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When George Soros Broke the British Pound (2014)

priceonomics.com

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

#211

Post by simonh »

andrepd wrote: post #93
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…

>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.

By and large the investor earns rewards because that capital is doing useful work funding productive businesses. Maybe allowing the software business next to your furniture shop to expand, selling services abroad bringing money into the country, or creating a web site you can sell your furniture on.

The sorts of financial engineering you're talking about is of course a real thing, but can also add real value by making other useful transactions cheaper. So for example high frequency trading is used heavily by market makers, that provide a useful service creating liquidity in markets. That makes it easier and cheaper to buy and sell equities and such.

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

#212

Post by john_minsk »

justaguyhere wrote: post #17

A bit off topic - does anyone know other blogs like priceonomics? I'm a big fan - I think the first article I read there was the "Diamonds are bullshit" one. Must be fun having access to all kinds of interesting data and poring over them.

Liked the "Diamonds are bullshit"

Anything similar on watches/suits. THese are mine flaws

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

#213

Post by riffraff »

eru wrote: post #198
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.

I agree that the Euro is flawed, but I don't think your reasons are right. Other commenters point out that there's some transfer payments in the EU, a superset of the Euro zone. Also around the world you have other currency unions that don't involve transfers and that are doing just fine. Eg Hong Kong effectively uses the USD. See https://en.wikipedia.org/wiki/Currency_substitution for some more background. And, of c…

The currency union in this case is paired with lack of tariffs and free movement of capital and goods, which is not the case for Hong Kong and the US, nor was the case in the 19th century Australia and Canada.

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

#214

Post by diffeomorphism »

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

And now for years the UK can't figure out how it wants to leave, which people had no vote on.

- Do you want to have a border in Ireland?

- Do you want a border between Ireland and the rest of the UK?

- Do you want to lose money for the NHS even though we had a bus saying the opposite?

- Are you just going to say "no" to everything, but not have an idea what to do instead?

Then maybe, just maybe it would a good idea to ask voters to choose again between leave this way, that way, another way or "who knew this could be so complicated, let's not do that".

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

#215

Post by eru »

riffraff wrote: post #213
eru wrote: post #198

Earlier quoted context omitted.

I agree that the Euro is flawed, but I don't think your reasons are right. Other commenters point out that there's some transfer payments in the EU, a superset of the Euro zone. Also around the world you have other currency unions that don't involve transfers and that are doing just fine. Eg Hong Kong effectively uses the USD. See https://en.wikipedia.org/wiki/Currency_substitution for some more background. And, of c…

The currency union in this case is paired with lack of tariffs and free movement of capital and goods, which is not the case for Hong Kong and the US, nor was the case in the 19th century Australia and Canada.

Good points. Though to be honest, the EU has plenty of de-facto restrictions on free trade in services.

(Unilateral) free trade was a pretty popular policy back then.

In practice, the decrease in transportation costs we have today dwarfs the difference in tariffs.

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

#216

Post by HlessClaudesman »

peteretep wrote: post #186
Reason077 wrote: post #139

Earlier quoted context omitted.

> “The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members.” This is incorrect. The EU has substantial transfer payments. Wealthier EU countries (like Germany) subsidise poorer ones (like Poland) on the order of tens of billions of Euros annually. Regional development (subsidies for poorer areas) is the second largest EU budget line item after agricultu…

Germany paid net €12bn. California has net federal tax receipts of $450bn. Not identical types of figures, but comparing the tiny transfer payments in the EU to the gigantic ones in real financial unions is where the difference lies.

Pretty sure that billions in Europe have three extra zeros.

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

#217

Post by onion2k »

timthorn wrote: post #106
user5994461 wrote: post #100

Earlier quoted context omitted.

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.

Typical mortgage duration was and is ~25 years. The scenario in the 80s that gave homeowners relief was that the costs got inflated away (and MIRAS allowed the interest on a mortgage to be deducted from taxation)

Typical mortgage duration was and is ~25 years.

The number of 35 year mortgages has risen from 2.7% in 2006 to 15.75% now - https://www.theguardian.com/money/2017/jul/29/goodbye-25-yea... - and 40 year mortgages are becoming more common.

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

#218

Post by martinlaz »

wheels wrote: post #209
raxxorrax wrote: post #202

Earlier quoted context omitted.

For the average German it is plain and simple not an advantage. Maybe if the export bonuses keep the company you are working for alive, but that is a unrealistic edge case.

That's false. I'll give you a very easy example of how it's benefited me (and many, many Germans): I sell SaaS software on a subscription basis to customers all over the world. They pay for our service in USD, which is then converted to EUR when I get paid from the company. If the Euro was stronger, which it would be if it were only the currency for Germany, I'd get less Euro when that conversion happened, and I'd ha…

> If the Euro was stronger, which it would be if it were only the currency for Germany, I'd get less Euro when that conversion happened, and I'd have less local currency for things like rent, groceries, etc.

But wouldn't you be able to still buy exactly the same stuff with less (but stronger) Euros?

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