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Sterling collapses as investors fly into dollars

reuters.com

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Re: Sterling collapses as investors fly into dollars

#11

Post by SideburnsOfDoom »

wucaworld wrote: post #7
LatteLazy wrote: post #4

Years of working to make our country worse have led to our country getting worse. Who could have foreseen that! The UK is in such a weird place right now. There are a group who legitimately want things to get worse because it serves their personal interest, and a group who think no matter how dumb we are, things will not get worse because we are the best country ever. They're conspiring to wreck the whole place. From…

Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high..…

> What is global, and why is created by bad policy ?

Every country has problems caused by the pandemic, by war, and by climate change. The energy issues in Europe this winter are downstream of that.

Only the UK has chosen problems caused by Brexit.

Re: Sterling collapses as investors fly into dollars

#12

Post by wucaworld »

zarzavat wrote: post #9
wucaworld wrote: post #7

Earlier quoted context omitted.

Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high..…

The UK has very unstable economic policy. Despite one party being in charge for the last 12 years, each prime minister has wrought radically different economic policies. Under Cameron was austerity, services were cut and much pain was endured to “get the deficit down”. Under Johnson we had an investment-based economic policy, and then under Truss we are seeing tax cuts for the rich funded by borrowing which is an eco…

Thanks for the insight. In Canada, things have been more consistent politically at least. Good point that the same party in power can still result in diverging directions. I don’t feel this as much despite changes in parties at the federal and provincial level over the last dozen years.

E.g. federally, big changes were relaxation of immigration, govt support for lower income earners and cannabis legalization. Provincially (Ontario) govt services like schools and healthcare are being starved, and privatization of previously public services is on the agenda.

Perhaps the water is being boiled slower than I can feel :)

Re: Sterling collapses as investors fly into dollars

#13

Post by [deleted] »

SideburnsOfDoom wrote: post #11
wucaworld wrote: post #7

Earlier quoted context omitted.

Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high..…

> What is global, and why is created by bad policy ? Every country has problems caused by the pandemic, by war, and by climate change. The energy issues in Europe this winter are downstream of that. Only the UK has chosen problems caused by Brexit.

[deleted]

Re: Sterling collapses as investors fly into dollars

#14

Post by throwawaylinux »

zarzavat wrote: post #9
wucaworld wrote: post #7

Earlier quoted context omitted.

Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high..…

The UK has very unstable economic policy. Despite one party being in charge for the last 12 years, each prime minister has wrought radically different economic policies. Under Cameron was austerity, services were cut and much pain was endured to “get the deficit down”. Under Johnson we had an investment-based economic policy, and then under Truss we are seeing tax cuts for the rich funded by borrowing which is an eco…

> under Truss we are seeing tax cuts for the rich funded by borrowing

Any reduction in government income is funded by borrowing for a budget that is not in surplus, which seems to be the default state of things these days.

And what's stupid about government reducing income and borrowing in a downturn?

Re: Sterling collapses as investors fly into dollars

#15

Post by cool_dude85 »

timonoko wrote: post #5

Pound/Euro is wobbling within regular limits. So this is Euro crisis, long overdue, because Eurocrats do not follow their own rules and use euromoney to save PIGS-countries.

This is happening because, 14 years ago, France and Germany intervened to bail out French and German banks by loading Greece with a generation of debt? That's one theory I guess.

Re: Sterling collapses as investors fly into dollars

#16

Post by cool_dude85 »

throwawaylinux wrote: post #14
zarzavat wrote: post #9

Earlier quoted context omitted.

The UK has very unstable economic policy. Despite one party being in charge for the last 12 years, each prime minister has wrought radically different economic policies. Under Cameron was austerity, services were cut and much pain was endured to “get the deficit down”. Under Johnson we had an investment-based economic policy, and then under Truss we are seeing tax cuts for the rich funded by borrowing which is an eco…

> under Truss we are seeing tax cuts for the rich funded by borrowing Any reduction in government income is funded by borrowing for a budget that is not in surplus, which seems to be the default state of things these days. And what's stupid about government reducing income and borrowing in a downturn?

>And what's stupid about government reducing income and borrowing in a downturn?

Government finances are not like your household's, reducing spending is exactly the opposite thing the government should do in a recession.

Re: Sterling collapses as investors fly into dollars

#17

Post by throwawaylinux »

cool_dude85 wrote: post #16
throwawaylinux wrote: post #14

Earlier quoted context omitted.

> under Truss we are seeing tax cuts for the rich funded by borrowing Any reduction in government income is funded by borrowing for a budget that is not in surplus, which seems to be the default state of things these days. And what's stupid about government reducing income and borrowing in a downturn?

>And what's stupid about government reducing income and borrowing in a downturn? Government finances are not like your household's, reducing spending is exactly the opposite thing the government should do in a recession.

I don't know what that has to do with what I wrote though.

Reducing revenue is also one of those things that conventional wisdom says a government "should do" during a recession, so I'm asking why it was stupid.

Re: Sterling collapses as investors fly into dollars

#18

Post by NoboruWataya »

timonoko wrote: post #5

Pound/Euro is wobbling within regular limits. So this is Euro crisis, long overdue, because Eurocrats do not follow their own rules and use euromoney to save PIGS-countries.

How does this follow? If it was a Euro crisis, then the euro would be down against sterling which would be stable against the dollar. That's not what we're seeing.

It seems more like this is a global crisis against which the US is better sheltered than most, possibly due to its geographical position, fuel reserves, strong military and more hawkish monetary policy.

Re: Sterling collapses as investors fly into dollars

#19

Post by Nextgrid »

wucaworld wrote: post #7
LatteLazy wrote: post #4

Years of working to make our country worse have led to our country getting worse. Who could have foreseen that! The UK is in such a weird place right now. There are a group who legitimately want things to get worse because it serves their personal interest, and a group who think no matter how dumb we are, things will not get worse because we are the best country ever. They're conspiring to wreck the whole place. From…

Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high..…

> the tax cut being proposed in the uk at least addresses #3 above

It doesn't address it in any meaningful way. That tax cut only benefits the significantly well-off while doing nothing about the lower classes.

In the lower class, this cut doesn't give you any further incentive to work (you're screwed and won't be able to afford your rent or energy bills regardless so may as well not even bother), and the upper class never really needed an incentive.

IMO, it shouldn't been the opposite - completely abolish tax on anything under 50k or so and make it up by taxing company profits higher.

Of course, you could say "fuck the poor" and not care about them as long as the "rich" are doing fine, but the problem is that a lot of "rich" stay there only because there's there's a steady supply of "poor" that buys their goods/services (not saying this in a bad way) - now if all those "poor" are too poor to have money for discretionary spending, a lot of businesses from the "rich" will no longer have any customers to stay afloat and close, leading to job losses, etc - furthermore businesses that serve those businesses will also see a downturn, etc - essentially a cascading failure, and this doesn't even mention the other downsides that tend to come with extreme, widespread poverty such as people resorting to crime as they're out of options.

Re: Sterling collapses as investors fly into dollars

#20

Post by wucaworld »

cool_dude85 wrote: post #16
throwawaylinux wrote: post #14

Earlier quoted context omitted.

> under Truss we are seeing tax cuts for the rich funded by borrowing Any reduction in government income is funded by borrowing for a budget that is not in surplus, which seems to be the default state of things these days. And what's stupid about government reducing income and borrowing in a downturn?

>And what's stupid about government reducing income and borrowing in a downturn? Government finances are not like your household's, reducing spending is exactly the opposite thing the government should do in a recession.

That is not correct.

Spending is the appropriate response when faced with a demand driven recession. This is a supply driven recession and reducing govt demand may not be a bad idea.

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