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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

#371

Post by theGnuMe »

seibelj wrote: post #78
kentrado wrote: post #15

Earlier quoted context omitted.

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 hav…

You are experiencing the rot of failing economy in real time. The only solution is useful, productive enterprise - this is how functional, successful societies operate. There could be other paths there, but the most sure bet is to unshackle capital and let it invest freely.

You need educated, healthy workers as well. That takes government investment.

Re: British pound hits record low against the dollar

#372

Post by rdtwo »

kypro wrote: post #360
rdtwo wrote: post #350

Earlier quoted context omitted.

Can’t you just sell now before markets adjust or are you underwater already? The sooner you accept the loss and bail the more likely you are to come out in one piece.

It's something we're thinking about. It's difficult though because we're in the middle of redecorating so the house isn't really in a sellable state right now. Plus selling now out of fear that rates or house prices might continue to move against us and rebuying later would guarantee a loss that might not be necessary at this point. Generally selling your home every time you fear that rates and house prices might mov…

Currency devaluation is going to kill your (maybe literally). If you are getting paid in British pounds everything is going to go up extremely. So fuel, groceries etc will go up, and then interest rates will have to follow because there is an expectation of further devaluation that interest rates have to account for.

I realize selling now and taking a huge loss is not something that seems feasible but it’s worth trying to understand what adverse scenarios look like. If you truly can’t pay and the house gets reposesed what is the process? What are the consequences? Can you delay it for long enough that the system gets bogged down with other people getting foreclosed before you? Try to think of this like you are a corporate CEO. You need to position yourself into such a scenario that you limit your losses if things go against you and know when you walk away.

Re: British pound hits record low against the dollar

#373

Post by fzeroracer »

seibelj wrote: post #355
fzeroracer wrote: post #81

Earlier quoted context omitted.

No, what they've been enacting over the past few decades with the continued move towards privatization and destruction of public services. Like they've been doing what you've suggested for decades now. The 'downward spiral' you call out is because they're following your plans to a T. Cutting taxes and regulation, privatizing industries etc. So to reiterate my question: At what point would you have to call that off an…

The NHS is a disaster and the reason isn't because of "privatization" - it's because on average people don't want to work a job where they need to be a saint. Highly skilled doctors and nurses get paid more, get respected more, and have more agency working outside of government-run agencies. Average people who enjoy cushy, do-nothing government jobs love it when government expands, but unfortunately the work product…

Right so we've established then that there will never be a point where too much privatization becomes an issue in your argument. If something fails then it's because it wasn't private enough. At least that's what I assume since you continue to fail to answer my question.

And you saying the NHS is a failure because it's not private enough is absurd, because there are plenty of private health institutions throughout the world that don't have this issue. It's almost like the NHS has been slowly being strangled through the way classical privatization works: Remove funding, make it worse over time so that the populace things privatization works better and then gut it and replace.

Re: British pound hits record low against the dollar

#374

Post by illiac786 »

Veen wrote: post #281
origin_path wrote: post #274

Earlier quoted context omitted.

The actual move that will destroy public finances (even more) isn't the tax cuts for the 'wealthy', that's of relatively minor impact. The fiscal nuke is the energy price cap. The cost of preventing local energy prices from going over real wholesale prices is likely to be astronomical unless global gas prices fall significantly.

Fortunately, it appears wholesale gas prices are falling quickly. If the trend of the last couple of weeks continues, the energy price cap will be significantly less expensive than predicted (although there is no guarantee it will continue to fall). https://tradingeconomics.com/commodity/eu-natural-gas And yes, removing the higher income tax band will have little impact on the economy overall.

>If the trend of the last couple of weeks continues

In the current volatility, which is lasting since a year now, a trend of a couple of weeks means absolutely nothing in my view…

Re: British pound hits record low against the dollar

#375

Post by sloucher »

kypro wrote: post #361
sloucher wrote: post #339

Earlier quoted context omitted.

> I believe this is actually the fastest rise in rates ever. Why do you believe that? https://www.propertyinvestmentproject.co.uk/property-statist...

Mortgage rates I mean. The base rate is still far behind the curve. Mortgage rates move with market expectations and those have skyrocketed over the last 6 months. Base rates haven't kept up with recent moves. I believe you could still get mortgages for under 2% at the start of the year. After this move in markets mortgages under 5% are unlikely. Also, none of these stats ever adjust for affordability. People like to…

I still take issue with the idea that a rise of 3% is unprecedented. I speak as someone who purchased my first property right before the ERM crisis and saw my mortgage payment almost double.

Also, for a long time, 100% and even 105% mortgages were common. I remember that when property prices nose-dived, we had people on TV being interviewed and complaining that they were "now in negative equity" as though that were something that had been done to them. These people started in negative equity by taking out a loan for more than the value of the property at the time of purchase.

With all that said, you're 100% correct that higher rates are going to cause real pain now, just as it did then. I don't accept that it's going to cause unprecedented pain, because to do so is to dismiss the very real problems that many many people had back then.

PS. Your strongest "unprecedented" argument would have been that the percentage increase in rates is bigger than ever before. 5% is 250% of 2%, whereas 15% is "only" 200% of 7.5%. But then it's easy to grow hugely when starting from a very small baseline.

Re: British pound hits record low against the dollar

#376

Post by candybar »

spaceman_2020 wrote: post #359
candybar wrote: post #330

Earlier quoted context omitted.

You're being far too charitable here - the idea that Krugman has a history of being wrong has nothing to do with anyone trying to evaluate his track record in an objective manner, but everything to do with those who disagree with his political viewpoints trying to take him down a notch, especially to counter his stellar academic career. This is of course silly - Krugman is obviously highly knowledgeable about economi…

If Krugman doesn’t want people to judge him by his forecasts and predictions, maybe he should stop making them, especially on a widely read public platform? That seems only fair to me. If he doesn’t want his predictions to be judged by lay people, he can do what most academics do and stick to writing for their peers.

This is a complete non-sequitur - Krugman isn't here complaining about him being judged. And this is a strange reply given that you do not seem to have the ability to correctly judge Krugman. As I had mentioned, GBP/USD has hardly moved since Krugman's tweets, yet you came here to talk about how Krugman is consistently wrong.

Re: British pound hits record low against the dollar

#377

Post by seibelj »

theGnuMe wrote: post #371
seibelj wrote: post #78

Earlier quoted context omitted.

You are experiencing the rot of failing economy in real time. The only solution is useful, productive enterprise - this is how functional, successful societies operate. There could be other paths there, but the most sure bet is to unshackle capital and let it invest freely.

You need educated, healthy workers as well. That takes government investment.

The left despises monopolies in business - they constantly hunt it out and pillory businesses that engage in monopoly activity.

The left worships monopolies in education - all education must go through the government and indoctrinate children accordingly.

I am fine with the government investing in education. But the government should give tax money directly to parents to allocate to the schools of their choosing. Otherwise monopoly takes hold

Re: British pound hits record low against the dollar

#378

Post by DanBC »

seibelj wrote: post #355
fzeroracer wrote: post #81

Earlier quoted context omitted.

No, what they've been enacting over the past few decades with the continued move towards privatization and destruction of public services. Like they've been doing what you've suggested for decades now. The 'downward spiral' you call out is because they're following your plans to a T. Cutting taxes and regulation, privatizing industries etc. So to reiterate my question: At what point would you have to call that off an…

The NHS is a disaster and the reason isn't because of "privatization" - it's because on average people don't want to work a job where they need to be a saint. Highly skilled doctors and nurses get paid more, get respected more, and have more agency working outside of government-run agencies. Average people who enjoy cushy, do-nothing government jobs love it when government expands, but unfortunately the work product…

> The NHS is a disaster and the reason isn't because of "privatization"

You're in luck. Current UK government believes in privatisation of public services, massive tax cuts, and funding those tax cuts by massive cuts in public spending.

They've released one mini-budget, and that was so bad they crashed the UK economy. The pound is at the lowest it's been in decades; the Bank of England is taking emergency measures to try to stabilise the economy

Almost everyone describes this as a disaster, and even traditionally right wing fiscal sources are saying we need to adequately fund public services and those need to be paid for by some kind of taxation.

There's a reason you don't hear much about purely private healthcare: where ever it's tried it fails. In England we have private provision of private services, and these serve a very narrow niche where people are either treated for minor things, or treatment is begun and then they're discharged back to the NHS when their money runs out; we also have private provision of NHS services and that fails because they can't provide the service for the money available or because they're just terrible (see countless CQC reports).

Re: British pound hits record low against the dollar

#379

Post by roamerz »

seibelj wrote: post #77
roamerz wrote: post #28

Earlier quoted context omitted.

That’s only true if there is a balanced budget law that said government needs to comply with. The government here in the USA has been redistributing money here for ages that is not tied to taxation.

USA is a special case, with the dominant global reserve currency and military force, we have the special privilege of printing money that everyone needs. The UK hasn't been that since Bretton Woods

I don’t see how this is a privilege. It it nothing short of theft of money from taxpayers. People are saddled with the debt of others before they are even born.
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