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When George Soros Broke the British Pound (2014)

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Re: When George Soros Broke the British Pound (2014)

#91

Post by sgt101 »

LatteLazy wrote: post #29
ummonk wrote: post #26

What I would like to see is what led to the pound being so badly mispriced in the first place. Did they just price it at whatever was the prevailing price? And was that why the Bank of England ended up with such small reserves? Presumably they could have priced it lower and bought up Deutschmarks to bring down the price of pounds and build up reserves to start with when they decided to fix it. There is also the quest…

It was a political choice. The idea was to avoid inflation and keep prices low for consumers. Of course the same action strangled exporters but they don't vote much...

Also it meant that the owners of UK assets had the best possible valuation of those assets. Those asset owners were significant in the calculations of the tory party, for some reason.

Re: When George Soros Broke the British Pound (2014)

#92

Post by turtlecloud »

mc3 wrote: post #88

Ah those poor boomers! Paying 15% interest on their £40,000 mortgage. These millennials don't know how easy they have it, paying 3% on their £200,000 mortgage.

the boomer can always refinance to the 3% - not sure what you are getting at here.

Re: When George Soros Broke the British Pound (2014)

#93

Post by andrepd »

nostrademons wrote: post #31
ummonk wrote: post #26

What I would like to see is what led to the pound being so badly mispriced in the first place. Did they just price it at whatever was the prevailing price? And was that why the Bank of England ended up with such small reserves? Presumably they could have priced it lower and bought up Deutschmarks to bring down the price of pounds and build up reserves to start with when they decided to fix it. There is also the quest…

Market prices for currencies reflect what you can buy with them. If a country's economy is strong, they're exporting a lot of things that the world wants to buy from them, and the world wants to invest in a bunch in a number of securities denominated in their currency, the currency will be strong. If the country's economy weakens (relative to other countries in the global economy), the currency will weaken. There cou…

>misincentives that encourage people to shift value around rather than producing value

Isn't that just capitalism? Useless financial operations (shifting value around) are richly rewarded, as opposed to "producing value", which gets scraps as low as the market will bear. You can work your ass off making furniture for 4 decades, you will earn as much as an "investor" does in one week.

Re: When George Soros Broke the British Pound (2014)

#94

Post by mjevans »

My takeaway from this is that austerity is not a government level solution. That works for smaller players (even corporations) within a larger system, but at the level of system where a whole economy's possible size of pie is defined by laws and regulations cutting back only wastes the potential of the resources within.

I speculate that a better measure is to direct efforts towards wise expenditures. Seek to focus the economy on things that will be of benefit when done, with a focus on long term positive value to the economy and the quality of life for all.

"John Major had made entering the ERM the centerpiece of his monetary policy and his plan to bring austerity to England. The events destroyed his credibility."

...

"If you’re looking for a take away from this story, that’s one of them."

Re: When George Soros Broke the British Pound (2014)

#95

Post by jamiegreen »

gumby wrote: post #84
elmar wrote: post #79

Earlier quoted context omitted.

Sometimes I wonder if this incident didn't happen, would the UK had entered the Euro and Brexit wouldn't be on the horizon today.

They fellout of the EMS because their economy wasn not as tightly coupled to the rest of what became the Eurozone (whether that level of coupling is good or bad is a matter of disagreement). So if this incident hadn't happened it's likely they would have had a touch time under the Euro. For a weak economy IMHO the Euro is worth the disadvantages (and I happen not to consider the inability to do competitive devaluatio…

We should leave the EU because it was voted for by the majority

Re: When George Soros Broke the British Pound (2014)

#96

Post by scaphandre »

m-i-l wrote: post #69
philipkglass wrote: post #66

Earlier quoted context omitted.

"The cost to British taxpayers was estimated at roughly £3.3 billion." That's an average of over £100,000 per tax payer. Again, to clarify, tax payers are not some "egos at the Bank of England", but ordinary people like me and you. There were only 33,000 tax payers in the UK in 1992? I don't know how many tax payers there were, but dividing by the population at the time comes out to £58 per person.

Good spot. I must have been either using the British definition of billion (million million) rather than the US definition (thousand million), or failed to spot that the 25,700 taxpayers in the referenced document actually represented 25,700,000. Anyway figure corrected. Thanks.

Billion has meant 10^9 in both the US and the UK in most common usage since the 1970s. https://en.wikipedia.org/wiki/Long_and_short_scales#cite_not...

There is no modern British definition that is different from the US definition.

Re: When George Soros Broke the British Pound (2014)

#97

Post by ajxs »

scandox wrote: post #49
ajxs wrote: post #45

There seems to be an abundance of posts about Soros himself getting flagged killed in this thread. Why is that? Are his character and his political ambitions not relevant to a discussion about his demonstrated ability and intent to cause massive financial disturbance in the global economy?

I think his character and intentions have become such a trope that it has made it near impossible to gauge the good or bad faith of the person who starts discussing them. In a sense his name has now transcended rational discussion and become a symbol. Probably there needs to be an internet "law" for this, like Poe's Law or Godwin's law...You just cannot know if the person who names him wants a sane discussion or to j…

I absolutely disagree. Taken categorically, your point here would effectively silence any critique or analysis of Soros' intentions, character and actions. You're right that he is a contentious character subject to many conspiratorial accusations. The low quality of some of the more outrageous accusations however should not be a reason to spare him any further criticism. I'd also question the notion of 'bad faith' in this discussion that you raised. If someone brings up valid points regarding Soros' character, I don't think their political beliefs should be relevant if they're not part of the discussion. For what it's worth I don't like Soros or his actions, however I think the reality is much more nuanced than the more conspiratorial accounts suggest.

Re: When George Soros Broke the British Pound (2014)

#98

Post by nl »

ajxs wrote: post #45

There seems to be an abundance of posts about Soros himself getting flagged killed in this thread. Why is that? Are his character and his political ambitions not relevant to a discussion about his demonstrated ability and intent to cause massive financial disturbance in the global economy?

I have show-dead on, and when I wrote this reply there are only(?) three dead root level comments. One is "Who is this guy" (which is unsubstitutive and seems like a Google search away), another is "Good example of why anyone should be skeptical of Soros. He is a profiteer with little regard for the damage he causes." (which I guess a case can be made for, but seems just a political/personal attack rather than particularly interesting).

The third tells people to read an outrageously anti-semtic, pseudo intellectual set of books. As one review of these books says: "the book is controversial, not only because of its theoretical approach, but also, and perhaps primarily, because of sloppy scholarship". It also recommends an author who "argues that mass killings of Jews throughout history have been understandable reactions to Jewish beliefs and behavior. He goes so far as to justify Eastern European pogroms and even the Nazi Holocaust on these grounds. As he wrote in a 2003 Culture Wars article, “[T]he Nazi attempt to exterminate the Jews was a reaction to Jewish Messianism (in the form of Bolshevism) every bit as much as the Chmielnicki pogroms flowed from the excesses of the Jewish tax farmers in the Ukraine.”" This comment finishes with the statement "To grasp the truth and the bigger picture, you cant get it on controlled sites such as this, where truth is suppressed."

Needless to say, claiming "truth is suppressed" is a great way to appeal for upvotes..

Re: When George Soros Broke the British Pound (2014)

#99

Post by ajxs »

simlevesque wrote: post #47
ajxs wrote: post #45

There seems to be an abundance of posts about Soros himself getting flagged killed in this thread. Why is that? Are his character and his political ambitions not relevant to a discussion about his demonstrated ability and intent to cause massive financial disturbance in the global economy?

> demonstrated [...] intent to cause massive financial disturbance in the global economy it's not clear to me that this was his intent. the intent seems to be making a lot of money.

Surely reckless indifference as to the outcome of his actions must at some level attribute him some moral culpability for what he did. Thieves might say that their intent wasn't to deprive others, simply to enrich themselves. Soros may well have just wanted to make a lot of money, but the manner in which he did it has consequences.

Re: When George Soros Broke the British Pound (2014)

#100

Post by user5994461 »

mc3 wrote: post #88

Ah those poor boomers! Paying 15% interest on their £40,000 mortgage. These millennials don't know how easy they have it, paying 3% on their £200,000 mortgage.

At 15% the boomer could fully pay and own the property within 5-10 years. Then save or go on to buy a new one.

At 3% the millennial will still not be owning their property after 30 years.

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