of no real upside on exports and a wicked downside on imports as we are continually influenced even more by cable and internet, thus unleashing a stronger ptcig, so literally we spend more money/ our productive capacity every year to get a lesser amounts of the same import goods from the previous year or spend more money to get the same amount from the previous year so talk about being licked into a downward never ending spiral, this is it and constant devaluations make it worse.

Until we can cure the addiction to non jamaican items and build better local supply sources and production tied in with cheaper energy we are doa, improvement takes heavy duty non-political lifting.

Yes. Absolutely correct. But we must drill deeper to see the cause. You describe effects

These outcomes you list are a result of the destructive Babylon Media System we are trapped in and most worship blindly & unthinkingly.

People don't realize that this Media Shitstem is mentally corrosive to the point where Babylon achieves mind control over the majority of us through its Media.

This mind control is the source of our hankering after their products instead of developing the STEM skills to create even a few of our own.

Assimilating this media garbage results in Black people not even knowing what is in our best interest... much less ACTING in our best interest

Unnu tink is joke why mi bun out Babylon Media itinually????? It is not

Babylon media produces mostly garbage, propaganda & lies. Shunning the trash is fundamental to saving our sinking ship

Now afta dat dose of reality... back to unnu regularly scheduled Garbage & Propaganda

[Assasin]

Stony I have been on here talking about the negative effect of the Jamaican dollar on the economy for the last two years. Also the constant devaluation leads to instability and people who want to invest holding back the investment dollars. This also lead to more speculators as people holding until their dollars, more people converting their Jamaican reserves to US and more people trying to make money on the devaluation of the dollar.

I will try and find the post for you later when I have some time.

[Don1]

Stony I have been on here talking about the negative effect of the Jamaican dollar on the economy for the last two years. Also the constant devaluation leads to instability and people who want to invest holding back the investment dollars. This also lead to more speculators as people holding until their dollars, more people converting their Jamaican reserves to US and more people trying to make money on the devaluation of the dollar.

I will try and find the post for you later when I have some time.

WARNING

Don't return with your typically shallow analyses. You need to drill down deeper re the real cost/benefit analysis of policy choices. If you outline a policy path let's see not merely the possible benefits...but what the inevitable costs are and how they're to be managed.

Let's see those straight As at work

If you're critical of the devaluation path REQUIRED by the lender of last resort you should indicate the alternative policy steps to be taken and where external budget financing would come from. Indicate what funds you expect from sources which don't REQUIRE currency devaluation

Please don't mention the specious observation that "Audley stabilized the dollar". Discerning folks know where that led..i.e. a failed IMF agreement and harsher terms in the current one

[Stonigut]

Excellent points sah, I have been wanting to write something on the idea that the only think propping up jamaican culture is the rasta/Garvey connection without it we have no defense against the media onslaught and assault on minds of the young, Christianity also offers somewhat of a refuge as well however we see the Christian message also corrupted by the materialism of the world society in which it operates. Where I live there is an extremely famous preacher who has adherents in the multiple thousands locally and probably in the hundreds of thousands nationally and globally and his stance along with others like him is very strongly materialistic with no shame, openly flaunting wealth, which is so contrary to the Christ message, and it is this which is truly attacking the heart of Jamaican society and economy.

When you look at the Rasta economy sans the weeds (I don't support that at all, sorry X) is the perfect embodiment of the model that Jamaican needs, the food is strongly local, the clothes has a strong local component even if it is mostly on the labor side, the bobo brooms (them still make that) I think are local components, rasta economy also exports goods with a strong local component in the recording industry and the overall philosophy is non materialistic, spiritual, dig inside and do good for all, believe me rasta philosophy and Garvey philosophy did not just burst onto the scene but truly is/was a deep embodiment of Jamaican roots culture, we are losing that rapidly as you state above, soon we will be like the Bahamas, if we are lucky a little money but no original roots culture or more like Haiti no money and weak dissipated message for the soul and mind.

Funny thing is we are not far off, what we need is committed leadership that can take the initial outrage of shutting down non essential imports and focus on building out the local economy especially on the export side.

[Stonigut]

Yeah, devaluation to jamaica makes little sense in terms of positive impact, I can only think of one good impact is that it makes imports more expensive, problem is that doesn't means we consume less imports we get worse, we are like the crack junkie who will do anything to keep the supply coming so higher imports cost is actually a very negative thing as our consumption pattern stands and our current trade mode.

[Don1]

Excellent points sah, I have been wanting to write something on the idea that the only think propping up jamaican culture is the rasta/Garvey connection without it we have no defense against the media onslaught and assault on minds of the young, Christianity also offers somewhat of a refuge as well however we see the Christian message also corrupted by the materialism of the world society in which it operates. Where I live there is an extremely famous preacher who has adherents in the multiple thousands locally and probably in the hundreds of thousands nationally and globally and his stance along with others like him is very strongly materialistic with no shame, openly flaunting wealth, which is so contrary to the Christ message, and it is this which is truly attacking the heart of Jamaican society and economy.

When you look at the Rasta economy sans the weeds (I don't support that at all, sorry X) is the perfect embodiment of the model that Jamaican needs, the food is strongly local, the clothes has a strong local component even if it is mostly on the labor side, the bobo brooms (them still make that) I think are local components, rasta economy also exports goods with a strong local component in the recording industry and the overall philosophy is non materialistic, spiritual, dig inside and do good for all, believe me rasta philosophy and Garvey philosophy did not just burst onto the scene but truly is/was a deep embodiment of Jamaican roots culture, we are losing that rapidly as you state above, soon we will be like the Bahamas, if we are lucky a little money but no original roots culture or more like Haiti no money and weak dissipated message for the soul and mind.

Funny thing is we are not far off, what we need is committed leadership that can take the initial outrage of shutting down non essential imports and focus on building out the local economy especially on the export side.

Yep...agree on all....except weed. That needs a modern knowledge-based approach to extract value. Can't get away from the STEM focus can we?

Your Rasta analogy is outstanding. The Garvey influence on their self-help economic model is obvious. Rasta now needs to stress a transition to science or knowledge based development. They need to move up the value chain to create valuable products other than music....and own the IP

We will no progress without a STEM focus...period

[Assasin]

Go look something fi do man. You can talk to yourself in a miror, you get better results.

[Don1]

This is not good Sass.

It just confirms that you can't handle logical arguments.

You need a big intervention should you wish to turn that around

[Assasin]

No all your deep analysis starts and end with babylon with some the same message in between with a shouting Don1 been the only source. Low others make they make their silly points sometimes.