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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)

#111

Post by devtul »

jamiegreen wrote: post #95
gumby wrote: post #84

Earlier quoted context omitted.

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

No, we should do a second vote, maybe even a third vote in case the second vote result is wrong again as the first one.

Sometimes democracy doesn't work you know, so we have to try harder.

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

#112

Post by PeterisP »

Despegar wrote: post #105
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.

The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members. So you have countries like Germany that are effectively subsidized by poorer countries. It's been a great setup for 20 years if you've been in the German capital class, not so great for anyone else.

The majority of EU budget consists of programs such as the common agricultural policy, ERDF and other infrastructure funding which are de facto transfer payments to improve and sustain poorer areas.

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

#113

Post by Despegar »

PeterisP wrote: post #112
Despegar wrote: post #105

Earlier quoted context omitted.

The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members. So you have countries like Germany that are effectively subsidized by poorer countries. It's been a great setup for 20 years if you've been in the German capital class, not so great for anyone else.

The majority of EU budget consists of programs such as the common agricultural policy, ERDF and other infrastructure funding which are de facto transfer payments to improve and sustain poorer areas.

Until German taxpayers are financing universal healthcare and pensions for Greeks and Italians, those things are marginal at best.

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

#114

Post by PeterisP »

jk27277 wrote: post #86
nostrademons wrote: post #27

It's interesting to read this with an eye on current global macroeconomic conditions. The dollar is significantly overvalued today, a result of its status as the global reserve currency. And the consequences of that are all the same ones mentioned for the pound in the article. The U.S. has been running a large current account deficit since 1980: we import more than we export. Our jobs are moving overseas, because it…

"we import more than we export. " Doubt that. Before you answer with a statistic, Google "dark matter in accounting" regarding the deficit. If apple sells an iPhone to Germany. In what export balance does it appear? What company makes the profits?

Without putting much analysis into it, IMHO whenever Apple would sell an iPhone in Germany the effects are as follows:

Goods export worth the "wholesale price" from China to EU;

An EU company (Apple entity in Ireland or Netherlands? the 'double Irish sandwitch' arrangement which IIRC is still used is a bit tricky, but one of these) earning almost all of the profits of that deal;

The shares of publicly traded USA company 'Apple' appreciating in value because the value of the EU company that they fully own increased because they gained profit and cash (but which won't be repatriated to USA due to tax reasons).

IMHO that sale wouldn't have any direct effect on USA trade balance and on USD supply/demand.

Does this make sense? Am I getting something substantially wrong?

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

#115

Post by tomatocracy »

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.

Rates going from 10% to 15% means an average monthly payment on a repayment mortgage with 15 years left to run would have increased by nearly 30% overnight (assuming mortgages at 2% above base rate). This was announced in the jaws of the early 90s recession.

To put that in context - today the GBP bank rate is 0.75% and the average mortgage rate is probably c.1% above that. The base rate would have to rise to more than 5% to get the same size effect on the monthly cost of a repayment mortgage with c.15 years left to run.

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

#116

Post by skissane »

devtul wrote: post #111
jamiegreen wrote: post #95

Earlier quoted context omitted.

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

No, we should do a second vote, maybe even a third vote in case the second vote result is wrong again as the first one. Sometimes democracy doesn't work you know, so we have to try harder.

A majority of people voted to leave the EU. They didn't (at the ballot box) express any opinion on how to leave the EU – deal or no-deal, hard Brexit or soft Brexit, etc. If having an initial referendum on whether to leave was the right thing to do, why would not a further referendum to decide how to leave be equally right? It could take the form of an up-down vote on Johnson's deal; or, it could take the form of preferential (1, 2, 3, etc – as in instant run-off) voting on options – e.g. leave with May's original deal, leave with Johnson's new deal, leave with no deal, withdraw article 50, ask for another extension to negotiate further.

Some will argue that the coming general election is an up-down vote on Johnson's deal. However, it isn't in that it is a first-past-the-post contest between different parties in each constituency – a majority of the vote might be received by parties opposed to Johnson's deal, yet the Tory candidate might still be returned due to the majority against them being split. A referendum on the deal itself wouldn't be faced with that issue.

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

#117

Post by richardknop »

PeterisP wrote: post #112
Despegar wrote: post #105

Earlier quoted context omitted.

The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members. So you have countries like Germany that are effectively subsidized by poorer countries. It's been a great setup for 20 years if you've been in the German capital class, not so great for anyone else.

The majority of EU budget consists of programs such as the common agricultural policy, ERDF and other infrastructure funding which are de facto transfer payments to improve and sustain poorer areas.

Correct me if I’m wrong but isn’t majority of agricultural funding going to France, Germany etc, the wealthy members?

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

#118

Post by skokage »

Despegar wrote: post #105
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.

The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members. So you have countries like Germany that are effectively subsidized by poorer countries. It's been a great setup for 20 years if you've been in the German capital class, not so great for anyone else.

>So you have countries like Germany that are effectively subsidized by poorer countries.

Could you explain this comment further, or have links to stories that go in depth on how that works? Not saying you are wrong, but I don't understand how germany, which is an economic powerhouse and exports a lot of goods, are being subsidized by poorer countries.

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

#119

Post by willyt »

jamiegreen wrote: post #95
gumby wrote: post #84

Earlier quoted context omitted.

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

...consisting of ~1/4 of the population. Parliament represents the interests of all 65 million of us.

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

#120

Post by gnaritas »

ClumsyPilot wrote: post #60
nostrademons wrote: post #31

Earlier quoted context omitted.

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…

> "A generation of lazy people who don't work hard" I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? The mantra of "It's important to work hard" needs to die. Today we have fewer friends than ever, population is unhealthy and the biggest killer of young men is suicide. Please don't perpetuate this nonsense. It should be: "Work smart, and look after yourself/ yo…

> I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory?

They grew up lazy in soft times. It's a never-ending cycle, parents work hard to make kids lives easier than theirs, kids don't get challenged as parents did, grow up soft and lazy and blame the world. They fail, raise kids poor, who get challenged again and grow up hard and make something of themselves, and then raise lazy kids trying to improve their kids life, repeat ad infinitum.

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