The Gateway Drug [Business Edition]
Day 653, 08:38
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Published in Ireland 
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by
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by Sean Power
Click on the image to view figures
All prices are gold rate equivilants of iep according to the exchange rate of the day
Over the period (9/8 - 3/9)
Food
33% average inflation
Weapons
20% average inflation
Gifts
32% inflation (in q1 market)
Moving Tickets
52% inflation
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Manufacturing average : 30% increase
The fact that the average increase corresponds to the increase in the value of IEP suggests the manufacturing industry has not adapted to the changed economic environment caused by the appreciation of the IEP.
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Only drop in price : Award goes to Q3 weapons with a 12% drop
Smallest increase in price: Congrats to Q2 food for its comparatively miniscule 8% increase
Largest increase in price : Doh, with an increase in IEP price even tho the IEP is now more valueable this award goes to the Q5 food market with an increase of an astounding 66%
Note: The value of wages that stayed numberically the same throughout the appreciation period increased generally in proportion to the increase in prices. This means the standard of living will have remained at generally the same level despite the increase in the gold prices of products.
The monetary market influencing prices
Right so there's the raw data. Prices for every manfuctured product (except q3 weapons) have gone up in terms of their price in gold since last month. This is probably due to the IEP appreciating in value against gold from approx 1gol
😛75iep one month ago to our current monetary market rate of approx 1gol
😛50iep. This means that 1iep is now worth a 1/3 more than it was a month ago. Which is great for anyone who was hoarding IEP!
A capable and willing Minister of Finance
I believe the intention of the Minister of Finance is to benchmark the IEP at the current 1G:50IEP ratio.. Provided this is done then wages which existed at the previous gold rate will need to be cut to bring them into line with the new value of the IEP. This is important for our competativeness internationally. But wages can't possibily be cut when prices are inflated like this.
Reasons for appreciation of IEP
Unfortunately the Minister for Finance did not have access to the Taoiseach's Org and so was incapable of intervening in the monetary market to stabilise the IEP:Gold rate. This is a Minister who accepts market intervention as a tool to tweak the rate and I commend him on that and implore that this be done as soon as possible.
Competition
It has been mentioned in the Dáil that increases to importation taxes are required to keep domestic products competitive. But if we are to retain any competitiveness abroad we must concentrate on lowering the prices of our domestic goods. We can and should compete with the foreign importers. Domestic manfacturing already has a safety net of 40% which is added to all imported manufactured products. How is it possible that we cannot compete when they must reduce their price to approx 70% of our prices just to arrive at a post-tax price that is close to ours.
Our prices being too high allows the foreign market to undercut irish prices as they stand now. An increase in import tax would just shield us in the short term from the adjustment that is necessary to ensure our competitiveness. If we lower prices to their gold equivilant from the price available a month ago, then importers of goods will find it much harder to compete. But we do want to ensure some competition.... that is what will bring the prices down. The increasing of the importation tax would be an anti-competitive measure which will not benefit us in the long run. It will help maintain these inflated prices for manufactured goods.
The whole economy needs a standard of living adjustment!
Click image to view enlarged graph
Thank you to http://ereptools.net
Based on gold rates of:
(9/8/09) 1 iep = .016
(3/9/09) 1 iep = .022
Seán Power
TD for the SouthEast
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Comments
nice work 😃
voted
thanks vesty.... looks abit of a mess but sure it'll do
nice work
subed and voted, well done.
Nice work. We need more indigenous companies to force competition from within. Subed + voted
Good work man ,,,
Question though , and not directed at you sean, but to all
How come it has taken this long for this topic to come up in public ?
And i see the proposals in public dail and agree with sean, i dont think the min wage or other wages should drop till product prices come down
brilliant. really impressed. voted.
one of the problems with the high iep/gold rate is that companies can't sell overseas as the money they get converted back to iep wouldn't cover costs if they tried to sell at the market price overseas - so irish exports are screwed.
Its a chicken & egg situation, cut wages to cut costs & reduce price, but no one wants to work for less money with todays prices.
Unfortunately, for our overseas competition the high gold rate allows them to sell for less here and still get good money when they convert IEP back to there own money.
We can't sustain the current level of wages with the current gold/iep rate, no one wants wage cuts, so to stop that we have to protect irish companies, providing irish employment until we get the rate sorted again, (we've 58% unemployment just now), thats why the import tax increase is proposed as a temp measure till its sorted, then we start to adjust prices/wages in line with true costs.
It won't happen overnight, but it will happen.
Cut the wages, I'll work for less.
Christina speaks sense. A former employer of mine, a solid employer in the Q3 Irish Weapons trade, sold up; for many of the reasons Nog outlines. He still runs successful businesses in other countries.
It won't happen overnight, she's right.
If you want eIrish jobs we need to get exporting, that mean competitive companies.