https://twitter.com/paulkrugman/status/1573649995290628096
The iron law of Krugman strikes again. I really need to start trading on this.
British pound hits record low against the dollar
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Re: British pound hits record low against the dollar
#12Maybe the economic ramifications of Brexit were not fully thought out before everyone decided to vote for it.
Of course it wasn’t thought out. It was a knee jerk reaction primarily based on gut feel about immigrants for the most part. Can’t lock yourself out in a globalized world and really can’t be a country (without basically having metaphorically medieval infrastructure) without globalization.
Re: British pound hits record low against the dollar
#13I wonder why the GBP is going down so much faster than EUR. If this is because of expensive energy imports, they should go down equally fast?
Edit: Ahh, tax cuts and concern of larger deficit.
Re: British pound hits record low against the dollar
#14"A dollar a pound".
A few decades ago this was in the headlines on CNN if I remember correctly.
But really, there is no real reason for the GBP to be worth more than the dollar in the last few decades.
The UK is a bit of a **hole, except for London. Guess things finally coming into balance now.
Re: British pound hits record low against the dollar
#15All government revenues are the result of taxing citizens. Citizens only have money to be taxed if they are employed in productive money-generating enterprises. If the laws and regulations of the nation are such that the citizens can’t make money, then the government has no choice but to cut taxes and regulations until private business can flourish again. Otherwise it’s a never ending strangling of business, lower re…
What you are saying is the policy of the new prime minister. When it was announced, the pound lost 40% of its value as a result of that.
Her policies are the result of an ideological adherence to Reaganomics trickle down economics instead of any pragmatic economic policy.
I live here and your proposed hyper capitalistic haven sounds like a nightmare. You even preempted any possible failure this type of policy can have for 10 years.
Re: British pound hits record low against the dollar
#16"A dollar a pound". A few decades ago this was in the headlines on CNN if I remember correctly. But really, there is no real reason for the GBP to be worth more than the dollar in the last few decades. The UK is a bit of a **hole, except for London. Guess things finally coming into balance now.
I don't think that this is how currencies are priced...
Re: British pound hits record low against the dollar
#17Maybe the economic ramifications of Brexit were not fully thought out before everyone decided to vote for it.
The Euro and Yen and almost all currencies are also down significantly vs the dollar, so I don’t think this is a Brexit thing. This is a strong US dollar thing as the world grapples with collateral shortages and a relative dollar shortage.
Edit: I highly recommend the podcast “Eurodollar University” on the subject.
Re: British pound hits record low against the dollar
#18https://twitter.com/paulkrugman/status/1573649995290628096 The iron law of Krugman strikes again. I really need to start trading on this.
Thanks for the link, it was really interesting. But what is the iron law exactly?
Re: British pound hits record low against the dollar
#19I wonder why the GBP is going down so much faster than EUR. If this is because of expensive energy imports, they should go down equally fast? Edit: Ahh, tax cuts and concern of larger deficit.
I'm no economist, but intentionally cutting themselves out of a massive common market probably isn't helping much.
Re: British pound hits record low against the dollar
#20All government revenues are the result of taxing citizens. Citizens only have money to be taxed if they are employed in productive money-generating enterprises. If the laws and regulations of the nation are such that the citizens can’t make money, then the government has no choice but to cut taxes and regulations until private business can flourish again. Otherwise it’s a never ending strangling of business, lower re…
Not a tax expert here.
Singapore has a progressive personal tax system with top personal tax rate of 22% (i have not looked at Dubai).
The UK also has a progressive personal tax system, they just cut their top rate of tax from 45% to 40%
Corporate tax is 17% in Singapore, and 19% in the UK.
Also factor in, Ireland has a corporate tax rate of 12.5% and progressive tax rate up to 40%.
This cut seems meaningful from a market confidence perspective, it is unclear how the UK intends to fund these tax cuts in tandem with energy bailouts. Economists have taken a view that the books do not balance here. The UK has suggested that economic "growth" will solve the problem. In terms of attracting talent and businesses (and now possibly investment) to drive that growth as an alternative to the likes of Singapore or Ireland it seems unlikely.