Imports, Exports, and Exchange Rates: Crash Course Economics #15
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Date: 2022-04-04
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Comments and reviews: 10
lolliz100
So when a currency has grown stronger than another. it is now capable of purchasing more from that country (importing) because it is cheaper to do so. So they increase their imports because it's further cheaper to do so. Yet. When a country imports. it has to change its currency to the other country currency. Which makes that nations currency more in demand. Which increases that country's currency. An example of where a fundamental concept can have a different effect of what the textbook expectations describe.
Another example is that when interest rates rise. The textbook of economics says that it increases the value of the currency as external investors are attracted to the higher interest rates for investing in that economy banking system. hence investing in that country's currency (raising the value. But at the same time. a high interest rate also dictates a deterent for nationals to borrow capital to spend more, hence the economy slows. A slowdown gives rise to a Not very productive economy which lowers the country's currency value. So the issue becomes if the amount of external investment into the system to benefit from the high interest rates is way more above the effects of the slowed economy. So in essence its not law that higher interest rates is a precursor to higher currency value. And why would an investor try to invest in the financial tools of an economy because of a high interest rate if a high interest rate means not much persons are borrowing from the financial institutions for the institutions to make back that high interest and then to be able to pay its investors. Economics is very double sided. The effects of the indicators which dictates the value of a currency is very vague and uncertain. Its as if everything u learn makes sense and at the same time does not make sense as it's not necessarily in line with what the fundamentals are. And that's just a tiny fragment of the various indicators. Put that into context of assessing ALL the indicators of trading currency pair in the fickled nature of things where u can't even use economics to guide u as the fundamentals may or may not apply. An we can see why it's difficult to trade. You tend to give up on the sense of what the economics supposed to relay and strictly start following charts to identify patterns as a pattern is more sensible to track than the double sided effects of economic fundamentals. If anyone has a resolve or opinion on this please share.
reply
So when a currency has grown stronger than another. it is now capable of purchasing more from that country (importing) because it is cheaper to do so. So they increase their imports because it's further cheaper to do so. Yet. When a country imports. it has to change its currency to the other country currency. Which makes that nations currency more in demand. Which increases that country's currency. An example of where a fundamental concept can have a different effect of what the textbook expectations describe.
Another example is that when interest rates rise. The textbook of economics says that it increases the value of the currency as external investors are attracted to the higher interest rates for investing in that economy banking system. hence investing in that country's currency (raising the value. But at the same time. a high interest rate also dictates a deterent for nationals to borrow capital to spend more, hence the economy slows. A slowdown gives rise to a Not very productive economy which lowers the country's currency value. So the issue becomes if the amount of external investment into the system to benefit from the high interest rates is way more above the effects of the slowed economy. So in essence its not law that higher interest rates is a precursor to higher currency value. And why would an investor try to invest in the financial tools of an economy because of a high interest rate if a high interest rate means not much persons are borrowing from the financial institutions for the institutions to make back that high interest and then to be able to pay its investors. Economics is very double sided. The effects of the indicators which dictates the value of a currency is very vague and uncertain. Its as if everything u learn makes sense and at the same time does not make sense as it's not necessarily in line with what the fundamentals are. And that's just a tiny fragment of the various indicators. Put that into context of assessing ALL the indicators of trading currency pair in the fickled nature of things where u can't even use economics to guide u as the fundamentals may or may not apply. An we can see why it's difficult to trade. You tend to give up on the sense of what the economics supposed to relay and strictly start following charts to identify patterns as a pattern is more sensible to track than the double sided effects of economic fundamentals. If anyone has a resolve or opinion on this please share.
reply
Kirill
May somebody explain about trade deficit, it seems like quite bad idea to keep it, as you import a lot of goods running trade deficit and then you sell big share of some technological companies, where Chinese might get higher and higher stake and at some point can have control over US companies. Is in it bad? Looks like if it continues then at some point there will be nothing to sell. While Chinese long ago is not a country which sells just cheap stuff, there is a shift from made in China to Design in China. I would really appreciate your comments.
reply
May somebody explain about trade deficit, it seems like quite bad idea to keep it, as you import a lot of goods running trade deficit and then you sell big share of some technological companies, where Chinese might get higher and higher stake and at some point can have control over US companies. Is in it bad? Looks like if it continues then at some point there will be nothing to sell. While Chinese long ago is not a country which sells just cheap stuff, there is a shift from made in China to Design in China. I would really appreciate your comments.
reply
education
Have tried several times to trade independently and it's has ended blowing up at my face. I had to settle down and read more about the Forex market after that I think tried investing again and lost greatly. I appreciate all out there who educate other on how to trade and invest in the Forex market with the help of Mr Silverster Wilfred, I would have been lost so much. He educated me and when I was not getting it, he helped me earn a good profit that restored my initial losses and has been my knight in shining armour ever since-.
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Have tried several times to trade independently and it's has ended blowing up at my face. I had to settle down and read more about the Forex market after that I think tried investing again and lost greatly. I appreciate all out there who educate other on how to trade and invest in the Forex market with the help of Mr Silverster Wilfred, I would have been lost so much. He educated me and when I was not getting it, he helped me earn a good profit that restored my initial losses and has been my knight in shining armour ever since-.
reply
Jo-o
Can someone further explain the comment at minute: 8: 38.
-When the US spends money in Chinese Goods the people in China, in theory, have only two things they can do with that money:
They can buy U. S. goods or they can buy U. S. financial assets, like stocks and bonds.
Why is that? Why can't they spend the money elsewhere?
Thanks and Best regards,
Joao
reply
Can someone further explain the comment at minute: 8: 38.
-When the US spends money in Chinese Goods the people in China, in theory, have only two things they can do with that money:
They can buy U. S. goods or they can buy U. S. financial assets, like stocks and bonds.
Why is that? Why can't they spend the money elsewhere?
Thanks and Best regards,
Joao
reply
Robert
Credible video guys can't help but to add that the market is really yielding profit and investors are seizing opportunities to improve their trade. unlike anyone else, i invest and make profit from forex monthly and it keeps coming thanks to Mr Ray Perkins advisories guide to become a successful trader
reply
Credible video guys can't help but to add that the market is really yielding profit and investors are seizing opportunities to improve their trade. unlike anyone else, i invest and make profit from forex monthly and it keeps coming thanks to Mr Ray Perkins advisories guide to become a successful trader
reply
Luigi
I have a question: does exports/imports between European countries has the same impact? For example, if Germany is a net exporter to Italy, does current account and financial account balance out? Would Germany buy Italian assets or that doesn't count because we share the same currency?
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I have a question: does exports/imports between European countries has the same impact? For example, if Germany is a net exporter to Italy, does current account and financial account balance out? Would Germany buy Italian assets or that doesn't count because we share the same currency?
reply
Crinosis
If I understood right, the benefits of currency depreciation has a limited effect until currency appreciation happens. Thus it is a back and forth game of manufacturing, unless a country manipulates its currency to keep it depreciated and maintain the upper hand in exports.
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If I understood right, the benefits of currency depreciation has a limited effect until currency appreciation happens. Thus it is a back and forth game of manufacturing, unless a country manipulates its currency to keep it depreciated and maintain the upper hand in exports.
reply
Brooke
Videos are very informative! But can you please slow down when talking! Some of us are having to do assignments based off these videos. There is no way a 23 question assignment should be covered by a ten minute video. Please slow down.
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Videos are very informative! But can you please slow down when talking! Some of us are having to do assignments based off these videos. There is no way a 23 question assignment should be covered by a ten minute video. Please slow down.
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isaac
Bruh bruh bruh bruh bruh, if you are china and export to the us for us dollars, how do you make money, didn't stick in my head so if anyone could explain that would be great
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Bruh bruh bruh bruh bruh, if you are china and export to the us for us dollars, how do you make money, didn't stick in my head so if anyone could explain that would be great
reply
steven
9: 18 trade is about winners and looser-s? Trade isent about two countries coming together in a MUTUAL agreement? Im looking forward to a reply.
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9: 18 trade is about winners and looser-s? Trade isent about two countries coming together in a MUTUAL agreement? Im looking forward to a reply.
reply
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