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British pound hits record low against the dollar

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Re: British pound hits record low against the dollar

#111

Post by RC_ITR »

lisper wrote: post #84

I don't get it. The dollar is supposed to be inflating, so it should take more dollars to buy things. But it takes fewer dollars to buy euros and pounds and stocks and bonds. The prices of all of these things, denominated in dollars, is plummeting. WTF?

Inflation is the supply/demand relationship between a given currency and the things you can buy with said currency (financial assets like stocks are weird because they are valued based on future cash flows which causes some weird recursive effects)

The US is experiencing inflation because, across a number of categories, there is not enough supply of goods and services to match demand. This is due to things like “we built hotels for normal business travelers but now we have digital nomads” and “we are not really utilizing public transit anymore so more people want cars” etc.

Other countries are facing the same problems but worse (partly due to the war in Ukraine, among other idiosyncrasies) so the dollar becomes stronger relative to those currencies.

Keep in mind, the value of a currency in forex is usually “I need to buy a Euro because I want to buy something from someone who only accepts Euro.” So a factory shutting down in Germany (in a round about way) makes the Euro less valuable.

Re: British pound hits record low against the dollar

#112

Post by hristov »

darawk wrote: post #11

https://twitter.com/paulkrugman/status/1573649995290628096 The iron law of Krugman strikes again. I really need to start trading on this.

The iron law of hristov strikes again. It merely says that twitter is a terrible platform to publish anything that isn't short and idiotic.

Re: British pound hits record low against the dollar

#113

Post by rich_sasha »

wsc981 wrote: post #98
currenciessfe wrote: post #91

Earlier quoted context omitted.

It's not that simple. Germany wanted a country like Italy in the Euro so it would pull the currency down and not allow it to appreciate too much (like the Deutsche Mark did). That would would be very bad for German exports.

Yes, Germany benefitted hugely from southern European countries joining the Euro as it made it much easier for Germany to export goods to southern Europe. At the same time it was made much easier (at lower interest rates) for southern European countries to borrow money from northern European countries and other markets, as creditors would feel more secure that they'd get their money back. Creditors would assume the n…

This narrative is kind of correct, but it irks me when people somehow blame northern Europe for southern Europe's debt. No one forced them to overborrow, especially since it mostly happened in times prosperity.

Generally speaking, access to cheap debt is seen as a uniformly good thing.

Re: British pound hits record low against the dollar

#114

Post by dageshi »

stingraycharles wrote: post #62
astonex wrote: post #58

Earlier quoted context omitted.

The government just announced tax-cuts backed by borrowing, so likely to increase inflation even further.

But isn’t inflation usually an effect that happens after such an event, rather than something that’s being speculated on? Unless large institutions decided to sell their pounds, but that has to be a huge supply of pounds to make such an impact.

If you can reasonably expect something to be worth less in the future after new information emerges, wouldn't you sell it and buy something else?

Re: British pound hits record low against the dollar

#115

Post by siquick »

nyokodo wrote: post #82
peanuty1 wrote: post #75

Earlier quoted context omitted.

Many ppl in Scotland and Ireland view it as a gateway to independence they've long sought after.

So they’re moving from being beholden to London to beholden to Brussels? The freedom rings hollow with that move.

The North (including Liverpool upwards) has been dictated to by London and the south for hundreds of years, there’s a lot of people who wouldn’t mind an alternative to that.

Re: British pound hits record low against the dollar

#116

Post by pavlov »

Mountain_Skies wrote: post #36
nanidin wrote: post #29

Earlier quoted context omitted.

Indeed, a great time to vacation in the UK!

Many of my friends who regularly made trips to Europe pre-pandemic have been lured into making their first trips since 2019 due to the strength of the dollar against the Euro. Probably will be many similarly attracted to the UK by the weak Pound. Guess that's good news for the travel industry even if so much else is going wrong.

I lived in London for some years and wouldn’t choose to go to the UK as a tourist in the winter. It’s bleak and damp.

If the UK travel industry does benefit from the cheap pound, it probably won’t have any effect until next summer.

Re: British pound hits record low against the dollar

#117

Post by quickthrower2 »

xnorswap wrote: post #107
quickthrower2 wrote: post #105

The UK could now consider making stuff, and exporting that stuff. Probably good to do a London based startup too, sell to the US. Get your seniors for the price of a US junior (say $60k/y)

This is a lazy stereotype. People have been saying for decades about "the decline of manufacturing" all the while manufacturing output was increasing. It took a hit from Brexit of course, but peaked shortly before that.

What I mean is causality he other way around ... it is a good opportunity for new businesses to get started up taking advantage of being a cheap country to buy from.

Re: British pound hits record low against the dollar

#118

Post by rich_sasha »

echelon wrote: post #95
chanc3e wrote: post #89

Earlier quoted context omitted.

Nearly all A&E (ER) rooms are managed by the NHS. Private ones are few and far between so it’s likely that a tourist with insurance will end up in a standard A&E - which can have very long wait times[1]. The NHS is also using private clinics to help clear backlogs - so even private insurance can lead to a long time to see a consultant. Ambulances also do not have good response times. [1] https://www.kingsfund.org.uk/…

I hate to chime in with an ask, but does someone have a good read on healthcare in developed nations and mind commenting? I always hear and read complaints that the US doesn't have a single player public option for health insurance, and that it makes our country one of the worst. Other nations with "good health care" seem to pay their workers less, have higher taxes, have long wait times at the ER, weak militaries, e…

In general, UK system is hands down great i think. Other countries may have even better ones perhaps, but none of the horrors of US.

But in recent years, it's been struggling, certainly it wasn't high on the conservative govt funding list, and COVID caused extra burnout. Winters we're always tough, and this one is thought to be especially so.

It is unclear to me if it is a lack of money or poor spending.

Re: British pound hits record low against the dollar

#119

Post by imtringued »

Nursie wrote: post #57
walrus01 wrote: post #4

Maybe the economic ramifications of Brexit were not fully thought out before everyone decided to vote for it.

The latest crash in value is a direct result of two things last week - The Bank of England monetary policy committee deciding on Thursday to show “restraint” in only putting the interest rate up by 0.5%, because they want to wait and see what the Chancellor’s “mini-budget” would bring on Friday. That mini budget being a clusterfuck of unfunded tax giveaways to the already high-earning and wealthy.

So people are suspecting collusion between the government and Bank of England?

Re: British pound hits record low against the dollar

#120

Post by imtringued »

seibelj wrote: post #2

All 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…

Capitalism isn't working?!? Let's do it harder!
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