I'm sorry tom66, but that assumption is so dead wrong it's not even funny. Things cost a certain dollar value in materials and labor to make, that has NOTHING to do with the price a company will charge for it's products.

EVERY company every person that touches a product, ever material that goes into it costs something, but raw material cost can be figured, labor and engineering costs can't be so directly accounted for, and the company has to work profit in someplace.

 

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I'm sorry tom66, but that assumption is so dead wrong it's not even funny. Things cost a certain dollar value in materials and labor to make, that has NOTHING to do with the price a company will charge for it's products.

EVERY company every person that touches a product, ever material that goes into it costs something, but raw material cost can be figured, labor and engineering costs can't be so directly accounted for, and the company has to work profit in someplace.

Hey, hey... I wasn't saying it was correct, I was asking if it were correct.... don't scorn me.

Of course it has nothing to do with profit margins; okay, let me rephrase.

I mean, if you buy a TV for £400... the company might figure something like 10-20% profit margin, as may the retailer, but given the actual cost price of the TV to the manufacturer, you can break it down into the individual components, maybe the SMT resistors on the main board, £0.001 each, but the money has to go somewhere. Maybe some of it goes to the carbon/metal refineries, some of it goes to the precision laser trimmer manufacturer for trimming the resistors, some of it goes to the laser etching machine, some of it goes to electricity to run all of these devices... and the energy came from a power plant which might burn coal... somebody had to dig the coal up (probably using fuel powered machinery)... and someone got paid to do that. Each company may pay employees a certain labour amount; profit for each company gets divided between shareholders or the employees or someone else (depending on the arrangement of such); although, a return to a shareholder is just like a "wage" to them.

 

Again though, I can speak from experience it's absolutely false.
For a given product of approximately equal material/labor costs at my work I've seen as much as 300% discrepancy in price between customers. Some within different branches of the same company for the SAME EXACT part. The left hand doesn't know what the right hand is doing.

Why does no one notice this? The balance sheets make sense at the end of the month and the cost per unit is only a few cents different... The corporate universe is almost totally oblivious to reality, especially on a large scale.

 

Again though, I can speak from experience it's absolutely false.
For a given product of approximately equal material/labor costs at my work I've seen as much as 300% discrepancy in price between customers. Some within different branches of the same company for the SAME EXACT part. The left hand doesn't know what the right hand is doing.

Why does no one notice this? The balance sheets make sense at the end of the month and the cost per unit is only a few cents different... The corporate universe is almost totally oblivious to reality, especially on a large scale.

Hmm, you're not making much sense. It doesn't really matter what a company sells it as. It's as simple as this - is money work done, or is it actually gold, as our (in the UK, but in most other countries too) currency is backed by it? In which case, why is gold actually valuable? Sure it's useful in some electronics, and some other applications, but uses don't really justify the cost, compared to other metals. It's just pretty, shiny metal.

I'm taking Economics GCSE, so I may ask my Economics teacher about this.

 

The worth of "something" is perceived. Supply and demand. For example; "Beany Babies" were a hot commodity a few years ago when demand greatly exceeded supply. Now you can't give them away. People flock to gold based not on what it is worth for industrial purposes, but it's perceived value as compared to some currency. When the demand for some object drops, or is being met, the leanest producer will come out ahead.

 

When I was a Machine Maintenance tech for Alcatel I would save quite a bit of money going outside the company that made the appliance to find the exact same part from the manufacturer, or some other retailer the manufacturer sold to. Tack on "clean room rated" and the parts price went up 300% or more.

Perceived value is much of what we pay for. It doesn't help that every middle man gets a healthy cut (percentage), this boosts the price considerably. The fewer middle men, then cheaper the product.

 

So shareholders makes a wage "living" off of workers and products like
electricity. So we need power at any expense and the shareholder make
a profit that build in,you just need a couple of million dollars to make that work.
Then a long come the stock broker for his share.The venture capitalist group
has to have there share.The top 1 % enjoy there gains on paper,until they need cash.
The brokers have to secure the release of these funds at a %.

This is where the global economy come in,the so called off shore money.
Large firms have a military type security force to protect there brokers
and entrance to there headquarters. You are not allowed to have your own
army,but the top 1% is. Having a free voice cost you, you turn off the power
you don't have your computer any more,energy is fuel to bike to the library
where you can use a computer,so there. Enjoy freedom.

 

Money does not equal work done per se.

The guy who built the ATM machine and coded the software... his work(labor) has been done for quite a while.

And money is continually made by these machines.

The transactions that cost money, regardless of human labor, still affect the economics.


A company may pay you $1000 to write a piece of software.

The labor is now paid for.

That software can run, and bring money into that company with no care for labor costs.

When dealing with sweat-shops and the such, many companies dont even consider labor costs. They consider it like "paper goods".

It is the cost of doing business.

If labor goes up, prices go up. So the ratio stays the same.

 

You forget about the cost of the software crashing,there a cost
to keep the software running. This is a great debate,maybe it will
help us in life.

 

So shareholders makes a wage "living" off of workers and products like
electricity. So we need power at any expense and the shareholder make
a profit that build in,you just need a couple of million dollars to make that work.
Then a long come the stock broker for his share.The venture capitalist group
has to have there share.The top 1 % enjoy there gains on paper,until they need cash.
The brokers have to secure the release of these funds at a %.

This is where the global economy come in,the so called off shore money.
Large firms have a military type security force to protect there brokers
and entrance to there headquarters. You are not allowed to have your own
army,but the top 1% is. Having a free voice cost you, you turn off the power
you don't have your computer any more,energy is fuel to bike to the library
where you can use a computer,so there. Enjoy freedom.

I tend to share loosewires here espcialy in Australia

 

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This is an explanation of how we can be in debt, especially the section on money multiplier.
We also borrow money from the future by goverments issuing bonds .
It surprises me that the system doesen't go into meltdown more often.
http://en.wikipedia.org/wiki/Money_creation

 

max it's amazing? It wasn't an option, it was required to exchange gold for paper money on penalty of 10,000 dollar fine or 10 years in prison.

http://en.wikipedia.org/wiki/Executive_Order_6102

I don't know how the current laws stand but most people don't horde bullion anyways. There are probably treasury restrictions on trying to turn any large some of paper money into gold bullion.

 

Exactly, If the public really grasped the "creation of money", and the banks little ponzi scheme of having assets on their books that don't even exist yet, They might start burying money in their backyards. When the housing market fell, that all started to unravel....

I wonder if the FDIC really stands a chance of backing the depositors when it starts going south? Or are their assets "created" as well???

 

No if things start going south no one currently has enough 'real' material to back up the current amount of paper money that exists. But it would be a disaster for other countries and internally if anyone every said 'pay up'

It would take some pretty decent turmoil to upset the system to the point where it would come to something like that though, could happen in 5 minutes or 5000 years. Some kind of change will invariably occur that will change the current system though, who what where when and why is probably the biggest speculation game you could play and everyone thinks their own theories are correct.

 

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Yeah, but when is it going to occur? It's a bubble, at some point it has to pop. There are no metrics for this kind of thing, it's impossible to accurately predict when it will occur, just that it will, at some point in the future if things don't change.

Things will always change, to either increase or decrease the incipient doom.

 

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Municipalities are just beginning to hit crises mode with some defaulting on their pension obligations. The economic circle of life has turned into a bathtub with the drain open. Kenesian economics worked in the past because you could create false demand and the resulting trickle down effect created expansion in all facets of the economy. Now the government allows outsourcing to the degree that there are not enough US jobs to maintain the revenue stream for the government to function at it's current rate of spending. This is going to cause more unemployment and the spiral downward continues... Giving stimulus to a bank is like giving the fox the keys to the henhouse. They( along with the illustrious Barney Frank) could have prevented this bubble and save the government trillions...