When George Soros Broke the British Pound (2014) • Hacker News Board

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

#221

Post by phicoh » Wed, Nov 06, 2019, 9:43 AM UTC

Despegar wrote: post #163

_visgean wrote: post #153

Earlier quoted context omitted.

Not true at all. I am from Czech republic and we benefited massively from these contributions. If I compare for example general state of infrastructure it is much better than in UK where I currently reside. All the train stations were rebuilt using EU funds. Also not sure what you are talking about "This halfway step only serves the wealthy.", not not really. Look at quality of life and GDP rise in post soviet EU cou…

The Czech Republic isn't in the Eurozone and doesn't face the structural disadvantages that Greece or Portugal do.

At the introduction of the Euro, many were quite concerned about Greece joining.

The EU consists of independent, co-operating countries. This is quite different from the US. There is very little the EU can do without votes from the individual countries.

So the assumption is that a country that joins the Euro has carefully evaluated the pros and cons. At the same time, the amount of subsidies a country receives is not dependant on that country being part of the Euro-zone or not.

If you look at the Euro at the time of introduction, then there was every intent to make Euro as strong and stable as the Deutche Mark. Very much so against the wishes of France, who wanted a currency that was way more subject to political control.

Of course, one incentive for countries to adopt the Euro was exactly was the article is about: a small currency stands no chance against investors speculating against it. Better hide in a big currency.

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

#222

Post by wheels » Wed, Nov 06, 2019, 9:44 AM UTC

martinlaz wrote: post #218

wheels wrote: post #209

Earlier quoted context omitted.

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?

No. My rent won't go down in Euro just because the Euro is strong. The strength or weakness of a currency mostly dictates how it interacts with goods and services from outside of its currency zone. So I might be able to buy more consumer electronics (which mostly aren't produced in Germany) with a strong Euro, but rent, milk, bread, which are internal to Germany, will stay approximately the same in their Euro denomination.

This is true in most places without particularly volatile currencies, though in countries that do have very volatile currencies, things like rent have historically been specified in stable currencies like US Dollars, Deutsche Mark or Euro.

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

#223

Post by dev_north_east » Wed, Nov 06, 2019, 9:44 AM UTC

zenlot wrote: post #164

bArray wrote: post #159

Forgetting the politics of George Soros (which isn't suitable for HN anyway), I don't believe he is to blame for the UK government's questionable choices. To put the estimated £3.3 billion loss into perspective: * The failed NHS software update/upgrade project cost >£12 billion [0]. * The UK spends ~£9 billion a year (after calculating rebates) to be a minority voting block in the EU [1]. It's currently costing ~£0.7…

UK should be now getting 350 million GBP per week for NHS.

Already factored in - https://www.bbc.co.uk/news/health-44495598

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

#224

Post by raxxorrax » Wed, Nov 06, 2019, 9:44 AM UTC

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…

That is by far not the average situation. That would also mean that wages would increase when the Euro was introduced.

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

#225

Post by phicoh » Wed, Nov 06, 2019, 9:59 AM UTC

bildung wrote: post #210

op00to wrote: post #154

Earlier quoted context omitted.

> halfway step only serves the wealthy How?

(Warning: Armchair economist!) Poorer countries in general have lower productivity (possible causes can be lacking infrastructure (roads, electricity, telecom, but also regulations etc.), lacking capital, lacking foresight/lacking capital to invest in future tech by the governement (e.g. broadband internet)). This results - despite lower wages! - in higher unit labor costs. If you form a monetary union with poorer an…

Higher minimum wages to solve imbalances in the Euro-zone would probably result in a disaster.

In areas where countries like Germany directly compete with poorer countries, they do so by having more and better automation. Productivity is not that people work harder, is it that there are more machines to do the work.

The net effect of raising wages is that there will be more automation, largely negating the increase in wages. By it self this is not a problem.

Where is goes wrong is that within a country, there are many jobs that cannot be automated easily. In particular, with an aging population, you need lots of nurses and other care takers.

Increasing minimum wages with sole goal of reducing export imbalance can make those cost go through the roof, and generally lower the standard of living for a large part of the population.

Reducing the cost of 'care' and other jobs that dependent on personal service, is already very important to improve the standard of living.

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

#226

Post by silasdavis » Wed, Nov 06, 2019, 10:14 AM UTC

ceejayoz wrote: post #28

optimiz3 wrote: post #24

Earlier quoted context omitted.

> If you build a house on rotten stilts, and some neighborhood kid comes and kicks one of them, it's not the kid's fault when the house collapses. Don't like this metaphor. Maybe the the homeowner can't afford to fix their house. Now they're homeless. Hurting others for enjoyment is the basis of evil. Leave the world better at the end of the day, not worse.

Those sorts of maybes don't really matter. "Please don't be a dick" doesn't even work at the neighborhood kids level. It certainly doesn't work at the international finance level. The Bank of England propped up the currency in a non-sustainable fashion, and spent billions trying to avoid having to admit that was a bad call. Someone was always going to come along and smash it, especially with billions of dollars of up…

I can see both sides of this. You can describe Soros' as an inexorable result of natural law, but he still gets to be the dick who kicked it and to profit grotesquely from it.

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

#227

Post by matz1 » Wed, Nov 06, 2019, 10:17 AM UTC

BubRoss wrote: post #185

matz1 wrote: post #182

Earlier quoted context omitted.

In your context, even if the pound are being backed, doesn't mean it can't be destroyed.

That's exactly what it means. If there is enough to exchange for the price that is claimed, then a billionaire can't break the peg by exchanging out pounds and forcing their hand. The gold standard collapse in the US happened when France thought they didn't really have enough gold to back their currency. They started exchanging dollars for gold and the US was forced to break the amount of gold they claimed dollars we…

>If there is enough to exchange for the price that is claimed, then a billionaire can't break the peg by exchanging out pounds and forcing their hand.

Sure, doesn't mean that there is no other way to break it.

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

#228

Post by bildung » Wed, Nov 06, 2019, 10:26 AM UTC

phicoh wrote: post #225

bildung wrote: post #210

Earlier quoted context omitted.

(Warning: Armchair economist!) Poorer countries in general have lower productivity (possible causes can be lacking infrastructure (roads, electricity, telecom, but also regulations etc.), lacking capital, lacking foresight/lacking capital to invest in future tech by the governement (e.g. broadband internet)). This results - despite lower wages! - in higher unit labor costs. If you form a monetary union with poorer an…

Higher minimum wages to solve imbalances in the Euro-zone would probably result in a disaster. In areas where countries like Germany directly compete with poorer countries, they do so by having more and better automation. Productivity is not that people work harder, is it that there are more machines to do the work. The net effect of raising wages is that there will be more automation, largely negating the increase i…

Not disagreeing that poorer economies need more automation.

But when looking at countries it is very important to not only look at wages as cost. Especially in Germany the low wages result in low domestic demand, which results in the country being a net exporter again and again.

Rising wages, especially minimum wages, are mostly spent domestically on services (think going to the hairdresser instead of cutting your own hair, or finally using healthcare as needed).

Germany was a wonderful field experiment for exactly this in the last years, as it was one of the two countries out of 27 European countries not having minimum wage laws. After implementing minimum wage (starting at 7€ something, now at 9.20€/h) pretty much zero job loss could be observed, depending on market segment quite the opposite. Because wages are not only costs, but also create demand.

In Germany, the lower 60%(!) of the population only hold 3% of the wealth. In other words: Almost every € earned gets spent on consumption. If those people earn more money, they spend more money, thus creating demand.

Automation is a real thing, but then again what gets automated aren't those low wage jobs in the service economy - it's mostly work in higher income brackets. And the automation can result in severe disruption in local market segments, but overall it doesn't result in less employment - see yearly productivity growth and employment rates of most industrialized economies. Just look at the United States, which currently has nearly full employment despite currently being the world center of (software) automation.

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

#229

Post by mrtksn » Wed, Nov 06, 2019, 10:31 AM UTC

bArray wrote: post #159

Forgetting the politics of George Soros (which isn't suitable for HN anyway), I don't believe he is to blame for the UK government's questionable choices. To put the estimated £3.3 billion loss into perspective: * The failed NHS software update/upgrade project cost >£12 billion [0]. * The UK spends ~£9 billion a year (after calculating rebates) to be a minority voting block in the EU [1]. It's currently costing ~£0.7…

Wow, such a propaganda tone that I am not used to seeing in HN.

"9 billion a year for a voting right" is like saying that the average software developer in London pays 20K a year to the government for voting rights every 5 years. You obviously don't pay taxes for voting rights, you pay taxes to sustain or improve the environment you operate in and the voting is about choosing the people and the path to that.

The "divorce bill" makes it sound like it some kind of a fine or something but it's actually about the obligation that the UK committed through the years. A good analogy would be the UK participating in a birthday dinner party, promising to chip in for the present, ordering the food and the desert but leaving before the desert arrives so people expect the UK to pay for its desert as it was already cooked and pay its part for the present they bought. This is not going away no matter if the Brexit would be hard, soft, mellow or squishy. If the UK does not honour its obligations, it would be incorporated in the future trade agreements.

Please don't use propaganda catchwords and talking points here, the topic itself is divisive but this is beyond that. It is a dishonest portrayal of reality.

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

#230

Post by aembleton » Wed, Nov 06, 2019, 10:34 AM UTC

ptah wrote: post #220

> The hope was that tighter relations would prevent catastrophic wars from breaking out every few decades This is a crucial fact that has not been mentioned by anyone in public discourse about Brexit

David Cameron warned that Brexit could trigger World War Three during the referendum campaign https://www.mirror.co.uk/news/uk-news/brexit-could-trigger-w...