Brexit effect on hardware prices?
- Thread starter Flex
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Flex
Will lift for boobs!
Weaker than what it was yesterday. Was on its way down again. Was 14.50 +- before the vote
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Which is similar movement to what we saw just two weeks ago, when it went between 14.67 and 15.26. My point is just that this is still completely within the realms of normal fluctuations, certainly not a crash, and definitely nothing compared to the damage Zuma did by firing Nene.
Flex
Will lift for boobs!
Yes yes true. The thing is Zuma and his antics have a direct impact on South Africa. This will not so much have a direct impact immediate impact. But I think we will start to notice it bit by bit if things are not stabilized soon
DieGrootHammer
Daddy TK
Due to me being in classes, I missed my chance to be in the thick of this conversation, but let me share my opinions:
Everyone, firstly, calm the hell down. Brexit is not going to cause an immediate economic recession in any country at the moment.
Now for the long reason. Imagine investors are all little frightened deer, frolicking and eating/investing in all the different green pastures all over the forest. As with deer, they always want to be in the greenest of field eating the freshest of grass and plants. What Brexit was, was a gunshot in the vicinity of the UK grass area, and all the little investor deers got spooked and ran for fields they know to be safer. They've heard that there is a bear and a lion running around the South African market fields, so they stayed clear of that. They looked at the USA field, and saw it to be vast and open, not that green, but much safer than this UK place. And some deers looked at the Japanese field and saw all the green grass, the cool bright blue pool of water, and immediately retreated to there.
But deer always moves, and gets tired of staying in the same field for too ling. They know if they stay where they are, predators will realize where to go to hunt, thus they move from grass patch to grass patch. They are well as truly spooked about that gunshot in the UK field, but will cautiously start moving back in later stages. If they find the field to be okay, or ever more greener, well then more deer would flock back making the UK grass patch the bell-of-the-ball again.
I know elaborate metaphor is elaborate, but it conveys the happenings of the global world of investment at the moment. The UK is a place full of uncertainty and volatility. A place not all investors would want to be right about now. Global uncertainty is also not helping. All this causes people to get spooked and run to other more stable economies. Which is why the Pound got a (pun intended) pounding, and dollar and the yen got stronger, and SA got hit hard by the announcement. But here's the catch, The SA economy isn't worst off than it was merely few months ago. In fact, Brexit had a much lesser effect of our economy on the short term than the Nene-gate episode. Nene-gate brought us to the brink to junk status; Brexit merely made our currency fluctuate. We've seen worse in other words
But, the uncertainty comes in now that Britain will leave the EU, and people don't know what they will do with all their trading agreements and relationships. Under EU law, taxation, import-export duties and other law related trading stuff was all clearly stipulated and ironed out, making the trade with any EU country very transparent. Now that Britain will leave the EU means we simply don't know what they will do with their trade agreements? What type of taxation will be levied? What other laws will be implemented. We simply don't know. The UK is in a position to rewrite many of their laws and either make trading easier or more difficult, but time will only tell which one they do. Until then, don't expect anything to change. The only price changes that will happen would be inflation related. It the UK is smart, they would not rock the proverbial boat of international trading right now, because people are already scared of long-term investment, so rather keeps things the same right now and work on investor confidence. Bring the money back into the country first and then change things up.
Speaking of change, did you know that a country can be both in the EU and out of the EU at the same time? The EU is a horribly complicated agreement among so many countries that almost each one has a unique involvement ratio with EU law. It's all way too complicated for me to express here, but my point is the following: Britain can remove themselves from the EU in certain parts while remaining part of it in other areas. A vote of leave may only be focused on Immigration and Taxation, but Trade and Borders they may still be part. Or they may even leave that all together, but have open borders. See, there are so many permutations of an EU agreement that we simply don't know what "leave it" means right now. At the moment Britain will negotiate with the EU the terms of their break-up, and as will all break-ups, some things will be given to both parties.
What about Scotland? Scotland wants to secede from the crown and get their independence, just so that they may be part of the EU again. Well, civil unrest is to be expected from a change of this magnitude, and it will cause even more volatility in the UK economy. I believe if this would happen, THEN you would see the pound lose a shit ton of value, everyone is going to start spelling it "ton" in stead of "tonne" and it would have a major effect of the global economic structure.
Now, getting back to the point: Would hardware parts be effected by the sudden Brexit? In the short term, no. In the long run, we simply cannot say. We simply cannot say how the UK will handle it new economic independence, and it is premature to call it either way right now. Unfortunately the words "uncertain" or "can't say right now" aren't sexy enough for the media, so they would much rather paint a picture of doom and gloom rather that the real message. Britain cause a massive shot to go off, now lets see how the deer react to their new grazing agreements....
TL
R - no effect right now, can't say for certain in the future. Inflation will be more of a bitch
Everyone, firstly, calm the hell down. Brexit is not going to cause an immediate economic recession in any country at the moment.
Now for the long reason. Imagine investors are all little frightened deer, frolicking and eating/investing in all the different green pastures all over the forest. As with deer, they always want to be in the greenest of field eating the freshest of grass and plants. What Brexit was, was a gunshot in the vicinity of the UK grass area, and all the little investor deers got spooked and ran for fields they know to be safer. They've heard that there is a bear and a lion running around the South African market fields, so they stayed clear of that. They looked at the USA field, and saw it to be vast and open, not that green, but much safer than this UK place. And some deers looked at the Japanese field and saw all the green grass, the cool bright blue pool of water, and immediately retreated to there.
But deer always moves, and gets tired of staying in the same field for too ling. They know if they stay where they are, predators will realize where to go to hunt, thus they move from grass patch to grass patch. They are well as truly spooked about that gunshot in the UK field, but will cautiously start moving back in later stages. If they find the field to be okay, or ever more greener, well then more deer would flock back making the UK grass patch the bell-of-the-ball again.
I know elaborate metaphor is elaborate, but it conveys the happenings of the global world of investment at the moment. The UK is a place full of uncertainty and volatility. A place not all investors would want to be right about now. Global uncertainty is also not helping. All this causes people to get spooked and run to other more stable economies. Which is why the Pound got a (pun intended) pounding, and dollar and the yen got stronger, and SA got hit hard by the announcement. But here's the catch, The SA economy isn't worst off than it was merely few months ago. In fact, Brexit had a much lesser effect of our economy on the short term than the Nene-gate episode. Nene-gate brought us to the brink to junk status; Brexit merely made our currency fluctuate. We've seen worse in other words
But, the uncertainty comes in now that Britain will leave the EU, and people don't know what they will do with all their trading agreements and relationships. Under EU law, taxation, import-export duties and other law related trading stuff was all clearly stipulated and ironed out, making the trade with any EU country very transparent. Now that Britain will leave the EU means we simply don't know what they will do with their trade agreements? What type of taxation will be levied? What other laws will be implemented. We simply don't know. The UK is in a position to rewrite many of their laws and either make trading easier or more difficult, but time will only tell which one they do. Until then, don't expect anything to change. The only price changes that will happen would be inflation related. It the UK is smart, they would not rock the proverbial boat of international trading right now, because people are already scared of long-term investment, so rather keeps things the same right now and work on investor confidence. Bring the money back into the country first and then change things up.
Speaking of change, did you know that a country can be both in the EU and out of the EU at the same time? The EU is a horribly complicated agreement among so many countries that almost each one has a unique involvement ratio with EU law. It's all way too complicated for me to express here, but my point is the following: Britain can remove themselves from the EU in certain parts while remaining part of it in other areas. A vote of leave may only be focused on Immigration and Taxation, but Trade and Borders they may still be part. Or they may even leave that all together, but have open borders. See, there are so many permutations of an EU agreement that we simply don't know what "leave it" means right now. At the moment Britain will negotiate with the EU the terms of their break-up, and as will all break-ups, some things will be given to both parties.
What about Scotland? Scotland wants to secede from the crown and get their independence, just so that they may be part of the EU again. Well, civil unrest is to be expected from a change of this magnitude, and it will cause even more volatility in the UK economy. I believe if this would happen, THEN you would see the pound lose a shit ton of value, everyone is going to start spelling it "ton" in stead of "tonne" and it would have a major effect of the global economic structure.
Now, getting back to the point: Would hardware parts be effected by the sudden Brexit? In the short term, no. In the long run, we simply cannot say. We simply cannot say how the UK will handle it new economic independence, and it is premature to call it either way right now. Unfortunately the words "uncertain" or "can't say right now" aren't sexy enough for the media, so they would much rather paint a picture of doom and gloom rather that the real message. Britain cause a massive shot to go off, now lets see how the deer react to their new grazing agreements....
TL
R - no effect right now, can't say for certain in the future. Inflation will be more of a bitch
Weasley
New member
Due to me being in classes, I missed my chance to be in the thick of this conversation, but let me share my opinions:
Everyone, firstly, calm the hell down. Brexit is not going to cause an immediate economic recession in any country at the moment.
Now for the long reason. Imagine investors are all little frightened deer, frolicking and eating/investing in all the different green pastures all over the forest. As with deer, they always want to be in the greenest of field eating the freshest of grass and plants. What Brexit was, was a gunshot in the vicinity of the UK grass area, and all the little investor deers got spooked and ran for fields they know to be safer. They've heard that there is a bear and a lion running around the South African market fields, so they stayed clear of that. They looked at the USA field, and saw it to be vast and open, not that green, but much safer than this UK place. And some deers looked at the Japanese field and saw all the green grass, the cool bright blue pool of water, and immediately retreated to there.
But deer always moves, and gets tired of staying in the same field for too ling. They know if they stay where they are, predators will realize where to go to hunt, thus they move from grass patch to grass patch. They are well as truly spooked about that gunshot in the UK field, but will cautiously start moving back in later stages. If they find the field to be okay, or ever more greener, well then more deer would flock back making the UK grass patch the bell-of-the-ball again.
I know elaborate metaphor is elaborate, but it conveys the happenings of the global world of investment at the moment. The UK is a place full of uncertainty and volatility. A place not all investors would want to be right about now. Global uncertainty is also not helping. All this causes people to get spooked and run to other more stable economies. Which is why the Pound got a (pun intended) pounding, and dollar and the yen got stronger, and SA got hit hard by the announcement. But here's the catch, The SA economy isn't worst off than it was merely few months ago. In fact, Brexit had a much lesser effect of our economy on the short term than the Nene-gate episode. Nene-gate brought us to the brink to junk status; Brexit merely made our currency fluctuate. We've seen worse in other words
But, the uncertainty comes in now that Britain will leave the EU, and people don't know what they will do with all their trading agreements and relationships. Under EU law, taxation, import-export duties and other law related trading stuff was all clearly stipulated and ironed out, making the trade with any EU country very transparent. Now that Britain will leave the EU means we simply don't know what they will do with their trade agreements? What type of taxation will be levied? What other laws will be implemented. We simply don't know. The UK is in a position to rewrite many of their laws and either make trading easier or more difficult, but time will only tell which one they do. Until then, don't expect anything to change. The only price changes that will happen would be inflation related. It the UK is smart, they would not rock the proverbial boat of international trading right now, because people are already scared of long-term investment, so rather keeps things the same right now and work on investor confidence. Bring the money back into the country first and then change things up.
Speaking of change, did you know that a country can be both in the EU and out of the EU at the same time? The EU is a horribly complicated agreement among so many countries that almost each one has a unique involvement ratio with EU law. It's all way too complicated for me to express here, but my point is the following: Britain can remove themselves from the EU in certain parts while remaining part of it in other areas. A vote of leave may only be focused on Immigration and Taxation, but Trade and Borders they may still be part. Or they may even leave that all together, but have open borders. See, there are so many permutations of an EU agreement that we simply don't know what "leave it" means right now. At the moment Britain will negotiate with the EU the terms of their break-up, and as will all break-ups, some things will be given to both parties.
What about Scotland? Scotland wants to secede from the crown and get their independence, just so that they may be part of the EU again. Well, civil unrest is to be expected from a change of this magnitude, and it will cause even more volatility in the UK economy. I believe if this would happen, THEN you would see the pound lose a shit ton of value, everyone is going to start spelling it "ton" in stead of "tonne" and it would have a major effect of the global economic structure.
Now, getting back to the point: Would hardware parts be effected by the sudden Brexit? In the short term, no. In the long run, we simply cannot say. We simply cannot say how the UK will handle it new economic independence, and it is premature to call it either way right now. Unfortunately the words "uncertain" or "can't say right now" aren't sexy enough for the media, so they would much rather paint a picture of doom and gloom rather that the real message. Britain cause a massive shot to go off, now lets see how the deer react to their new grazing agreements....
TL
Loved how you explained it
wish i could rep
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New member
*snip*
TL
I, too, cannot rep, but this is very well written.
PsychoFish
New member
What we'll likely see is that some manufacturers (Dell as an example) that supplies to Sub-Saharan Africa via a UK based distributor will likely have an upwards trend. Plenty of our kit comes via Poland, India, China and Japan though.
However, what need to be kept in mind is that ALL international shipping transactions are done in USD and not in local currencies, so with the USD getting stronger we are going to kak off.
Flex
Will lift for boobs!
Jup, I think that is what it comes down to. All of this influencing the Dollars strength
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But surely pricing/costing is done in local currencies and then converted to USD?
PsychoFish
New member
Yes, but only to an extent. Basically if a container is sent from Country X to Country Y the shipping costs will be quoted in USD. If they pay upfront (which almost never happens) they'll pay local currency converted to USD amount. If they pay later one of two things happen (depending on the commercial agreement) either they pay according to the exchange rate as it stood on the day it landed on the dock/end point or they'll pay the average exchange rate for the duration that the kit was "in transit".
However this only affects the cost of transporting the goods and not the actual unit prices. Unit prices can be quoted in any currency and will be paid/costed differently.
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Ugh. Shipping sounds hard.
PsychoFish
New member
Naa, just a pain in the arse for the most part. It's called Incoterms (International Commercial Terms). Examples below (terrible copy and paste, so bear with me)
EXW – Ex Works - The seller makes the goods available at their premises, or at another named place. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a buyer incurs the risks for bringing the goods to their final destination. Either the seller does not load the goods on collecting vehicles and does not clear them for export, or if the seller does load the goods, he does so at buyer's risk and cost.
FCA – Free Carrier - The seller delivers the goods, cleared for export, at a named place (possibly including the seller's own premises). The goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer.
CPT – Carriage Paid To - The seller pays for the carriage of the goods up to the named place of destination. However, the goods are considered to be delivered when the goods have been handed over to the first or main carrier, so that the risk transfers to buyer upon handing goods over to that carrier at the place of shipment in the country of Export.
CIP – Carriage and Insurance Paid to - This term is broadly similar to the above CPT term, with the exception that the seller is required to obtain insurance for the goods while in transit. CIP requires the seller to insure the goods for 110% of the contract value under at least the minimum cover of the Institute Cargo Clauses
DAT – Delivered At Terminal - The seller covers all the costs of transport (export fees, carriage, unloading from main carrier at destination port and destination port charges) and assumes all risk until arrival at the destination port or terminal. The terminal can be a Port, Airport, or inland freight interchange, but must be a facility with the capability to receive the shipment.
DAP – Delivered At Place - the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Under DAP terms, the risk passes from seller to buyer from the point of destination mentioned in the contract of delivery.
Once goods are ready for shipment, the necessary packing is carried out by the seller at his own cost, so that the goods reach their final destination safely. All necessary legal formalities in the exporting country are completed by the seller at his own cost and risk to clear the goods for export. After arrival of the goods in the country of destination, the customs clearance in the importing country needs to be completed by the buyer at his own cost and risk, including all customs duties and taxes. However, as with DAT terms any delay or demurrage charges are to be borne by the seller.Under DAP terms, all carriage expenses with any terminal expenses are paid by seller up to the agreed destination point. The necessary unloading cost at final destination has to be borne by buyer under DAP terms
DDP – Delivered Duty Paid - Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. This term is often used in place of the non-Incoterm "Free In Store (FIS)". This term places the maximum obligations on the seller and minimum obligations on the buyer. No risk or responsibility is transferred to the buyer until delivery of the goods at the named place of destination.
FAS – Free Alongside Ship - The seller delivers when the goods are placed alongside the buyer's vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
FOB – Free on Board - Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on board the vessel. The seller must also arrange for export clearance. The buyer pays cost of marine freight transportation, bill of lading fees, insurance, unloading and transportation cost from the arrival port to destination.
CFR – Cost and Freight - The seller pays for the carriage of the goods up to the named port of destination. Risk transfers to buyer when the goods have been loaded on board the ship in the country of Export. The Shipper is responsible for origin costs including export clearance and freight costs for carriage to named port. The shipper is not responsible for delivery to the final destination from the port (generally the buyer's facilities), or for buying insurance. If the buyer does require the seller to obtain insurance, the Incoterm CIF should be considered. CFR should only be used for non-containerized seafreight and inland waterway transport; for all other modes of transport it should be replaced with CPT.
CIF – Cost, Insurance & Freight - This term is broadly similar to the above CFR term, with the exception that the seller is required to obtain insurance for the goods while in transit to the named port of destination. CIF requires the seller to insure the goods for 110% of their value under at least the minimum cover of the Institute Cargo Clauses.
Besides that, when it comes to payment (expecially if 3PL or 4PL companies are used) payments (quoted and charged in USD) have to happen to the 3rd parties. This is where the 3PL and 4PL companies make up money. You want your debtors to pay you when their local currency is weak against the USD (if not the US) and you want this to happen ASAP, in turn you want to pay your creditors when your local currency is stronger against the USD as generally the payment terms is up to 90 days and sometimes up to 180 days. Although you'll still pay say $ 100k US for the service you can make some "free" money from interest and exchange rates. We're not even talking small amounts here either.
Example... Debtor owes you $ 100k and pays you at R15.30 to the dollar, you pay the creditor $100k at R14.75 to the dollar. That's R55k that you've pocketed on a single transaction.
Thanks for the info and explanation!