Quote:
Originally Posted by Bladewire
Greek central bank has a currency press outside Athens  |
well - if they can or not does not matter.
in this case they canīt because this currency press could only be used if they step back to the drachme (what would kill their economy completely).
the basic point on values is productivity and productivity is a mix of things what are done on the most economic way.
so if britain i.e. can produce a totally wonderful machine - 50-70% of this this machine parts are done offshore because they can be produced with the same quality but on lower costs.
if the same parts would be produced IN UK the machine would not be better but MUCH MORE expensive.
so now letīs say this machine is for a hospital and costs instead 50.000 pound now 100.000. and to produce it for that selling price the company have to produce 1000 of this machines.
what happens next?
1. as the rest of the world can buy this machine for 50.000 somewhere else - they will NOT buy it from britain.
2. british hospitals will not buy 1000 machines because they need only 100
3. to produce only 100 machines will lead to the following results:
a. the machine will NOT be produced and the british hospitals have to IMPORT IT
or
b. the company will produce 100 machines but now they will cost 250.000
the 100 machines are sold to british hospitals and the health costs will INCREASE DRAMATICLY.
this is what happens in paulīs world.