British Expats - Exchange rate rising

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Re: Exchange rate rising

Quote:

Originally Posted by Steve_ (Post 9550771)

The gold standard become obsolete for good reasons, because it restrained economic growth and the economic theory on which it was based was completely flawed, not least because it was impossible to determine accurately what each country's gold holdings were, there's a finite amount of precious metals in the world, etc. read up on it.

The gold standard ended because America was running out of gold and Nixon didn't like seeing all the gold from Fort Knox being shipped over to France.

It works well so long as you don't think that high inflation and loading up the next generation with huge amounts of borrowing counts as 'working'... because that's the direct consequence of Nixon ending the US dollar's convertibility into gold in the 70s.

Much of the 'economic growth' we've seen since then has been the consequence of borrowing huge amounts of money that future generations will be expected to pay back unless the countries that borrowed it default on the debts. Feeling rich is easy when you can borrow trillions of dollars against your grandkids' credit rating.

Re: Exchange rate rising

Quote:

Originally Posted by Steve_ (Post 9553259)

All currencies are backed by the Govt., the central bank is a Govt. institution, hence: "Bank of Canada" on our money.

For notes and coins yes. For credit (what the UK calls M4) - that's been brought forward from the future as debt. The central bank didn't issue it, it was 'created' by commercial banks based on how much people said their houses were worth.

(Honestly, I'd have no problem with this system if it wasn't so completely corrupt and fraudulent - the price of debt has been manipulated downwards for well over a decade now - probably a lot longer than that)

Quote:

Originally Posted by Steve_ (Post 9553259)

Which bank people? The money supply is the responsibility of the central bank. The reality is that money is just numbers on a piece of paper or in a computer, it has no real value in and of itself, it's all about trust. Back when there was barter, you trusted the person bartering with you was honest. Even when there were gold and silver certificates, you trusted that the gold and silver was there in the bank (and often it wasn't), 99.999% of people never checked.

Yes, that's how fiat started. The banks realized they could issue more certificates than they had gold and get away with it (even though it's fraud really)

Quote:

Originally Posted by Steve_ (Post 9553259)

Central banks can decrease the money supply as well as increase it, e.g. by increasing rates and they will no doubt in a couple of years time.

I doubt it. Governments can't afford to raise rates any more than the people can afford it if they do.

The only way rates will be raised is if the bond market wakes up and forces it upon them - should have happened already, hasn't yet, and I don't have any faith that it will. Hyperinflation or default are the only ways out of this mess imo.