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British pound hits record low against the dollar

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141–150 of 379 posts

Re: British pound hits record low against the dollar

#141
post #96

Earlier quoted context omitted.

I want to have my cake and eat it, too! From my outsider’s perspective, the EU’s justification is far stronger than a “cautionary tale”: a Union means a Union. No other country or state structure in the world allows its constituent members to carve out only the bits that they themselves like; that would subvert the entire point of the Union.

> No other country or state structure in the world allows its constituent members to carve out only the bits that they themselves like The EU more or less does exactly that with Norway, a non-EU country with common market access and freedom of movement etc. That was the model I recall being promoted for a UK/EU relationship. They never intended to leave the common market or eschew all regulatory commonality.

The UK was offered a Norway-style deal, where they kept market access in exchange for following EU rules.

They refused, because that would effectively mean they still have to follow all the same rules, but now without any say in how they're decided.

But turns out you can't just demand all the benefits of a club without following any of the obligations and now the UK is where it is.

People were being sold a lie and they believed it. The optimum relationship with the EU was always the one they already had, membership with a few extra carve-outs.

Re: British pound hits record low against the dollar

#142
post #5

Crazy times it wasn't long ago that a pound bought over $2. The interesting thing this week is that the most fragile and indebted country that the EU has bailed out for 30 years straight (Italy) has elected a govt that doesn't like the EU. Good times ahead.

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.

Having a weak currency means you're selling cheap and buying expensive, so it's not clear how it benefits you. It certainly benefits everyone else.

Re: British pound hits record low against the dollar

#143
post #82

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.

Well to be fair, Brussels doesn't have a history of state violence and oppression towards them.

Re: British pound hits record low against the dollar

#144
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.

Incentives matter, and when you create incentives to over borrow, you're going to see entities overborrow.

Re: British pound hits record low against the dollar

#145
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…

Most of the money supply is created by private banks, not central banks, by lending.

Anybody talking about 'M1 money' know this btw, and just try to bullshit around to fit their narrative.

Having a country's money devaluate mean that investors aren't confident of the future value of the production of said country. You can devaluate by having high inflation compared to your neighbors, but in this case I'd bet on a confidence crisis. I didn't follow UK politic too closely but they recently ousted their PM? And the Ukraine war doesn't help with confidence. Also the trade numbers seems to not have recovered from COVID-19, unlike most EU countries, which cannot help.

Re: British pound hits record low against the dollar

#146
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?

Those other things are inflating even faster...

Re: British pound hits record low against the dollar

#147
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…

What exactly would it take for you to accept that your policy proposals are a failure? Honest question here, because what I see is the UK doing exactly what you are saying they should do, but it's resulting in the general economic destruction of their country.

When did any politician admit to making a policy error of this magnitude? I find it hard to even think of any examples of a politician admitting they were wrong about something substantial.

Re: British pound hits record low against the dollar

#148
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…

Just because the US printed a lot, doesn’t mean others haven’t done it as well. In fact, the EU printed more money in absolute terms and especially compared to size of their economy. And as others said, while inflation in the US comes from higher cost for labor, in the EU inflation comes from very high energy costs

Re: British pound hits record low against the dollar

#149
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?

> The dollar is supposed to be inflating, so it should take more dollars to buy things.

It turns out the bitcoin theory of inflation is wrong.

Re: British pound hits record low against the dollar

#150

Earlier quoted context omitted.

The cause is a direct response to the government announcing their ~budget~ "fiscal event", which is to cut taxes, particularly on the rich, and increase spending

She was not kidding when she said she was Thatcher v.2. Exactly what the UK did not need.

Thatcher implemented a windfall tax, LT is not even that. UK residents are paying twice for their energy consumption as a result.

Nose was in the trough 3 days into her premiership when the top treasury official got fired, to make way for these tax cuts. Guess the Conservatives figure they are going to lose the next election...

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