2026 TeoTwawKi ... 2032 Darkest Interregnum Message Board

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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 386.87

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4:00 PM EST

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To: Haim R. Branisteanu who wrote (91860)	6/26/2012 8:22:01 AM
From: elmatador	Read Replies (1) of 218163

Terms of trade deteriorated for EZ. In layman's terms it means what quantity of imports can be purchased through the sale of a fixed quantity of exports. An improvement in a nation's terms of trade (the increase of the ratio) is good for that country in the sense that it can buy more imports for any given level of exports. If Italy exported 1 coffee machines and 1 ice cream machines and got two bags of sugar and five bags of coffee and ton of frozen orange juice. Now it exports the same machine but get only one bag of sugar and 3 bags of coffee, 300 L of frozen orange juice. That means it has to export more to get the same inputs it imported before. The terms of trade is influenced by the exchange rate because a rise in the value of a country's currency lowers the domestic prices for its imports but does not directly affect the commodities it produces (i.e. its exports). If Italy leaves the Euro and get a cheaper currency its imports will get much more expensive and will become even more difficult for its transformation industry.

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