Why a Weak British Pound Matters (theverge.com) 153
The British pound on Monday briefly hit a record low against the dollar, extending losses after Britain's new government on Friday announced a sweeping economic overhaul centered around tax cuts and deregulation. Citibank called the move a "huge, unfunded gamble for the U.K. economy." From a report: The pound slumped as low at $1.035 on Monday, breaking the 1985 record, and although it bounced up from those depths it remains down about 19 percent this year. The pound has also fallen against the euro, although not by as much. In other markets, yields on British government bonds hit multiyear highs, meaning that borrowing costs are rising steeply as the government prepares to issue more debt to pay for subsidies on energy bills and other policies.
What does the weaker pound mean for the British economy? The drop in the pound poses concerns, since a weaker currency makes imports more expensive. It also makes it more expensive for Britons to travel abroad, since their money doesn't go as far as it did before. British companies, many of which rely on materials imported from other countries, may raise prices to compensate for their higher costs -- putting pressure on inflation, which is already running near 40-year highs. [...] People and companies abroad buying goods and services from Britain could benefit from cheaper prices. And businesses in Britain that generate revenue elsewhere will earn more when that money is converted back into pounds. For Americans and others spending dollars or euros while traveling to Britain, their trips will be more affordable than they would have been even a few months ago. Further reading: Fed official warns UK tax cuts increase risk of global recession.
What does the weaker pound mean for the British economy? The drop in the pound poses concerns, since a weaker currency makes imports more expensive. It also makes it more expensive for Britons to travel abroad, since their money doesn't go as far as it did before. British companies, many of which rely on materials imported from other countries, may raise prices to compensate for their higher costs -- putting pressure on inflation, which is already running near 40-year highs. [...] People and companies abroad buying goods and services from Britain could benefit from cheaper prices. And businesses in Britain that generate revenue elsewhere will earn more when that money is converted back into pounds. For Americans and others spending dollars or euros while traveling to Britain, their trips will be more affordable than they would have been even a few months ago. Further reading: Fed official warns UK tax cuts increase risk of global recession.
So weak, they will have to rename it to the ounce (Score:5, Funny)
The pound is becoming so weak, they will have to rename it to the "ounce".
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A troy pound of silver is worth 207.96 British Pound sterling. We're well below ounces and may have to consider calling it a Gram.
Re:So weak, they will have to rename it to the oun (Score:5, Informative)
Gram is the wrong unit system. If you want to drop below and ounce the next unit of measurement is a "dram". 16 drams = 1 oz.
And if you need to go lower it's "grains". 7000 grains per 1 pound. (bullets and gunpower charges in ammunition are often still measured in this unit).
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They should have switched systems in 1971 for decimalisation.
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Originally, a Pound was based on the Tower Pound, 5,400 grains or 349.9 grams, so slightly lighter. Even by 1601-1717 it was down to 111.4 grams or 3.58 ozt so less then a quarter of a troy pound (12 ozt to a troy lb).
From table at https://en.wikipedia.org/wiki/... [wikipedia.org] which shows bouts of devaluing from the original 349.9 grams in 800 (in actual fact it varied and the 240D usually added up to less then a Tower Pound.
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English classes are down the hall, room 5.
Re: So weak, they will have to rename it to the ou (Score:3)
Shrink appointments are down the hall, room 16.
It's not just the pound (Score:4, Interesting)
There's a much wider force at work, many currencies are falling against the dollar - like the Yen.
But that's because the dollar is collapsing at a slower rate than the others. That will not last forever, probably not even very long - we are right in the middle of a massive bond and market meltdown.
I don't know how the UK will fair in the end, but at the moment the pound falling is the least of its worries, energy security should be top of that list (though a lower pound makes that worse too).
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Re:It's not just the pound (Score:5, Informative)
Another thing that's happening is that Liz Truss aka Maggie Thatcher II wants to pass a big tax cut ... which, by putting more money into people's pockets would be inflationary. In the middle of an inflation crisis. I think her and Erdogan must hang out together or something.
As usual, trickle down won't work and will only lead the British 1% making out like bandits while the people suffer with declining purchasing power. At least two people agree this will be a mess [marketwatch.com] and Truss' numbers should not be trusted.
Re: It's not just the pound (Score:2)
This is all part of the Tory Brexit plan to turn the UK in to a giant tax haven right off the shores of Europe.
Re:It's not just the pound (Score:5, Insightful)
Your paycheck is paid either by (A) some private company which was almost certainly founded by someone who had more money than average (and invested it in a risky venture because he wanted even more), or in public sector, which means it's paid for by government, that is by taxes, that is, guess what, we're back to (A). Similarly for 99% of other people. So, please tell me again how the fuck does "trickle down" not work?
Because rich people already have enough money to buy everything they could dream of wanting. Giving them more money won't incentivize them to spend more. It also won't incentivize them to do the hard work of expanding businesses by hiring more employees or investing in other resources because it's much easier to play the capital markets to focus on existing asset appreciation.
In contrast, poor people tend to spend whatever tax cut or credit is given to them. And because the economy (at least in the US) is primarily consumer driven, the employment and GDP impact of giving money to poor and middle-class people is both larger and more immediate.
Trickle-up works much better than trickle-down.
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Historically, it does incentive the rich to gamble more, usually creating a bubble that will pop. Look at Trump's tax cuts and the stock market, crypto and housing. Bush's, it was housing and Reagan's led to the dot com bubble.
OTOH, high taxes on the wealthy usually forces them to invest in real things like their businesses to avoid the taxes. Better to upgrade or pay your workers more then give it to the government.
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You mean the housing bubble that was created by the Clinton era housing loan reforms and started to inflate in 1998 immediately after the tech bubble popped and investors looked for someplace that would continue the tech sector gains 2 years before Bush took office? Like most bubbles it's expansion seemed small at first but was exponential, in this case as subprime loans and CDS's spread throughout all sectors of the housing market. But these things were not created when Bush took office but beforehand, and
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Yes, it is complex, interest rates, (de-)regulation all play a part.
Re:It's not just the pound (Score:5, Funny)
Strange, isn't it?
Rich people must be given more money, tax cuts, bonuses, salary bumps, to encourage them to work harder.
Poor people must have their benefits cut and be threatened with destitution to encourage them to work harder.
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Your paycheck is paid either by (A) some private company which was almost certainly founded by someone who had more money than average (and invested it in a risky venture because he wanted even more), or in public sector, which means it's paid for by government, that is by taxes, that is, guess what, we're back to (A). Similarly for 99% of other people. So, please tell me again how the fuck does "trickle down" not work?
Because rich people already have enough money to buy everything they could dream of wanting. Giving them more money won't incentivize them to spend more. It also won't incentivize them to do the hard work of expanding businesses by hiring more employees or investing in other resources because it's much easier to play the capital markets to focus on existing asset appreciation.
In contrast, poor people tend to spend whatever tax cut or credit is given to them. And because the economy (at least in the US) is primarily consumer driven, the employment and GDP impact of giving money to poor and middle-class people is both larger and more immediate.
Trickle-up works much better than trickle-down.
The notion is, tax rich people more to encourage companies and individuals to re-invest rather than hoard... Strangely enough this has worked in the past until someone farted out the idea of "trickled on" erm... I mean "trickle down" economics.
Golden shower economics (Score:2)
That's circular reasoning at its best. But even discounting your chicken and egg logic, you make the mistake of assuming that the rich risk there capital when they 'found' companies. Limited liability proves you wrong (and that's even before you get onto publicly traded companies, venture capital, etc, etc). Its only the relatively poor that have to risk their capital when they try and work for themselves.
Also please refer to it by its proper title, which is 'golden shower economics'
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Do you know how VCs work? Do you actually think VCs are investing their own capital?
Re:It's not just the pound (Score:5, Informative)
So, please tell me again how the fuck does "trickle down" not work?
If trickle down worked, companies wouldn't be throwing fits and pleading povery when the mention of raising salaries is brought up at the same time they're making record profits.
For reference. Graph 1 [imgur.com] and graph 2 [imgur.com].
Even the guy who pushed trickle down has come out over the last few decades and said it was a canard, a trojan horse [theatlantic.com] designed to give money to those at the top at the expense of everyone else. And he wasn't a fan of bank bailouts [businessinsider.com] during the last Bush term either saying they only truly benefited those at the top.
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"which, by putting more money into people's pockets would be inflationary. "
43% of the UK citizens do not pay any income tax, because they earn less than £12500, so they won't get anything in their pockets.
On the contrary, all the imported food and energy will become more expensive.
Re: It's not just the pound (Score:2)
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Another thing that's happening is that Liz Truss aka Maggie Thatcher II wants to pass a big tax cut ... which, by putting more money into people's pockets would be inflationary.
So, they should.... take money out of Brit's pockets? "We're going to take things away from you for your own good"? That kind of thing?
Yeah. Go on, tell Labour to run on THAT.
Re:It's not just the pound (Score:4, Informative)
So, they should.... take money out of Brit's pockets? "We're going to take things away from you for your own good"? That kind of thing?
Unfortunately, there are only a few basic, interrelated ways of fighting inflation: reduce the monetary supply, decrease demand for goods and services, and increase supply of goods and services. Government is not going to be able to increase supply of goods and services. Reducing the monetary supply, usually done by making borrowing more expensive, hurts, and can temporarily increase costs, at least for those who have to borrow. Reducing demand usually requires slowing the economy, which also hurts. But cutting taxes tends to increase demand, so tends to make inflation worse, and that hurts more.
Re: It's not just the pound (Score:2)
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The problem for the UK is that many people are already in a very precarious position when it comes to mortgages. Because houses are so expensive they ended up with massive mortgages that are close to the limit of what they can afford, meaning any increase in interest rates will push them over the edge.
The BoE is widely expected to raise interest rates to at least 6% in the coming year. For someone with a £200k mortgage, that adds an extra £600/month to their payments. The rates on mo
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Another thing that's happening is that Liz Truss aka Maggie Thatcher II wants to pass a big tax cut ... which, by putting more money into people's pockets would be inflationary. In the middle of an inflation crisis. I think her and Erdogan must hang out together or something.
LOL, what? Give people additional money, and a lot of it will be spent, but some people do still keep savings you know. Tax it off them and give it to f-ing politicians and you bet your ass they'll immediately spend it down to last penny.
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Tax it off them and give it to f-ing politicians and you bet your ass they'll immediately spend it down to last penny.
Good. Sounds like a plan
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You could cut an "out" from that statement and it wouldn't be any less true.
Re:It's not just the pound (Score:4, Interesting)
I thought it was a "given" at this point that there would be a global recession. I've been preparing for a good 5 years or so of high inflation and market shrinkage. It's an excellent time to invest, since you get high value for dollar and reap the harvest when the market shifts back, though you must have the means of sustaining yourself even while your investments suffer high market volatility.
I am also looking forward to the housing market crash that Deutsche Bank predicted for the end of 2023. I have been looking at relocating but prices are ridiculous right now, so a good crash like that will bring them back down to reasonable levels. Of course, this isn't good news for the many homeowners who bought high and are going to be looking at foreclosure and possibly homelessness...but....there really isn't anything that I can do about that (other than continue to support various charities throughout the recession).
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How do you prepare for a drop in housing prices?
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Prepare for a drop in housing prices by:
Sell while your house is still valuable.
Rent a place to live, instead of buying a new house.
Wait for the drop.
Stop renting and buy a new house nice and cheap.
Also you can prepare for a global recession more generally by lowering your luxury spending and save up the money, investing in bond funds since they are slightly less volatile than stock funds and are a stronger hedge against inflation than interest bearing accounts (though money in retirement accounts that will
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I would suggest that you avoid buying your old place back at the now-reduced price if it is being sold by the very person who bought it from you. That tends to get people dangerously mad.
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House prices will never go down in the UK, at least not in the foreseeable future.
Too many people got wealthy by owning property. No government will dare upset them by deliberately pushing prices down. The best we can hope for this they screw up and do it accidentally.
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Just for clarity, I didn't mean that I have spent the past 5 years preparing for a global recession. I meant that I expect the global recession to last for 5 years. I've only been expecting it since the pandemic money hand-outs.
And I don't mind if property values inflate again after I buy a nice new house. I just want there to be that sweet moment when everything is cheap, so I can pick up a nice one. Of course, me wanting this won't make it happen (if it would, I would feel all kinds of guilt over a de
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Ok that makes more sense... I agree, probably about five years.
Hopefully housing goes the way you think...
Supply-side driving inflation (Score:2)
Obviously governments benefit from some inflation, but not out-of-control inflation. They do have a strong incentive to bring it back under control and back down to a couple of percent a year which benefits government spending. But the problem is that normally inflation is caused by excess demand due to cheap money (excess money supply). But this does not seem to be the case at present in most economies and with a lot of staple goods. If lots of cheap cash was the primary inflationary driver, it would h
Re: It's not just the pound (Score:2)
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But that's because the dollar is collapsing at a slower rate than the others. That will not last forever, probably not even very long - we are right in the middle of a massive bond and market meltdown.
It's because the federal reserve has made very clear that they are willing to do what it takes to stop inflation.
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What is really damaging the Pound is borrowing. The government has given massive tax cuts to the rich, and funded it with borrowing.
Governments normally borrow money for capital investment, so the money goes into something tangible that they own or for some purpose that generates more tax revenue. That's fine, governments can borrow cheaply and the money is converted to an asset or comes back later with interest.
Borrowing to give free money to the rich is the ruling Tory Party funding their next election ca
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You need to browse at -1 so you see this post [slashdot.org] which the GP was replying to.
After you've been on Slashdot a bit longer these things will become second nature.
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Actually this post [slashdot.org]. Oops!
Export controls will do that for you! (Score:3)
Except for the Russian ruble which is hitting a 7 year high against the dollar. How odd.
Well, if you penalize or forbid people from exchanging currency to Euros or dollars, yes, that will raise your exchange rate.
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Europe is STILL paying Russia in rubles for energy. Even today.
Sure, nobody else will take them. But Putin can't refuse to take them. It's a plan with no drawbacks. Soon Russia will have all of their money back, just in time for it to be worth nothing.
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LOL true point, Russia is literally hurting themselves by insisting being paid in rubles.
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LOL! You're so fucking stupid. The dollar is doing great, but because there's a democrat in office, you have to pretend that everything is in free fall!
Sure. And the fact that the currency its value is defined in relation to, the Euro, is being ravaged by war in Ukraine and the resulting energy crisis has absolutely nothing to do with that, noooo sir! It's absolutely Bidet's genuis, I tell ya!
Everything vs. the USD (Score:5, Interesting)
The Fed is ahead of almost all the other central banks on raising rates to fight inflation. If you look at USD vs. pretty much any major currency, they're all down. At some point those other countries will have to raise rates to fight inflation too. A few years ago we were talking about "competitive devaluation", in which there was a concern that nations would lower their rates too much in a vicious cycle of competition to stimulate their economies at the expense of other nation's trade. Now the tables are turned!
I haven't studied the concept of competitive *re*-valuation. There might be some interesting reads out there...
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I haven't studied the concept of competitive *re*-valuation. There might be some interesting reads out there...
"A concept where economists congratulate themselves for making their exports more expensive by simultaneously reducing the wages of the entire country."
Somehow it's not a big vote getter.
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Re: Central banks just play-fighting (Score:2)
Brexit? (Score:2)
Given a number of countries are suffering economic issues right now, due to the extended impacts of Covid policies (Japan & China), the energy crisis due to the war in Ukraine (Europe in Ukraine), what are the factors impacting the UK? Is it the same issues as the rest of Europe, or at the elements of Brexit to throw in the mix?
Re:Brexit? (Score:4, Informative)
The primary "issue" is that the US is taking measures to stop inflation, whereas the Pound and Eurozone are not. Note that the Euro and Pound are within their historical range to each other.
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That's not entirely true. The Eurozone has done a lot to curb inflation by securing its energy supplies and keeping costs down, e.g. a windfall tax on energy companies.
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Isn't the entire problem Germany is facing with energy exactly because they did not secure their energy supplies?
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Isn't the entire problem Germany is facing with energy exactly because they did not secure their energy supplies?
If I understand rightly Germany was dependent on Russian gas and having stopped its nuclear reactors, it wasn't left with much beyond coal and renewables. France might be able help out through excess capacity in its nuclear plants, but ironically it shows how important nuclear is, if countries can't curb their energy demands.
So, I'd agree Germany's energy plan leaves a lot to be questioned.
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They also had gas storage facilities for cases of emergencies. A few years ago Russia took over management. Somehow by January of this year, they were empty.
https://www.ft.com/content/576... [ft.com]
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That's a very superficial view. The USA and Europe are taking relatively equal measures at battling inflation. The USA is simply suffering from a very minor rise compared to the USA, largely insulated from the shit going on in Russia and instead dealing with exclusively the post COVID issues.
If the USA has the same inflation as Europe you can bet your kidneys they would be reaxting identically to Europe because quite fundamentally controlling inflation isn't a singular goal or end game. Europe can solve inf
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I'm paying $1.10/kWh for electricity. How much has it risen over in the USA? That's just one example of differences driving inflation.
That is a result of not controlling inflation.
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The primary "issue" is that the US is taking measures to stop inflation, whereas the Pound and Eurozone are not. Note that the Euro and Pound are within their historical range to each other.
The UK and Eurozone are still pretty closely linked (and will always be, despite what Brexiteers masturbate over) so negative or positive affects on one currency affects the other, however we've relied on low interest rates since the GFC, so both the ECB (European Central Bank) and BoE (Bank of England) who pretty much have a similar job to the American Federal Reserve are very reluctant to raise them.
I think it's a case of the Americans managing to avoid the problems, but you've had a higher base intere
Taxes slashed and more spending w/ high inflation (Score:4, Interesting)
Their new prime minister has recently announced she plans to both slash taxes and increase spending https://apnews.com/article/inf... [apnews.com] which are both genuinely dumb things for a government to do during a period of major inflation as increasing the money supply will only make inflation worse. Plus they'll be borrowing to fund all this at interest rates that are quickly increasing to combat the inflation thus making this quite expensive to boot.
Those with money recognize this as a problem and are abandoning anything they have that's tied up in the value of the pound.
Far Right Government (Score:2)
There have been numerous articles in the news about the prospect of a far-right government in Italy. What nobody seems to have commented on is the similarities between this and the current UK government.
Re: Far Right Government (Score:5, Insightful)
I think equating the British Conservatives, the party that led the UK through WWII when they fought Naziâ(TM)s and Fascists with the Italian party that has its roots in an actual fascist party / Mussolini is just ridiculous.
The British have a right of centre government that probably looks left wing when compared to the American Democratic Party.
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This Government banned protest and is trying to remove human rights from the constitutiion. They illegally closed Parliament to stop it having a say on Brexit and attacked the judiciary for calling them out on it.
They believe in the childish notion of trickle down economics. One minister literally shorted British bonds, so great was his faith in his Chancellor.
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It's a completely different party. Things had already changed a lot since WW2, but between 2015-2020 the Conservative party was hollowed out and replaced with something akin to the BNP and UKIP. They purged a significant number of their MPs and replaced them in 2019.
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I think equating the British Conservatives, the party that led the UK through WWII when they fought Naziâ(TM)s and Fascists with the Italian party that has its roots in an actual fascist party / Mussolini is just ridiculous.
Like all political parties, their ideals and policies changed over time. The Conservatives of Churchill's days are a very different kettle of fish to the Conservatives of today. The old conservatives were mostly fiscal, the current crop seem to be more interested in creating fake culture wars whilst being the near total opposite of fiscal conservatives. They are probably closer the likes of Mussolini than they every have been in their history.
The UK did have a fascist party back in the 30's, created by o
Re: Far Right Government (Score:2)
The UK government has actually capped energy prices for about 2 years - actually longer than official Labour policy.
And yes, they have cut the top rate of tax as well as reversed some planned tax increase. And also legislated to remove the cap on bankers bonuses. I am quite flabbergasted at those policies. But that does not earn them comparisons to actual fascist and far right parties. They are returning taxes to pre-pandemic levels (largely, except for the top rate).
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Completely untrue. The rise of far-right governments throughout Europe is constantly talked about in the news.
Brtitish Museum (Score:5, Funny)
Well, now is the best time to visit London if you ever want to see the British museum. Not only is it the cheapest time to visit, Putin keeps on threatening to nuke the UK, so it might not be there next year. Visit now, while the exhibits are not charcoal-colored! Except the charcoal drawings, they're already charcoal colored.
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Ah, the British Museum, where we keep all our stolen loot. Come see our shameful past, as told by the things we plundered from the places we colonized.
Seriously though, if you want to visit the UK... Don't, go to the south of France instead.
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Better to be looted and stored in a museum than looted and stored in some rich person's cellar (like what happened to half the dead sea scrolls)
Pound vs. Dollar vs. Euro? (Score:2)
The pound has also fallen against the euro, although not by as much.
There's something I dont fully understand.
How do indirect exchange rated work?
Since the Euro has it's own exchange rate against the dollar, how could the pound-to-euro rate be different than the pound-to-euro-to-dollar rate?
Wouldn't indirect exchange rates always be the same as the direct ones?
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You're assuming that there's some universal link between all (or any) currencies, like, "If a > b and b > c, then a > c", or even "a = a". There aren't any.
Any currency is ultimately only worth what someone will pay for it with another currency (or non-currency) at any given point in time, and there are a practically infinite number of variables at play.
Re:Pound vs. Dollar vs. Euro? (Score:4, Informative)
The Same Winners (Score:5, Informative)
Here's my understanding of weak vs. strong currencies and I'll use the U.S. dollar ($) for simplification.
Scenario 1: If the dollar is strong, then dollar holders can import more stuff from markets based on weaker currencies. Dollar markets see shrinking exports.
Scenario 2: If the dollar is weak, stronger currencies can import more stuff from dollar markets. Dollar markets see growing exports.
Scenario 1 is good for importing and bad for exporting. Strong dollar markets can bring more stuff in at a better value but have reduce exports. To me this is good up front for consumers, but bad in the log run for exporters of things like metals, computer chips, grain, lumber, cars etc. So, if a dollar stays strong "too long", exporters in dollar markets will find a way to move production to weaker markets or simply reduce jobs as long as necessary if not forever.
Scenario 2 is true in the opposite.
In the end, it looks like, the average person is up a creek whichever side their currency is on. A strong dollar is nice until jobs start to disappear so companies maintain or increase profits, growth etc. Or a weak currency is nice for jobs stability and/or growth until the average person sees diminished buying power or reduced supply, i.e. stagnation or subsistence income.
Again, this is my simple understanding.
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That's it, but remember exports/imports usually account for 10%-20% of the economy. So minor fluctuations can hurt some industries but not be felt generally.
A strong dollar is nice until jobs start to disappear so companies maintain or increase profits, growth etc
This is exactly why the federal reserve has said they intend to strengthen the dollar until it starts hurting the unemployment rate. No reason to keep it weak until then.
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It is interesting to see how this unfolds.
A lot of the US exports have pricing power today due to Ukraine war shortages - petroleum/gas, food, weapons. The US is exporting inflation to other counties via these goods.
On the other hand, imports are cheaper and it's helping with inflation internally.
Most of the inflation currently being experienced is due to supply-side problems. (There is a real-estate and stock market bubble, but it is imploding or about the implode.) High interest rates don't fix the supply
Who is to say what the real value is? (Score:3)
I've always been amazed by the former, over-the-top valuation of the GBP. It has always been in rough parity with the Euro in purchase power terms. Nothing fundamental I'm aware of of justified the higher valuation. It makes sense that it's more aligned with USD, EUR and CHF. I think the new levels are normal. It also helps with British competitiveness: pressure on lowering imports, increasing exports and producing more at home. Everybody will get used to it. It'll be a bit more expensive to go abroad, and it'll be less insanely expensive for foreign visitors to spend time in the UK.
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Lol, what exports?
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I've always been amazed by the former, over-the-top valuation of the GBP. It has always been in rough parity with the Euro in purchase power terms. Nothing fundamental I'm aware of of justified the higher valuation.
It just means that GB hasn't printed as many pounds as EU has printed euros. You can get pretty near any exchange rate you want by removing or adding currency.
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The UK has a large trade deficit with the rest of the world, hence the artificial overvaluation.
"New" British government? (Score:5, Insightful)
They've been in power 12 years. Yes, there have been some staff changes but it's been the same bunch of arseholes all along.
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Disagree. Over the 12 years they have become increasingly more arseholish. A lot of the primary decision making lies in the pouring minister (more of a president really, the UK political system should be embarrassed to call itself a representative democracy).
The same party may have been in power but the leaders are progressively more radical and dangerously stupid.
Learn from Gandhi (Score:2)
India overtook Britain in GDP and it's now the fifth largest economy. It has been the third largest by PPP for a long time now. But this time it's exchange rate dollars.
Orchestrated fail? (Score:2)
The actions of this government are so obviously stupid that I wonder whether this is an orchestrated fail to get Boris Johnson back in. Many conservatives see Boris as the only chance of winning the next election, and the way that the PM is selected by Conservative party members (mainly elderly rich and white) means that he would probably be reselected - many said that they wanted to vote for Boris last time even though he wasn't running.
Unless the current government really is stupid enough to think that t
The controversy (Score:2)
The argument in favor of the Truss policies goes like this: UK debt, though high by historical standards, is not unsustainable, and the required borrowing will not make it so. It will remain well under 100% of GDP. So whether or not the plans, tax cuts and energy subsidies, are correct, they will not lead to disaster.
In addition, economics, its argued that if gas prices fall the cost of the subsidies will be much lower than is currently forecasted by the pessimists.
In addition, politics, its argued that
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However the difference from the ERM debacle is that there if they persist, and simply allow the exchange rate to go where it will, there is no public defeat associated with any particular level. Whereas the disaster of the ERM was not so much the fall in sterling, it was in the original commitment to keeping it at a certain value. So whatever the merits of any particular level, the exit was seen as a defeat. As indeed it was. It very publicly exposed what an error it had been to join in the first place.
I'm not sure about that. I think £=$ and £=€ are both thresholds that the public will react to if crossed.
Joining the ERM wasn't the mistake. Joining it when and how we did was the mistake, largely caused by Thatcher getting pissed off at being pressured by her colleagues to join.
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Don't knock it until you try it. Not the Bud Light though, that's awful. Also, we buy meat by the pound. Other stuff too, I guess.
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Typically these foreigners have never visited the US and everything they know about it comes from their willing consumption of our entertainment combined with their overactive imaginations.
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Shipping from UK or EU to US might make buying some fixed price electronics worthwhile. I already bought some music gear that is cheaper from Thomann in Germany than in any of the US distributers, even when shipping is considered.
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Thomann has honored a return every single time I've done it.
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Well there's a subset of nerd that just likes to complain about things so that part of the post is just for you.
For the rest of us, since when is significant events in economics not something nerds would be in to?
Re:Currency exchange rates 101 (Score:4, Insightful)
Nothing. The exchange rate isn't even the point of this story. The actual lede is the "Huge Unfunded Gamble" FUD. Leftists hate tax cuts and regulatory rollbacks, so today the bankster sourced quote is being smuggled in under whatever headline is convenient, ricocheting around the leftist interweb echo chamber, of which Slashdot is a small, dusty corner.
Typical ignorant comment by the poor at listening and quick to speak. It is not the left that is actually upset about this (though they are happy to seize a political opportunity), it is the fiscal conservatives. For Britain's left wing party Labour, the removal top tier tax rate cut is political manna from heaven. It also gives them a chance of seizing the mantle of being the fiscally responsible party, something which the Conservatives have carried since the 1970s.
The ones who are really upset are the money markets, mainly because they believe this is unsustainable given the UK's 99.6% debt to GDP ratio [ons.gov.uk] and voting with their cash. It did not help that the government refused to publish an economic forecast to go with this mini-budget. Now of course it could be that the markets are wrong and that this will stimulate growth enough to make up for the reduced revenue, however given the issue that a lot of this recession is caused by external price factors and it looks like China is about to burst a property bubble then this may take some time to happen.
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Put the bong down. The reason the ruble is up is because oil and gas prices are up and Russians cannot buy foreign good very easily any long. Their economy is sick, but not the oil and gas sector. It's their balance of payments that is keeping the ruble strong, i.e., gas and oil and the fact they cannot buy much foreign stuff because of sanctions. And their economy is contracting quite a lot and will in the future as well.
Re: Strong ruble (Score:5, Informative)
The Russian ruble is no longer a freely convertible currency. The Bank of Russia has put restrictions on it, and European and American central banks aren't buying rubles. The numbers you're quoting are completely made up by Russia and everyone knows it.
https://econbrowser.com/archives/2022/03/the-ruble-convertible-no-longer [econbrowser.com]
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Europe is still buying energy from Russia using rubles, even today: and China is too
Him: Ruble is not convertible
You: But Russia is taking it!
Me: *eyeroll*
You are being lied to and do not want to listen.
Then STFU and it gets better
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Re: Lower value has a positive (Score:2)
Thatâ(TM)s all very well when youâ(TM)re at the bottom of the pile and donâ(TM)t import anything. The UK has a lot of export industry that relies on imports, often from places like China, so their supply chains costs have gone up anyway.