h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Aah. I see what you mean now. 'Cheap money' tends to mean low interest rates.

What you're describing sounds like markets going from monopoly/oligopoly (ie where firms have power over the market) to a more competitive market. This, in theory *and* in practice does generally lead to more goods at lower prices. Books are an excellent example, aviation showed the same trend once the low-cost carriers sprang up.

I suppose it'll depend on whether firms start losing money. I don't think a stock market slump is *exactly* what the economy needs at the moment. It's always a case of swings and roundabouts, given that the firms most people work for are the ones which most people (directly or through other firms) buy from.

Given that the UK is the most pro-market country in the EU, makes you wonder what the rest of Europe is like?

Novo, I see where you're coming from.

I have a friend who works for PWC and the junketts he gets to go on would make your hair curl especially when you consider that some of their profits come from auditing, accountancy and consultation work the do for government departments.

However businesses have very different overheads.


Hotels sometimes make a loss on room charges simply because its better to recoup half your costs than it is to make no money at all when they cant charge their normal full rate.

If you run a shop a bought px or £5 and sold it at £20 leaving you with £10 proit ater overheads this is great, but after christmas you are selling no px you have still spent £5 and still have overheads of £5 per hour or staf and other costs.

In this scenario it makes sense to sell px at a loss price of £7.50 because if you didint you wouldnt be making any money at all.

Its wrong to assume that sale prices are prices where the retailer or spplier could continue to operate indefinately.

My claim on the banks in also in the queue - so thanks Kelli and VIP but the banks seriously expect to win the court case and are carrying on regardless. I have no time for the scum and now use cash whenever I can.

However - I can't have my salary paid in cash, my mortgage company won't take cash (Northern Rock)

Wasn't there some legislation about books which meant they had to be sold at their cover price and could not be discounted ?

Tesco, I was once told, make more money on the land they own than on selling stuff.

Hi Blicky,

I accept your last sentence, but I have been trying to give examples to show that the consumer has been charged excessive prices in the boom years, and have given a few examples.

I am not trying to say that retail outlets shouldn't make a profit, but there is a level where an indecent profit taking has been ongoing. It doesn't only apply to retailers of course, other suppliers of goods and services have been happily making hay...

I merely argue that everything has a 'right' price (value), and that the slowdown in the economy might bring prices back to the 'right' level as opposed to those we have been paying.

Novo

Well to get the market you want then you would probably need to centralised price structure controlled by a government department with legal powers to keep prices in a certain band to stop any single business making too much mark up or pricig others out of the market then mopping up when they had acheived a monoply.

Communism.

I knew you would come round to my way of thinking in the end Novo.

one love

Well who'd have thought it?

Novo

Wages are not directly controlled by skills or effort, and prices are not directly controlled by costs or quality. Supply & demand rules.

And supply & demand leaves some strange results. I'm sure the economy could do perfectly well, and the world would in fact be a better, happier place, without any advertising whatsoever.

"Well to get the market you want then you would probably need to centralised price structure controlled by a government department with legal powers to keep prices in a certain band to stop any single business making too much mark up or pricig others out of the market then mopping up when they had acheived a monoply.

Communism."

Er, no. Communism entails a completely planned economy and no private business at all. What you have described is market regulation, which is carried out to varying extents in all capitalist economies (largely to prevent monopolisation of business or crisis' of the 1929 variety, both of which are a constant threat in a completely unregulated marketplace).

Then of course we have little beauties like the Peugeot case.

The EEC give grants to build a factory in Poland so that they can close a factory in England where workers are more expensive.

We pay to export our manyfacturing base - how nice of us.

Or the banks - close call centres in England and move them to India - because they're better ? No because they are cheaper ! How long before we start using slaves because they are really cheap ?

Don't say it won't happen - are the children in far east sweat shops any better off than slaves ?

WOOOOOOOO !

Phase 1 through - I know they'll appeal, but its a start.

http://news.bbc.co.uk/1/hi/business/7364422.stm

And this reflects my opinion on our financial crisis pretty accurately.

http://www.thedailymash.co.uk/news/business/darling-tells-idiots-to-help-themselves-20080421889/