Re: Exchange rate rising
 

But just think of how much of an economic boost there'll be from all that police overtime and the construction jobs in the rebuilding :).

Re: Exchange rate rising
 

Huh? Southern europe would still be in the shit and the UK would have to help bail it out. The euro might well have been stronger on average, but that doesn't mean the UK should have joined it and it would be in a weaker position now if it had. Staying out of it was the right thing to do as:

1 - Control of your own currency is extremely important for obvious reasons.

2 - It's very apparent that a single interest rate cannot apply to the whole of europe when the various economies within it are running at different speeds.

3 - Why should the UK pay for problems caused by Greece?

Re: Exchange rate rising
 

You guys should watch http://www.debtocracy.gr/ . The only people to profit from the Euro were the frog's, german's, ECB and IMF. The Greeks and other places were well and truly done over and some of Alan's reasons above come into play.

Re: Exchange rate rising
 

I'm not saying the Euro is all sweetness and light but the problems facing the EU right now would be less if the UK had been in it.

Like I said, the largest UK trading partners the UK has are all in the EU, the UK has still had to help bail out the Irish banks anyway because of all the UK assets held there. If the UK were in the Euro, people would be less worried about Greece defaulting for example. All those economies are interconnected anyway, if Germany bears the burden for bailing out Greece then that hurts the economy as a whole as Germany has less money to spend generally speaking.

Depends which interest rate you're talking about, bond rates are still set by member states. And I don't think it is "apparent" actually, the basic problem with the Euro is that it was a halfass measure, there hasn't been enough effort put into economic convergence. If Greece hadn't issued all kinds of dodgy debt in the first place to meet the Euro entry criteria, then this would not have happened.

You cannot look at pound sterling as some sort of fiscal island away from the Euro, because the UK is surrounded by Euro member states. It is directly affected by what the ECB does and says, like it or not. It's like when Switzerland didn't join the EU, they still joined Schengen and basically have to adopt a lot of european directives anyway, but they get no say in them. Ditto for Norway.

I think when this economic period is over the problems with the Euro that everyone glossed over will have been largely addressed, e.g. by issuing Eurozone-wide bonds and enforcing the entry criteria more strictly, having a proper strategy for convergence, etc. - note that under the current European treaties, all EU States HAVE to enter the Euro, the only exceptions are the UK, Denmark and Sweden who negotiated exceptions (and the Danish Kroner has a largely fixed rate against the Euro anyway). So all the new member States in the east etc. MUST join.

Eventually in the not terribly distant future pretty much the whole of Europe will be using the Euro (certainly all countries with a population in excess of a few million) and the UK will be the odd man out. Not using the currency will be a major problem for exporters and the City.

Re: Exchange rate rising
 

The reality is currency investors do.

Britain enjoys the benefits of trade with the EU whilst still retaining the ability to set it's own interest rates. Yes it has had to help with the bail out- but atleast it has been able to persue it's own economic policy away from the ECB and IMF.

When the Euro struggles the pound fares well and vice versa. The "hot money" is flowing back into the UK and this has helped raise the £ versus the CDN $.

Re: Exchange rate rising
 

So?

Rates are offered by member states, but it's the bond market that sets them when bonds are bought and sold. And I was talking about consumer interest rates, those ones that affect peoples spending in the real economy.

Of course it's affected, but control of your own currency allows a government to respond to what the ECB does. Within the euro member states have no such option.

When do you think that will be then? We are four years in and nothing has been fixed. I wouldn't be surprised if the euro doesn't collapse before this is over.

Actually controlling the value of your own currency is a competitive advantage not a disadvantage. You can use wage arbitrage to price under the market. Ask china if not being in the euro hurts it's exports;) What you mean is that not being able to trade freely with europe will hurt exporters; which currency they trade in is irrelevant.

Ultimately in a fiat money system, handing over control of the value of it to somebody else just allows them to steal all your wealth. It's ill advised.

Re: Exchange rate rising
 

Because, uh, the people of the EU don't want 'economic convergence' and the populations of the spendthrift states are more than happy to go out rioting if the EU 'elite' try to force it on them.

This is the basic problem with the whole EU, not just the Euro. It's not something that the people want, it's something being imposed on them from above with the intention that if they start on a low heat ('No, joining the EEC won't require giving away British sovereignty') they can just keep boiling the water and the frog won't notice until it's too late.

Re: Exchange rate rising
 

Hey, beggars can't be choosers, it has been as low as 1.48 in the last 2 years. I am grateful for anything over 1.60 at the moment.
Although it doesn't stop me dreaming.........

Re: Exchange rate rising
 

Make the most of the pound's giddy new heights, it wont last long.

Pretty no-nonsense interview with Jim Rogers here, seems to be right on the money (so to speak :o).

Re: Exchange rate rising
 

I agree with this guy in principle about the moral and sensible basis for the strategy of letting people who made the bad loans take the loss for it. That should generate a climate in which responsible lending is the only thing that happens and irresponsible lenders and borrowers are penalised heavily by having to take the full backlash of their imprudent decisions. But in reality, we all know that the potentially most lucrative investments and loans are by their very nature the most risky and so there will always be a temptation to indulge in riskier ventures for the greater and easier rewards they can yield. The banks in this country played that game because in the end they knew that they couldn't be wholly left to carry the weight of their losses because it wasn't just about them - it would have had an intolerable impact on their investors which means ordinary people like you and me, not just the super-rich. Governments have a responsibility to their people to protect them from this sort of thing and the banks knew that, so they played fast and loose with investors and savers' money.
When the loan is between countries and the borrower struggles to repay, you are just passing around the problem by making the lender take the full flack. They then start measures such as quantitative easing or they borrow like mad to balance their books and end up defaulting and the whole thing goes round and round. Take the example of the discussion over whether Greece should be bailed out or left to default - there are pros and cons both ways for their financially associated countries and knock on effects that will be felt more widely even than that whichever route is taken.
Any national economy's strength is relative to the global situation. We are all intertwined now and the financial stability of one country is inextricably linked with its import and export markets and financial dealings in terms of lending and borrowing abroad.
While I am sure that this man knows a great deal more than me about economics (which, quite frankly, wouldn't be particularly hard!) predicting the money market fluctuations and economic trends is extremely difficult for anyone, even experts and the whole world economy is so messed up at the moment that I am not sure anyone really knows what is going to happen next.
I may not know much about economics, but I do know one thing; if anyone does know what the future is going to bring, they will certainly be keeping it to themselves in order to make a killing on the markets when their predictions come true, not blabbing about it in the press:D.

Re: Exchange rate rising
 

Please please please use more space between paragraphs :fingerscrossed: :D

Re: Exchange rate dropping
 

After the second night of trouble. A drop to 1.56. For every action there will be a reaction.

We exchanged the day after Osama was removed from the world. The rate went up to 1.60.

Re: Exchange rate rising
 

The problem I have with Jim Rogers is that he's always talking his own book.

He is often right though, and he is bang on here when he talks about what the problem is. No matter what the level; bank, government etc bailouts = stealing.

If you invest in something, whether as a corporation, hedge fund or a so-called ordinary person then you shouldn't get the right to steal from others when your investment turns to shit. If you've get greater than the government guarantee on deposit in a bank and it fails, well you should lose anything above it. If you are a shareholder, or bond holder, well tough, you should be losing all your investment not stealing from me to cover your loss.

Re: Exchange rate rising
 

OK!






I'm not sure why, but OK!;)

Re: Exchange rate rising
 

Makes

it

easier

to

read. :thumbup: