Do You Really Know Where Your Phone Comes From?

25.10.2016 • Emerging Markets

From Olivier Perrin – The Brave Little Economist (France) –

Dear reader,

Take your phone.

It was probably designed in California . The parts are assembled in China , the screen and processor are from Korea , themselves contain certain materials coming from South Africa . Your customer service is in Ireland and yourself probably in France .

It is the same for almost all the objects around you:

  • This wooden table Russian , sent to China to be cut with the addition of the screws from Eastern Europe and shipped to France for a Swedish company;
  • Yogurt with mango , the fruit was picked in India, the milk produced in Germany, the recipe developed in France in a pot from Czech derépublique and sold in Poland for a giant agribusiness Switzerland;
  • A shirt trimmed in Bangladesh with US cotton, Indian dye, an Italian Cup and sold in Asia.

If you had to remove your supermarket ALL items for which at least one operation was carried out of Europe … There would not much. And I do not even talk about the products 100% designed and manufactured in France.

Take the example of chicken and poultry: they are difficult to import. Health standards are particularly onerous and complicated transportation. Yet 30 to 40% of the chicken we eat is imported … mainly from Brazil and Thailand.

In general, goods that surround us often required operations in many different currencies: Yen JapaneseDollar US, Yuan Chinese Real  Brazilian Pound SterlingRuble Russian, Euro … as well as hundreds of local currencies.

The reality is that it is a nightmare finance and accounting.

How to set the price of your phone while the battery cost can vary from simple to double depending on the evolution of exchange rates? How to plan your raw material supply for the coming year without knowing how much it will really cost?

Of course the problem is not new and it’s a long time that a solution default was found.

Now we observe since 2012 the complete exhaustion of that system.

I am Olivier Perrin, the brave little economist. Starting today, I’ll tell you all the little secrets that economists on TV will never tell you but yet directly affect your daily life.

-Read more at (French)-

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