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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

#131

Post by dmichulke »

random_kris wrote: post #127
rich_sasha wrote: post #113

Earlier quoted context omitted.

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.

Well the northern European will blame southern for not being frugal enough. But this is the same as drug dealer saying their dead customer was not responsible enough. Yeah it true, but some people just are not responsible for their own actions and the dealer was happily benefiting all the time from him

Well, this!

Except that the dead customer still owes 590 billion to (mostly) the drug dealer mentioned above and won't be able to pay it.

And the goods delivered were not drugs but things that usually don't alter your way of thinking (like cars, machines, ...), even less if we're talking about a group of people (like the government or a country of 60mn people)

Oh and there was also trading (i.e. delivering goods back), so Italy is not only consumer but also producer.

Re: British pound hits record low against the dollar

#132

Post by wsc981 »

rich_sasha wrote: post #113
wsc981 wrote: post #98

Earlier quoted context omitted.

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.

If politicians have the ability to borrow, they will generally make use of it.

Which is why the weaker currencies were a much better fit for Southern European countries. Creditors would expect a high interest, due to high inflation, thus limiting the politician's ability to borrow money.

I do feel northern Europe (especially Germany) is partially to blame, since they were very much interesting in increasing their exports and the Euro was the enabler.

Re: British pound hits record low against the dollar

#133

Post by kalleboo »

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…

The biggest problem with state-managed health care is when you get ideologues in control who's ideology is "state-managed things can never work well", because it becomes a self-fulfilling prophecy. A lot of European countries have spent the past decade or two attempting to privative their health care to varying degrees, since the ideology says that will make it cheaper, but instead it has just gotten worse.

> does someone have a good read

The question is complicated enough that any writings on it will inherently have a bias since there are so many details that are easy to ignore in your favor

Re: British pound hits record low against the dollar

#134

Post by qeternity »

wsc981 wrote: post #132
rich_sasha wrote: post #113

Earlier quoted context omitted.

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.

If politicians have the ability to borrow, they will generally make use of it. Which is why the weaker currencies were a much better fit for Southern European countries. Creditors would expect a high interest, due to high inflation, thus limiting the politician's ability to borrow money. I do feel northern Europe (especially Germany) is partially to blame, since they were very much interesting in increasing their exp…

> If politicians have the ability to borrow, they will generally make use of it.

This does not absolve the politicians, nor the electorate.

Re: British pound hits record low against the dollar

#135

Post by sfrj »

I am a complete ignorant regarding economy but one thing I was quite certain about was that when you print a lot of money, then your currency devaluates. So why given that the US have printed huge amounts of dollars in the last couple of years, the dollar is winning both against the Sterling and the Euro?

Is it just that war in Ukraine have made investors ignore the huge inflation in the dollar?

Maybe after the midterms the dollar could have a crash if the democrats lose?

Re: British pound hits record low against the dollar

#136

Post by Ygg2 »

rich_sasha wrote: post #113
wsc981 wrote: post #98

Earlier quoted context omitted.

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.

> how blame northern Europe for southern Europe's debt.

They both share the blame. If a bank clerk keeps giving loans to a drug addict something is definitely off. Especially if it suggest settling the debts via organ sale (austerity).

Re: British pound hits record low against the dollar

#137

Post by midoridensha »

nyokodo wrote: post #80
woodruffw wrote: post #19

Earlier quoted context omitted.

I'm no economist, but intentionally cutting themselves out of a massive common market probably isn't helping much.

> intentionally cutting themselves out of a massive common market probably isn't helping much. My understanding is that they never intended to leave the common market but to gain a trade deal that would leave market access substantially the same. However, the EU wouldn’t let them keep access in the divorce if for no reason other than as a cautionary tale for other member states. So, it turned ugly and there they are.

Well that sounds like the UK's fault. It's like asking for a divorce from your spouse who earns a much bigger paycheck because you're bored with him and want to bang other people, but wanting to keep access to the shared bank accounts.

Re: British pound hits record low against the dollar

#138

Post by fulafel »

spaceman_2020 wrote: post #66
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.

Paul Krugman is probably the most consistently wrong popular economist I can think of.

Do you mean as a columnist/tweeter or in his work as a profesisonal economist in academia, textbooks etc?

Judged by peers he's still quite valued eg by this ranking: https://ideas.repec.org/top/top.person.all.html (rank 36/3255) - but of course in academic research you don't necessarily aim to be right as often as possible, it's a search and exploration of ideas and testing what works.

Re: British pound hits record low against the dollar

#139

Post by saurik »

sfrj wrote: post #135

I am a complete ignorant regarding economy but one thing I was quite certain about was that when you print a lot of money, then your currency devaluates. So why given that the US have printed huge amounts of dollars in the last couple of years, the dollar is winning both against the Sterling and the Euro? Is it just that war in Ukraine have made investors ignore the huge inflation in the dollar? Maybe after the midte…

The usual theory is that the US is not alone in experiencing inflation (or having printed huge amounts of money), but as it still is considered a reserve currency and seems to care quite a bit about getting inflation under control (in addition to having a track record of having done so), investors often assume it will recover more quickly than other currencies, causing them to dump their local currencies to put their wealth in the dollar until the economic storm has stabilized some.

Re: British pound hits record low against the dollar

#140

Post by hikingsimulator »

sfrj wrote: post #135

I am a complete ignorant regarding economy but one thing I was quite certain about was that when you print a lot of money, then your currency devaluates. So why given that the US have printed huge amounts of dollars in the last couple of years, the dollar is winning both against the Sterling and the Euro? Is it just that war in Ukraine have made investors ignore the huge inflation in the dollar? Maybe after the midte…

That inflation is primarily a monetary policy issue is an old economist orthodoxy. It's not true per se, or because it's been said n+1 times behind a pulpit.

If you look at St Louis' Fed plot charts, you see that if the relation was as prominent as it's made up to be, we would have had inflation for the past decade. This hasn't been true.

A wide majority of the money printed has actually gone to institutional investors and the financial markets, which have experienced a so-called inflation (in a sense, because by definition inflation is only concerned with consumer goods).

The dollar is winning against the euro and pound because the dollar still remains the world reserve money, a very important role the US government has defended since the end of world war 2.

Inflation in Europe is in a large part a supply shock with deep industrial ramifications. Since there is no russian gas anymore, there's been a scramble to buy it wherever else, often at a premium, which debases the currency and leads to inflation as gas is key to energy generation and important industrial processes, notably in germany.

The US enjoys a relative self-reliance energy-wise, which is important for domestic stability, but also allows the US government to sell energy abroad, reinforcing its currency comparatively.

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