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fireflybob
29th Dec 2008, 16:30
Is this really what uk plc is worth now?

Pound hits new low against euro (http://news.bbc.co.uk/1/hi/business/7802981.stm)

Stockpicker
29th Dec 2008, 16:32
Wait till Euroland plc starts feeling the recessionary bite.

Der absolute Hammer
29th Dec 2008, 16:53
I wonder what the effect on UK Gilts and credit default swap insurance would be were GB to take Britain in to the €zone once actual parity is achieved. Maybe the £ is so weak and the € so strong as a result of the fact that the UK Treasury has bought long on €s to cover their own default in the engineered eventuality of currency parity?The £ in your pocket really will be worth 30% less!

ChristiaanJ
29th Dec 2008, 17:03
Isn't there a recent thread about this already?
I remember using 3/2 and 2/3 for a quick-and-dirty guesstimate conversion not that long ago, then early this year it was about 4/3 and 3/4, then dropped to 5/4 and 4/5.
Now no conversion needed anymore....

CJ

The_Banking_Scot
29th Dec 2008, 17:52
Hi,

At lunchtime in my local post office in Edinburgh

£1= 0.98€

Regards

TBS

BenThere
29th Dec 2008, 17:58
You can spend your pounds in the US, Canada and Australia and still get pretty much fair value.

Fareastdriver
29th Dec 2008, 18:03
The problem is not so much the Euro but all the other currencies in the world. A quick scan on xe.com comparing exchange rates now and six months ago reveal that the GBP has lost about 20% world wide. There are exceptions, Zimbabwe, Iceland and surprisingly, Australia, though it is catching up fast. We have now reached the stage where our currency cannot hold its own as well as most of the third world banana republics.

Mind you, TWBRs don't spend all their time stuffing money into the back pockets of asylums seekers, illegal immigrants and unmarried mothers.

Sallyann1234
29th Dec 2008, 19:29
It is obvious that Euro is coming in UK

It will happen one day, but not yet. The m0r0ns who didn't want us to join when we had a good exchange rate are still not satisfied. When the rate is £2/euro they will probably give in, and then we will really be stuffed.
A repeat of when we joined the EC - too little, too late.

Rainboe
29th Dec 2008, 20:03
I'm suspicious that Robber Brown and the current cronies in power have decided that in the dying days of their corrupt and insane administration, their legacy to the country will be demolishing of the pound by violent over taxation and vast government overspending to the level where entry to the Euro will be seen as the arrival of the US cavalry during an Indian attack. By getting us in at an undervalued rate, our exporters will be supposed to benefit (how, we don't make anything worth having anymore!), whilst our imported German cars will suddenly be 30% more expensive. Their true motivation will be obvious in retrospect getting us completely into the Socialist Republic of Europe, full of politicians whose favourite pastime is dreaming up now ways of raising revenue for them to spend. A real Socialist knows central spending beats the public spending its own money every time!

What has now happened is that the Euro is vastly overvalued in world terms. The cold winds of recession will bite strongly in Europe next year. Which is it, have we been undervalued, or they overvalued? German cars will hit a brick wall of sales. Shame, because they are the best!

frostbite
29th Dec 2008, 21:53
I too smell a currency conspiracy here - particularly since Mandelson has been brought back into the fold.

Rainboe
29th Dec 2008, 23:28
The Mandelson thing is a giveaway. They can't stand each other, so why was he brought back? There are suits who can even order the PM of the land to do what he doesn't want. Mson has an agenda. A weird totally unvoted-for character is foisted onto the cabinet of the country. What is going on? Who are these people with the power? They instructed Maggie to go, Wilson to go, possibly even Blair to move on. They brought Mson into the cabinet- a cheating exposed liar, banished to Brussels with his BF, but very mysteriously brought back by someone who hates him. You could even get caught up in a conspiracy theory here. Is it the Illuminate?

fireflybob
29th Dec 2008, 23:37
Don't laugh but I wonder whether Mandelson is being groomed for PM (or party leader assuming we boot this lot out next time) when Brown goes?

skydriller
30th Dec 2008, 00:54
Don't laugh but I wonder whether Mandelson is being groomed for PM (or party leader assuming we boot this lot out next time) when Brown goes?

Who's Laughing?:hmm:

BarbiesBoyfriend
30th Dec 2008, 01:45
Labour. What a bunch of poofs!

Rainboe
30th Dec 2008, 08:52
I hope Mson is being groomed for Stictly Come Dancing (which he is allegedly desperate to get on) instead of taking over the country! Quite what is he? Totally unelected, how has he got on the cabinet? This individual, castigated for fiddling property loans, suddenly comes to 'lead' us! Heaven help us, how bankrupt this government is, and how bankrupt they are making us. But I am fascinated, who are the 'suits' that are the real power behind the throne of 'Robber' Brown? Why are they so happy that he is throwing the Pound down the plughole, taking ALL the taxpayers money for banks (and nobody else). It's obvious they are a cabal of bankers- they've taken £20,000 on my behalf alone to support their banking industry- the rest of the UK can go hang because nobody else is getting any of my money apart from illegal immigrants in £1 million+ West End houses!

So who has a take on what is going on behind the scenes?

JennyB
30th Dec 2008, 09:54
Thought that conspiracy theories not to your liking?

"Only that you must be a total idiot and conspiracy theorist. It's a mental illness you know, believing all this conspiracy crap. Give it a rest and have an early night."

traveler
30th Dec 2008, 10:14
In 1999 if I bought a 100 pound gift my credit-card statement would show € 140,-
Now next week (2009) 100 pounds would show up as € 100,-

I'm gonna be there saturday, think I'll go shopping. :)

Lon More
30th Dec 2008, 10:25
Comparing house prices several months ago the asking price in UK was about 70 -80% more than an equivalent house here in NL. Now in real terms the prices are about the same.
The "let's move house every 2 years"syndrome is unknown soalthough nobody here is getting rich in House under the Hammer mode, not many people seem to be lumbered with horrendous mortgages.

Be nice to see the pound fall a bit further:\Makes the monthly shopping trip cheaper

Capt.KAOS
30th Dec 2008, 12:42
The € shows it's strength in dire financial times. The Pound has only one country to back it up. Besides England's reputation as financial centre has greatly suffered with the financial crisis and the financial industry was over-represented in the UK economy.

UK should have been €-zone already for years as it cannot support it's own currency sufficiently.

Misplaced incestuous patriotic superiority feelings, xenofobia, whatever, read my former messages about this subject and the answers by the usual suspects. well....here you are.

Positive: my travelling to UK will be a lot cheaper
Negative: my exports to UK will greatly suffer

Curious Pax
30th Dec 2008, 14:00
Comparing house prices several months ago the asking price in UK was about 70 -80% more than an equivalent house here in NL. Now in real terms the prices are about the same.
The "let's move house every 2 years"syndrome is unknown soalthough nobody here is getting rich in House under the Hammer mode, not many people seem to be lumbered with horrendous mortgages.

Be nice to see the pound fall a bit further:\Makes the monthly shopping trip cheaper

Are NL mortgages for >100% of the purchase price still the norm in NL Lon? Interesting comparison as that is the sort of thing cited as exacerbating the UK problem.

When were there in the 90s we looked at buying as prices were shooting up, whilst those in the UK were fairly flat. We bottled it as we didn't fancy being stuck in foreign parts with negative equity and there was a danger they were due another price crash. As with most of our financial punts this was hopelessly wrong, and we would have made a fortune if we had bought at the time, and sold after 3 years when we moved back to Blighty just before prices here starting going up again.

GOLF_BRAVO_ZULU
30th Dec 2008, 14:51
The Pound has only one country to back it up.


So, apart from Germany, who is actually backing up the Euro? Italy, Portugal, Greece? We should be told.

The Government and the Bank of England have successfully “talked down” the value of the Pound. Just like the price of oil was “talked up” by the speculators, the Pound will regain its true level in time. 5h1t happens; and, for the time being, it has.

You Europhile chaps are welcome to your Euro and long may you receive comfort from it. After all, it’s the first time many of the Member States have had a currency of any value for so long. I hope it is strong enough to withstand the internal stresses that must be building inside it.

Sallyann1234
30th Dec 2008, 14:58
the Pound will regain its true level in time
You mean gain, not regain. It hasn't got there yet, it's still on the way.
We no longer have significant physical exports to back up the pound. We used to have invisible exports, but the past year has shown they are not just invisible but non-existent.

You Europhile chaps are welcome to your Euro and long may you receive comfort from it.....I hope it is strong enough to withstand the internal stresses that must be building inside it.
It's a bloody sight stronger than the pound!

CUNIM
30th Dec 2008, 15:24
In Belgium, house prices remain fairly stable at perhaps 1% - 2% per year. UK prices are crazy, the only people that gain are the Banks and the Estate Agents. The stability in Belgium means that most people can actually afford to eat out fairly regularly and have a life. The only thing is you pay VAT on the price of the house at around 21%, but it stops this constant moving every couple of years.

Storminnorm
30th Dec 2008, 16:01
Good job I've still got loads of money invested in Holland!
That can't sink much further I hope!

radeng
30th Dec 2008, 16:21
However, for a long time the € was weak against the $, so the price of oil for several years would have been much higher in the UK.

Nick Riviera
30th Dec 2008, 16:21
Isn't it amazing, the only insults being thrown in this thread are by the pro-Euro contingent. Those who wish to keep Sterling have been called morons, xenophobes and more besides. It is a particular trait of the europhiles to resort to name-calling and mudslinging. Very similar to how extremists of both wings have operated down the years. Says more about those making the insults than those they are aimed at.

lastgasp
30th Dec 2008, 16:27
Curious PaxI'm glad there is someone else out there who also confesses to making the wrong call when it comes to finances.My main home is in France, but my finances remain tied to the UK. I guess that the notional value of the house has gone up in sterling terms, if I was ever to sell it (and if I could find a buyer), but what is hurting right now is the bills. With inflation and the euro hit, they are up 50%.Hopefully things will improve over time, but if there is a Mandy plot to take us into the euro at a diminished exchange rate, then I and many like me will be stuffed.

Sallyann1234
30th Dec 2008, 16:38
@Nick
I apologise for calling you or anyone a moron. A better word would be mistaken.
It is because I love this country so much and want to save it from total bankruptcy that I want to see us taking our proper place in Europe.
Please stand back for a minute and look at Britain's wealth and our influence in the world since 1945. They have both been on a continuous slide downwards while we have constantly failed to stand on our own against the big powers. Both Labour and Tory governments have failed to have any effect on this.
Do you really think that by some miracle this historical trend is going to reverse?
Just as we left it too late to join the then EEC and finally had to accept inferior terms, so we have now repeated the error by refusing to join the Euro when we should have done.

Storminnorm
30th Dec 2008, 16:49
We haven't repeated the error, we have "Compounded" it.
ie, made matters worse. :eek:

Rainboe
30th Dec 2008, 19:29
The Pound hit a low against other countries when it dropped out of the ERM. By Maggie taking firm action to stop feather bedding rust belt industries and introduce efficiencies in all forms of industry and government, the value of Sterling soared in the 80s and the benefit ran on into the 90s and this decade. 11 years of Labour has seen us fall back down. We will climb back up. But even if the Pound is down now, the vast majority will not see it lost. We would rather keep it than end up in a mongrel Socialist currency carrying the poorest economies in Europe!

JennyB- I don't think it is 'Conspiracy Theory'. How can you explain the mysterious appearance of Mson mysteriously back from Brussels, a completely unelected gay former deadly enemy of Brown, a fibber with a mysterious loan history (2 counts?), right in the centre of UK power, the cabinet no less! What is the agenda? There's a conspiracy alright....on what they are trying to inflict on the UK! My guess is enforced entry to the Euro, at parity to keep us all poor.

M.Mouse
30th Dec 2008, 20:14
Funny how the europhiles see the staggeringly corrupt, unaccountable, meddling monumental edifice built to satisfy the greed, vanity and lust for power by unaccountable civil servants and politicians as the answer to all our ills.

At least with our own corrupt incompetents we can vote them out of office every so often.

Remind me again when the last occasion was that EU accounts were signed off?

Sallyann1234
30th Dec 2008, 21:42
For some reason, when I read these posts I think of King Canute sitting in his chair with the tide rising around him.

redsnail
30th Dec 2008, 22:14
I get paid in €. :ok: Always been happy, now even happier. Using the "excess" to pay off more of the mortgage. Even though that's what the UK Govt doesn't want me to do. Sod them. I've seen how they've run the country... :ugh:

GOLF_BRAVO_ZULU
30th Dec 2008, 23:39
It's a bloody sight stronger than the pound!

Nothing wrong with your near vision! :ok:

So, as per my earlier question, what Member States other than Germany are providing the Euro's strength?

Wingswinger
31st Dec 2008, 06:23
And like the Hindenburg, it will one day crash and burn. If I was Irish, I'd be afraid. Very afraid.

CargoMatatu
31st Dec 2008, 08:28
With you all the way, Sallyann1234. My Euro salary is very nice, thank you very much! Having a great time shopping with Amazon UK right now!

Son of MatatuMan works in the banking industry in London and is now making noises along the lines of "sod it, I'm heading for Europe where the money in my pocket is still worth something!" :D

Nick Riviera
31st Dec 2008, 08:46
Cargo

The Pound in your son's pocket is worth plenty. I do all my shopping using it and it currently is gaining me hefty discounts on goods. Sure, my holiday to Euroland will cost more, which is why I will go elsewhere this year. But the amount of business I do in non-base currency is negligible, so i don't see any need to worry about the exchange rate against the Euro. Will he be moving back when the Pound strengthens? Because it will sooner or later. That's what happens with freely floating currencies.

Lon More
31st Dec 2008, 08:55
Curious Pax asked
Are NL mortgages for >100% of the purchase price still the norm
Still possible AFAIK. However it's normally on the executorial value of the property.

As for Sterling gaining/regaining it's true value. The exchange rate when I first came out here was £1 = Hfl. 10,50. Using €1 = Hfl2.12 as a conversion means it's got a helluva a long way to climb.

For the Europhobes, the Euro has a broader base, industry, agriculture etc when compared to UK which only seems to have service industries as a base these days.

Sallyann1234
31st Dec 2008, 09:51
Will he be moving back when the Pound strengthens? Because it will sooner or later. That's what happens with freely floating currencies.
I would love to believe you!
You simply have to explain to me what is going to happen to the British economy to reverse its continuous historic slide over the past 60+ years.
We have no natural resources, virtually no manufacturing industry, and a failed financial market.
Just what miracle is going to turn us around?

Like others here, I'm gaining every day from the pound's slide. 50% of my work is for Germany and paid in euros. It's great for my bank balance but I feel so sorry for this once great country.

Nick Riviera
31st Dec 2008, 10:03
Wow, you really believe that we won't bounce back from this crisis? You honestly don't think that there are serious chickens yet to come home to roost in Euroland? I worked in the financial markets for many years, spent years as a forex trader, have seen currency crises come and go. Parity with the Euro, and lower, has become a target for traders now, but I believe that we will eventually see a bounce in Sterling. I may be wrong, I may be right, nobody knows for sure. I am just basing this on having seen this happen so many times before in various currencies. You need to take a long term view, don't panic just because the rate is low now.

Sallyann1234
31st Dec 2008, 10:27
Long term view?
How much longer do you need than 1945 - 2008?

OK, try 1908 - 2008. Is that a long enough term?
In 1908 we had:
-a currency that was a world standard
-huge gold reserves
-manufacturing industries
-our own independent energy source

In 2008 we have none of these. Other countries have some or all of them and therefore a means to recover from the economic crisis.
I ask once again. WHY will there be a "a bounce in Sterling". What reason?

ATNotts
31st Dec 2008, 10:48
It's strange how those who are "pro-sterling" have a rose tinted view of the currency.

Since the mid 1960s when Harold Wilson devlaued the pound (that's my first memory of a sterling crisis) the trend of sterling's value has been downward - witha few upward blips. However these blips have never arrested the overall decline.

There will be a sterling bounce - €1.00 is too low, and I reckon that over the next few months, after falling yet further, it will recover to around € 1.20 - which point the UK should grab the chance to join up - without any ridiculous referendum.

Sallyann is right, the UK refused to join the Common Market when it has the chance, and has spend the last 35 years whinging about the "club" rules. Similarly, we will join the euro, at some stage, then spend subsequent years complaining we don't like those rules either.

The UK on it's own has little going for it economically. An economy built on personal credit and house prices is one built on sand - and unless that changes radically, with a switch back towards manufacturing, and away from financial and other service "industries" the long decline will just continue.

Rainboe
31st Dec 2008, 10:52
Off course there will be a bounce back. It is inevitable when the pendulum swings, it always goes slightly too far. It will stabilise for a while, then when Euroland finally hits the buffers, the UK and the US will be climbing out of the recession first having led the way into it.

Sterling may, in your opinion, have been on a long decline. You have to look further than the comparative value of the currency. It is the comparative living standards that count- the currency is just a number. The UK has been living equally as well as Europe in standards. Travelling abroad, I hear German and British accents. The standard of car easily matches anything in Europe. In Italy, FIATs are the thing, in the UK, BMWs and Mercs are 2 a penny. UK residents own their houses, Europeans rent. I believe we give more of our wealth to charity than Europeans. Brits are the chief foreign property owners along with the Germans. It suggests our purchasing power easily matches foreigners.

I share with you confusion about how we do it. We don't build ships or planes or have a worthwhile car industry. What is 'Made in Britain' now? Often things with a foreign name plate on them. The financial industry is not 'failed'. It's hiccupped. But we will come out of this while Europe follows us in the cycle by a year or two. It will take a change of government to do it, and god knows how we will clear the debt Robber Brown has foisted onto us in our name! The pound will rebound, it took Maggie to do it last time. Fear not, it will happen again. The longer the Euro puts off its own armageddon, the worse it will be. When it happens, the Germans and Dutch will start questioning why they are carrying all the rest of the Euroland and create terminal cracks. It is underway now- the price of European goods will now push them out of the UK market. How can their home industry handle an overvalued currency? Floating up and down is a natural function of an independent currency. We're so far down because of Brown and his earthshattering profligacy to banks.

Joining the Euro has some unpleasant factors. Our gold reserves (what Brown left us after selling most of them....for $160/ounce can you believe) will ALL be transferred to Frankfurt. The Bank of England will have nill influence over the financial administration of the UK.

JennyB
31st Dec 2008, 10:58
So we're better off than Europeans, which is apparently all the fault of robber Brown and we therefore need to get rid of him?

Making me as confused as you obviously are.

Rainboe
31st Dec 2008, 11:04
ATNotts, let's get it right. What we don't like about the EC is the aims of it....'Common Market'. It was set up for 2 reasons:
1- to stop France and Germany going to war for a fourth time in a century and killing the flower of European males
2- to subsidise with guaranteed intervention and direct subsidy small peasant European farmers with a couple of cows and pigs, producing what was not needed by anybody (remember warehouses full of butter mountains?)....paid for by the UK taxpayer out of the efficiencies of the big UK agriculture sector to keep tiny European farms going.
3- to finance European socialist bureaucrats with their bizarre public spending ideas deciding they know best how to spend our money for us. They haven't changed since it started!

The chance of getting the UK into the Euro is not good, thank heavens. Enjoy the increase in spending power while you have it. It will not last, then the pendulum will swing back. As we are all bragging about how well we are doing, it has just lifted whatever value my European property has by 30%. Who cares? It's called diversification- it helps balance out the peaks and troughs.

JennyB- we're not 'better off' I said we have comparable living standards which matches my observations in nearly 40 years of travelling in Europe.

ATNotts
31st Dec 2008, 11:23
Rainboe

I can't argue with your premise that the main reason for setting up what is now the EU was to prevent a repeats of 1914/18 and 1939/45 and in that is has been a complete success. All the European military conflicts since 1945 have been civil (IRA and ETA) or between non EU states. That alone is a good reason for it's existence.

However to read the rest of your critique you would think that the EU was set up just to fleece the UK - you will actually find similar irritations in many other EU states. I feels sure you speak a second language so would appreciate this.

I fail to understand however, why, since the Euro seems such a good idea embraced by most of the EU members (Slovakia joins tomorrow - and the Swedes seem to be thinking about it again) it is so bad for the UK.

The UK is not a "great power" anymore. We are now medium sized nation, off the coast of the European continent, with a rather insignificant currency. The sooner we understand that and start behaving accordingly, the better it will be for all of us.

Finally, I would have a small side bet that contrary to your wishes, the Euro won't fall apart anytime soon - it may fluctuate, as it has over the last few years, but it won't collapse.

ORAC
31st Dec 2008, 12:19
...without any ridiculous referendum. Well you've certainly absorbed the anti-democratic opinions of the EU aristocracy. :hmm::hmm:

The EU was set up as a trading pact and, as such, did not have robust democratic safeguards built in, they are still missing.

I think I'll wait, thank you very much, even if we end up financially worse off.

I would have thought the last year had taught the value of other things above the pursuit of wealth.

GOLF_BRAVO_ZULU
31st Dec 2008, 12:38
We are now medium sized nation, off the coast of the European continent, with a rather insignificant currency. The sooner we understand that and start behaving accordingly, the better it will be for all of us.


Well, actually, if we’d have thought that way in the 17th, 18th, and 19th Centuries, we would have remained exactly that!




it will recover to around € 1.20 - which point the UK should grab the chance to join up - without any ridiculous referendum.


Ridiculous referendum, eh? In case we throw a paddy; like the Irish on the EU Constitution/Treaty? So we won’t be required to vote again until we get it right? Anyway, I largely agree with your predicted exchange rate. It’s pretty close to the MoD’s Directorate of Economic Statistics and Advice prediction of


Consensus Economics forecasts show that sterling is expected to appreciate (from its current value) against the dollar in 2009 with an average value for 2009 of $1.55. Sterling is expected to appreciate more against the euro with an average 2009 value of €1.23.


http://defenceintranetds.diiweb.r.mil.uk/sites/polestar/cs/DocumentLibrary/11/1624_QEO%20Winter%202008.pdf (http://defenceintranetds.diiweb.r.mil.uk/sites/polestar/cs/DocumentLibrary/11/1624_QEO%20Winter%202008.pdf) for those with access. I can’t find a open Internet version, unfortunately.

Sir Lee B´stard
31st Dec 2008, 12:45
Haven't we been here before?

Pound Tumbles as Britain Seen Leaning Toward Euro - Los Angeles Times (http://articles.latimes.com/2001/jun/07/business/fi-7364)

Yak97
31st Dec 2008, 13:16
ATNotts posted:

I can't argue with your premise that the main reason for setting up what is now the EU was to prevent a repeats of 1914/18 and 1939/45 and in that is has been a complete success. All the European military conflicts since 1945 have been civil (IRA and ETA) or between non EU states. That alone is a good reason for it's existence.

This is a common myth posted by EU fanatics, in fact NATO, which was formed in 1949, has been the pivotal organisation to ensure peace in Europe:

The North Atlantic Treaty Organization (NATO) is an alliance of 26 countries from North America and Europe committed to fulfilling the goals of the North Atlantic Treaty signed on 4 April 1949. In accordance with the Treaty, the fundamental role of NATO is to safeguard the freedom and security of its member countries by political and military means. NATO is playing an increasingly important role in crisis management and peacekeeping.

The EU as such was not formed until 1993, before that it was the EEC (European Economic Community) which was created in 1957 to bring about economic integration (no reference to maintain peace).

Curious Pax
31st Dec 2008, 14:06
Wars usually have a megalomaniac or economics at the core in some form. As by and large the EU countries have failed to put any megalomaniacs in charge for the last 63 years it follows that the relative states of their economies have helped keep the peace. That derives from the EU (which evolved from the EEC rather than replacing it) not NATO. If members of the EU had started getting aggressive with one another then sure NATO would have come into play, but as that didn't happen they were able to focus on glaring at the Warsaw Pact across the former border in the middle of Germany for many years, and now onto other external threats/nuisances.

Oh, and the Empire has gone - get over it! We had one because we were the first to look beyond our borders for resources, but everyone else has caught us up in that respect. Hopefully other things will come along that we can be at the forefront of, but in the meantime get real - delusions of grandeur help no one least of all us!

ATNotts
31st Dec 2008, 14:09
Strangely, before it was a member of the EEC/EU but was a member of NATO, Greece was busy scurmishing with Turkey (another NATO nation) - since membership I can't recall a shot being fired. The EEC may not have been formed specifically with the sole aim of maintaining peace - but it certainly has worked.

Also, for most of it's existence, France has not even been a "full member" of NATO - always favouring a slightly independent line - the sort of line that the UK likes to tread within the EU!

Yak97 - By the way, I am no more a fanatic in favour, as you are fanatically against the EU!

angels
31st Dec 2008, 14:43
Interesting. Was reading this thread out of professional curiousity and saw Nick Riviera's first post and thought, "Just what I think." I see from his second post he's ex-market....

Agree with him on parity as well. Traders love a target, albeit a psychological one. Nick, were you around when cable was looking to hit parity?! I recall the bounce with great pleasure! :ok:

As for the question of the pound joining the euro, I'm against it merely from a pragmatic point of view in that I think the economies of the eurozone are just too diverse to be run as a single entity. Greece is somewhat different to Finland for example.

It's not often that Rainboe and I are in the same camp, but we are in this one, albeit for somewhat reasons!

Whatever your views, happy new year. :)

ATNotts
31st Dec 2008, 15:16
Granted the economies of the individual eurozone states are diverse, but you would expect that over time they would become less so.

I'm not sure of my ground historically, but I would imagine that going back to the beginning, the various states of the USA were widely diverse in terms of wealth, and growth - it must still be so today, with the "rustbelt" being a good deal less prosperous that for example California, and the various growth rates of the states must still differ one against another. The EU is surely no different, but just at an earlier stage in it's (economic) evolution.

Even in the UK there are two economies - the Southeast and the rest of us! A single currency, has not stopped the country as a whole surviving, and from time to time, prospering.

I still want to know why the euro is right for everyone else except the UK and a part of Scandinavia - what makes us different?

M.Mouse
31st Dec 2008, 17:17
Funny how SallyAnn1234 claims with one breath that we have nothing to offer the world yet in the next (her profile says she is a consultant) proudly says that 50% of her work is abroad! So, assuming she is British, she has some talents in demand elsewhere.

My brother writes bespoke software and sells his products all around the world. I can think of several other people I know who also sell their talents abroad. To claim that we need the EU because we have nothing with which to support ourselves is plainly nonsense because if it was true then the EU would effectively be being asked to subsidise us!

I voted for the EEC, a common trading block. I did not vote to be governed by unknown meglomaniac European career politicians.

Anybody visited Sardinia? The town of Arbatax sums up the stupidity of some of the muddled thinking coming from the EU. There are hundreds of derelict buildings built with EU money to house manufacturing industry. In reality the cost of importing materials, manufacturing and then exporting the goods was so expensive the whole project failed. No suprise to anyone except the idiots in Brussels. There is also a magnificent and spectacular bridge across a valley in Sardinia (location I forget) built with EU money. It carries one of the safest roads in Sardinia - that is because it has virtually no traffic.

Nobody has answered my question asking when the EU finances were last approved by the auditors.

Rainboe
31st Dec 2008, 18:07
The UK was being written off horribly all over the world in the 70s. State employees striking, bodies left unburied, industrial collapse, a motor industry in paralysis with 'Red Robbo' leading industrial action of a crippled industry, enormous deficits, pay restraint, defence cuts, foreign currency limited to an absurdly low figure. I was being told by street vendors in Singapore that 'the UK is finished....gone, kaput!' The Tories took over- no difference, a government in paralysis. It led to an opportunistic Argentine Government thinking it could step in and take the Falklands. Maggie rallied to the flag, and the rest is history, the country started improving to 25 years of the most wealthy period in UK history. One of the effects of currency collapse is to artificially boost an economy- if it is able to take advantage. You reduce the attractiveness of imports and increase the attractiveness of your exports. The currency collapse has been caused by the incredible increase in liquidity caused by government bailout of banks (only). The next problem is the creation of the resulting inflation in a stagnant period. We are going to see years of stagflation, the economies of Europe will be going through their own crisis. Instead of harping on about the UK, they should desperately be looking to protect themselves. What is happening in the US and UK is on its way across the channel!

People should not think this is something unusual or unique to Sterling. We have been here before. What appears apocalyptic collapse is merely currency adjustment and re-alignment. After a few months, it goes the other way. We have all been caught out by the scale of the fall of Sterling, just as we shall be surprised by the scale of the recovery, until manufacturers start bitching that Sterling is so strong we can't sell our goods abroad. It happens all the time- the collapse actually gives impetus to the recovery. It is close- the Euro is getting so strong worldwide that European export trade will collapse and the Euro economies will undoubtedly be in deep recession before they know it.

arcniz
31st Dec 2008, 19:45
Cunim says:

In Belgium, house prices remain fairly stable at perhaps 1% - 2% per year. UK prices are crazy, the only people that gain are the Banks and the Estate Agents. The stability in Belgium means that most people can actually afford to eat out fairly regularly and have a life. The only thing is you pay VAT on the price of the house at around 21%, but it stops this constant moving every couple of years.

A conservative view of land and buildings as assets is that, once constructed or developed, they neither grow in size nor increase in value, except that both may require considerable maintenance and the deferral of that often leads to a net decline in real value. The apparent "increase" in value of properties is caused by growing affluence and growing population increasing competitive demand for a finite supply of useful properties.

The heavy tax on exchanges of real property that you describe is - for all practical purposes - confiscatory. Perhaps it can stand for awhile in Belgium, but within a generation or two tremendous stresses will develop as a result. Perhaps the most likely result is that your young people will see it as an insurmountable wall of expense, and so will take their lives and energy and productivity elsewhere, to the many places in the world which do not place such burdens on economic and social mobility. This is a recipe for a "shrinking society", filled with needy elderly who may find no competitive market for their assets when the need to liquidate arises.

Nick Riviera
1st Jan 2009, 08:49
Angels

Hi, nice to speak to someone else from the market. Yes, I remember when cable approached parity, also enjoyed the bounce and heard the same voices of doom predicting the end of the UK. I also did well the first time USD/JPY went through 100, that also had a lovely bounce. Gets me all nostalgic to see it back at those levels again. Another great example of how currencies fluctuate over time, something many people here have to understand. Like you, I have seen this before and listened to the doomongers and their apocalyptic predictions. When Sterling bounces, I wonder if they will be talking of how the Euro is dead?

ATNotts

You have raised that old Europhile chestnut about how a single currency works in the US. This has to be the worst argument ever trotted out by the Euro brigade. To compare the US (same language, culture etc) with Europe (multiple cultures, languages etc) is laughable. Yet you have excelled yourself by also lumping SE England vs the rest of the country into the argument. If you took the 2 most diverse states in the US and compared them to, for example, Greece and Finland, you would not have one iota of the differences between the two cultures. You state that the economies are diverse but that they will come together over time. Why will they? Multiple ecomnomies each at a different stage in their economic lifecycle, each guided by doing what is best for their national interest (because they are sovereign states, not Europeans). There is absolutely no way the economies can naturally come together, it can only be done artificially with an artificial currency held together by threats, bribes and the German economy. This is the fundamental flaw in the whole Euro plan. As I said earlier, chickens are coming home to roost in Euroland and it won't be pretty when it happens. Just about all of the bad news on the UK economy, including rates at zero, has been factored into the price of Sterling. Just watch the exchange rate when the Euroland horrors in the cupboard are finally acknowledged.

Rainboe
1st Jan 2009, 10:58
Nick- said so eloquently and accurately. It's interesting to see the schadenfreude (a Euro word!) being directed at the UK at this dour time, from those who will react in shock when the mighty Euro tumbles and the apparent solid edifice starts cracking. It will all be happening within a couple of years- stand back and watch the view- it will be far more entertaining than watching Sterling go through one of its weak phases (from which it will recover).

Now is the time to sell those Euros and buy the currencies that are presently weak! I predict economic recovery from this will start in the US. It will drag Sterling up next, and the Eurozone will be struggling with a mysterious unshake-offable depression for a lot longer- nobody wanting overpriced Euro goods, and vast unemployment. Let's see how their economies can pay for their overblown social spending and benefit policies. The Euro will soon be coming under make or break strain- this recession will break it as the Germans get fed up of carrying the rest. It will be interesting to see.

Lon More
1st Jan 2009, 11:20
Post #26 the only insults being thrown in this thread are by the pro-Euro contingent

So when posted by the Little Engerlanders it is "constructive criticism"?

Rainboe, schadenfreude is not a European word, it is a German word. The nearest thing to a European language is English. Not because of any superiority, but because most Brits are unable/unwilling to learn a second language.

Don't hold your breath waiting for Sterling to spring back; the London markets are no longer the most important in Europe, most of which has enjoyed long periods of stability having been spared the megalomania of St. Hilda of Grantham and the inevitable backlash and resurgance of New Labour, The pendelum is now swinging the other way'God help the country if that flightweight Cameron gets in

Rainboe
1st Jan 2009, 12:21
Don't kid yourself. London towers over Europe in terms of financial markets and free trading of equities. The Europeans can't quite allow themselves to open their markets- look at the ownership of VW. Despite all the free trading rules in the EC, the Europeans still can't quite prise their fingers open. Look for yourself stock market capitalisations:
File:2005stock market capitalisation.PNG - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/File:2005stock_market_capitalisation.PNG)

London is still the world pre-eminent centre for Finance and Insurance. It will not change because of currency fluctuations which will head the other way sooner or later. I do believe there is a lot of manipulation going on in Europe to try and wrest the control from London, and that is why I am deeply suspicious of Mson and what his real mission is at the moment!

Rather than getting Cameron in being our only hope, the priority is getting Brown and this bunch of lightweight idiots OUT to save us. The alternative is still bad, but not nearly AS bad!

Sallyann1234
1st Jan 2009, 12:25
@Lon More
I won't matter which political party gets in next time. No party has been able to resist the overall downward trend of the pound's value and the UK's national wealth since WW2.
Changing party policies e.g. joining and leaving the ERM have had short-term effects, but the UK is now a small powerless country at the mercy of global changes.
Those who speculate an upward or downward move in the pound's value over the next year or two have a 50% chance of being correct, but any such change will be just another of the many short excursions from the historical downward trend.
It gives me no pleasure at all to say that the UK has no real future on its own. And unfortunately it will fare little better as a latecomer to the EU and the Euro, since it stubbornly chooses to join until after more progressive countries have made the rules to suit themselves.

airship
1st Jan 2009, 14:21
The official BoE interest rate is now at 2%, lower than Euroland interest rates. In all previous recessions over the past 2 decades or so, sterling interest rates have always been higher. In fact, when sterling got thrown out of the ERM back in 1992, BoE interest rates @ 15% were almost 3 times that of Germany's. Today, with the official rate at 2% (and forecast to drop even further during 2009), few Britons enjoy relatively low interest rates on their outstanding mortgages and loans. Almost the entire benefit of current lower official interest rates appears to be devoted to the main financial institutions - just call them oil companies, accuse them of being very quick to repercute oil price rises at the pumps and very tardy at doing the same when oil prices go down, and you get the overall picture...?

In most previous recessions, UK has had the cushion of a small budget surplus. This time around, the UK faces a recession starting out with a large deficit. This 4-6% of GDP make all the difference compared to other downturns. It also explains why sterling is overripe for the plucking by another George Soros perhaps.

The average Briton may already be feeling the pinch, but the hangover from UK plc's financial sectors' partying over the past few years has still to be cleansed by a long chalk. Today's lower pound against other currencies (not just the €uro) is a consequence. Today's lower interest rates are like taking a couple of anadin or aspro. It's when sterling interest rates are once again at least twice what they are in Euroland, that sterling will make another comeback. And we'll all know that Britons are truly taking the medicine (by making the bailout of the UK's 'too big to fail - which contributes 40% of taxes on corporate profits' financial sector) with real hardship...

:=:confused::}

ATNotts
1st Jan 2009, 14:56
It gives me no pleasure at all to say that the UK has no real future on its own. And unfortunately it will fare little better as a latecomer to the EU and the Euro, since it stubbornly chooses to join until after more progressive countries have made the rules to suit themselves.

Thats exactly my point - each time the UK makes the same mistake!

Rainboe.

I'm not the slightest bit interested in cultures, languages etc - it's economic performance and differentials that I was asking. (not making claims about incidentally). China has a multitude of different languages and cultures, but works perfectly well with one currency - as does India which is culturally one of the most diverse countries, and copes well with a single currency. So, to ask the question again, what is the difference in growth rates between the best and worse performing US states. I expect I could find the information myself, but feel sure that you will have accurate, unbiased data at your fingertips.

I would own up, without hesitation to being pro-Europe, but am interested in reasoned arguement as to why what seems to be good, and embraced by all the major european countries as being a good thing, is so wrong for the UK.

Nick Riviera
1st Jan 2009, 17:26
Lon More

So, we are also Little Englanders as well? Again, the only insults here are from the Europhiles. As for London not being the pre-eminent financial centre of Europe, you could not be more wrong, specifically in the area of Foreign Exchange in which it is by far the leading centre in the world.

ATNotts

China = single economy, India = single economy, USA = single economy, Euroland = multiple distinct and separate economies forced together in an artificial trading bloc. If you cannot see the difference then there really is no point furthering the discussion.

Sallyann1234
1st Jan 2009, 19:07
China = single economy, India = single economy, USA = single economy, Euroland = multiple distinct and separate economies forced together in an artificial trading bloc. If you cannot see the difference then there really is no point furthering the discussion.
Wrong, wrong, wrong. I suggest you read some history books.
China and India were both comprised of different economies and indeed races, that were "forced together" to use your words, by political and military means.
"Euroland" as you call it comprises countries who have democratically chosen to have a joint economy. As far as I can tell, none of them regrets the change.

If you cannot see the difference then there really is no point furthering the discussion.
Correct

Rainboe
1st Jan 2009, 19:28
Sallyann
Changing party policies e.g. joining and leaving the ERM have had short-term effects, but the UK is now a small powerless country at the mercy of global changes.
Those who speculate an upward or downward move in the pound's value over the next year or two have a 50% chance of being correct, but any such change will be just another of the many short excursions from the historical downward trend.
Where do you get this stuff? The UK 'small powerless...' blah blah has the most powerful military (along with France) in Europe, pulling more than its weight compared to the others in the fight against terrorism.
Our 'historical downward trend' has led to Brits owning more property in the US and Europe than any other country- was it 1% of Brits now own property in France? Orlando is now almost a British holiday resort. Until recently Britain had the most energetic airline industry flying Brits on holiday abroad. Brits own their homes more than any other big country in Europe. The roads are so congested because the 2 car family is now standard. Britland is the biggest export market for Merc and BMW outside the US.......this is a 'historical downward trend'?

What is needed is a bit of maturity and understanding that we have seen this before....several times.....and we know how the tune goes, and we're trying to hum it for you but you won't listen! It's just a swing of the pendulum, and it is about to swing the other way. I shall bring this thread up in the future in the hope you will learn and understand the next time it happens!

Rainboe
1st Jan 2009, 19:32
Sallyann
Changing party policies e.g. joining and leaving the ERM have had short-term effects, but the UK is now a small powerless country at the mercy of global changes.
Those who speculate an upward or downward move in the pound's value over the next year or two have a 50% chance of being correct, but any such change will be just another of the many short excursions from the historical downward trend.
Where do you get this stuff? The UK 'small powerless...' blah blah has the most powerful military (along with France) in Europe, pulling more than its weight compared to the others in the fight against terrorism.
Our 'historical downward trend' has led to Brits owning more property in the US and Europe than any other country- was it 1% of Brits now own property in France? Orlando is now almost a British holiday resort. Until recently Britain had the most energetic airline industry flying Brits on holiday abroad. Brits own their homes more than any other big country in Europe. The roads are so congested because the 2 car family is now standard. Britland is the biggest export market for Merc and BMW outside the US.......this is a 'historical downward trend'?

What is needed is a bit of maturity and understanding that we have seen this before....several times.....and we know how the tune goes, and we're trying to hum it for you but you won't listen! It's just a swing of the pendulum, and it is about to swing the other way. I shall bring this thread up in the future in the hope you will learn and understand the next time it happens! Some unasked-for advice- time to dump your Euros and buy Sterling, the pendulum has just about reached the limit, and the Euro will be a sad currency within a couple of years. The recession is coming there too- it is just trailing the US and UK. Whilst it's easy to pontificate on UK failings, be warned armageddon is coming, and when it does, Germany will probably not want to carry the failings of the sunbelt.

Nick Riviera
1st Jan 2009, 19:50
SallyAnn

I know my history, thanks. India and China ARE single economies. Fact.

Europe democratically decided to form a single economic entity? I must have missed the referenda that the Eurozone countries held.

airship
1st Jan 2009, 19:53
Brits own their homes more than any other big country in Europe. Home ownership in the UK attained a maximum of about 70% in 2005. Home ownership in Spain attained a level in excess of 80% (some unofficial sources say 95%) in 2007.

Mr. Joe Bloggs in UK, or Mr. Santoza in Spain needs to relocate because of a promotion or whatever (he will be unemployed if he does not). If Mr. Joe Bloggs in UK owns his abode, how will he, or Mr. Santoza be able to rapidly relocate to their new jobs? In a reasonably balanced- capitalistic society, we have to accept that fewer people will own their own properties (but we will all be generally be better off if that offers some mobility to employees).

So just what is the premise of your argument Rainboe...?! :confused:

PS. In China and countless other places including Africa, most people also owned their own homes. Until their rights were confiscated for one or other reason.

PPS. If the UK government were to allow all purchasers of UK housing the 'right of abode' to foreign purchasers, then I'd imagine that UK property prices would experience a major and rapid rebound from current price levels. I don't see the problem. Last year it was Brit landlords cramming Polish workers into buy to let properties. Next year, it could be Hong Kong Chinese landlords cramming young Brits going through college into buy to let properties. UK plc are already surviving on a hand to mouth basis...?! :}

frostbite
1st Jan 2009, 19:55
I have heard that many people in Italy, Spain and other countries are most unhappy with the effect the euro has had on their economy.

No doubt these are a vocal minority.

Sallyann1234
1st Jan 2009, 20:24
I know my history, thanks. India and China ARE single economies. Fact.
Both created by bringing together diverse communities (in India's case enforced by an outside power) and now held together militarily, without which they would split again into their component parts.
Compare the Hindu/Moslem bloodshed in India with the bickering within Europe over farm subsidies.
Europe has successfully brought together its national partners into a thriving, successful single economy - voluntarily and peacefully.

Sallyann1234
1st Jan 2009, 21:52
I shall bring this thread up in the future in the hope you will learn and understand the next time it happens!
I await the result with interest.

Rainboe
1st Jan 2009, 23:53
Airship

Home ownership in the UK attained a maximum of about 70% in 2005. Home ownership in Spain attained a level in excess of 80% (some unofficial sources say 95%) in 2007.
The reason home ownership in Spain is so high is that a very high proportion of homes are owned by.......foreigners.....mainly Brits and Germans who own, in that order (after the Spanish themselves), most homes! That is why home ownership in Spain may actually exceed UK levels- because Brits, who own homes in the UK, also own one in Spain (like me)! Not bad for a written off economy! That, is the premise of my argument, since you asked! Many Brits, from that written off economy, as well as owning a home in the UK, do also own about 1% of French properties. Also relevant to the reason UK home ownership is not actually higher than it is is that social benefit housing, in the form of council housing, reaches far and wide in the economy. For many who would otherwise buy property, why buy when the State will provide for you? It would otherwise be vastly higher.

Don't forget, the Spanish economy is the biggest Service economy in Europe. Building services makes up a disproportinate part of the economy, chiefly to service building homes for foreigners....who are mainly British, and Tourism services, to service foreigners....who are mainly British.

I might add I am very impressed with the locals in the main not reacting badly to so many Brits living amongst them. I fear if UK property starts getting bought up at such an incredible rate by foreigners, the Brits would not be nearly as patient. But that is another matter altogether.

621andy
2nd Jan 2009, 06:21
Talk to many people in Germany and they'll tell ya how happy they are with the f:mad:ing €...

When it first came in, I was as big a fan as anyone, but now every time I walk into the supermarket or buy fuel or in fact do anything, I wish for the old DM back:{

We were all conned with the 'exchange rate' of 2DM= 1€, so the price tags after a bit looked 'cheaper'. However, very soon your pair of jeans, litre of milk, litre of fuel etc., was costing you the same in € as you were paying in DM. i.e. What was cositng you 50DM was now costing you 50€- basically everything has doubled in price in the last 5 years....It's now nearly as expensive to live in Germany as it is to live in the UK:sad:

When I started working in Germany the rate was 3DM to the GBP, which made living there very cheap. But even being paid in DM made it worth being based there.
Now, sat here in Asia, watching my pay in GBP disappearing as it goes into my € account I'm rueing my decision. However I'll be over to the UK in march, so I'll do my best to make the most of the exchange rate:ok:

The UK has been overpriced for a long time. I could buy for example the same camera in the UK as in Germany, and pay 25% more for it in the UK.
..and as for fuel prices:*

Now, I'll be interested to see how things compare when I'm back in Europe..

rvv500
2nd Jan 2009, 06:30
You seem to know nothing about China and India and suggest that you stop spouting rubbish.

India is not held together by military. It is the world's largest democracy.

India and China are single large economies.

Your claims about these two betray your total ignorance.

Wingswinger
2nd Jan 2009, 07:21
Post #60 by Lon More

. The nearest thing to a European language is English. Not because of any superiority, but because most Brits are unable/unwilling to learn a second language.

I'm sorry LM but I really have to disagree with that. We British are not in the linguistic poor-house because of any inability or unwillingness. The superiority of English as a WORLD language derives form its constant thieving of words and expressions from other languages. Anglo-Saxon was a poor and simple tongue until it absorbed an enormous number of words from Latin, French, Ancient Greek, German and so on. The process exploded with the Empire and we now have a huge number of "English" words which are Indian, African or Oriental in origin. It is a process which continues. In the 1880s Esperanto was born in the hope that it would become a world "Lingua Franca" but it is in fact English which has done so almost by default. The truth is that we British are not adept at foriegn languages simply because we no longer have to be. I once said to a Dutch colleague that I admired his fellow countrymen and women because I had never met a Dutch man or woman who could not speak at least two other languages fluently. I asked him how they do it. His reply: " Easy, we have to. Who the **** else speaks Dutch! And we don't have to. Since necessity provides the impetus (Latin), there you have it.

Doug the Head
2nd Jan 2009, 08:47
Interesting video... (http://www.cnbc.com/id/15840232?video=982147417&play=1) :\

Lon More
2nd Jan 2009, 08:58
Wingswinger obviously i did not make it clear enough, difficult because English is now my second language. Perhaps if I had written, ".... common European language"....'" the point might have been better understood.

I agree entirely with the rest of your post.

Rainboe
2nd Jan 2009, 09:16
Doug, the point he makes that interest rates are going to shoot up is quite correct. But what one misses at the moment, the US and UK are in armageddon now. Euroland doesn't seem to understand, but it is still on the downslope. Financial reality is still coming to Europe- they are trailing us by a year or so. Yes the pound is in for a battering now. The cold winds of this crisis are still coming to the zone with an overvalued currency, incredibly high social and benefit costs, overpriced goods on the world market, and a population determined the state will look after them. It's all very well to laugh and feel vicarious pleasure at sterling's tribulations at the moment, but be warned sterling is merely ahead of Europe in the crisis. Does the Eurozone really imagine for a minute this is as bad as it gets in Europe? We are sailing ahead of Europe- we are in the storm now. It's headed Europe's way! Don't laugh- they should be reefing in all they can. It's a comin'! The storm hit the US first- it will clear the US first while the rest are still in it. Is Eurozone ready? Even less than us- the Euro is perched so high, who are they going to trade with? Can you imagine the unemployment coming to Europe as it fails to sell goods on the world market because they can't be price down? Get ready for wine lakes and butter mountains (and tax rises to pay for them) again, because the the artificial strength the Euro, in a slump, will kill off trade. Be scared- it's coming, and it's going to be bad.

We are heading for slump. All of us. Skies are black, the storm is getting even deeper. Frankly, I'm dead scared.

Sallyann1234
2nd Jan 2009, 09:22
rvv500
This diversion into India and China started because I responded to Nicks's comment:
China = single economy, India = single economy, USA = single economy, Euroland = multiple distinct and separate economies forced together in an artificial trading bloc.

The point I was making is that his argument about economies forced together into an artificial bloc applies equally or more so, to China and India.
China was a number of races brought together by military rule (Tibet?). India was a number of kingdoms each ruled separately with their own treasuries and brought together by outside control. In spite of these beginnings and continuing internal struggles, both have become thriving single economies.
I have travelled India and seen some of their achievements.
In contrast, Europeans have voluntarily decided to have a single economy (yes you can scoff about referendums but the EU countries are democracies and did not have to join together.
If India and China can become successful single economies with their huge internal differences, then so can the EU. 50+ years after the Treaty of Rome, it is well on the way to achieving that and Britain is the loser by failing to join.

Rainboe
2nd Jan 2009, 10:47
But you don't understand we have done quite well up to now remaining outside. Do i have to go through car/house/relative wealth points again? We have been struck by a storm. The UK is leaning over. the US is well into it. Europe is folllowing, and is about to be struck by the storm. It will be really interesting to see how the Euro weathers the storm with the Germans all carrying the main load on deck. This is not as bad as it gets in Europe. It's coming. Rather than leap into a ship that might founder, I think we feel we are better off in our own ship in this storm, even if we are smaller. But with a lower currency, we are actually more agile to face the storm. Let's see how it pans out! Maybe if we do turn turtle, if the Euro is so bloody good, it can rescue us and we join up. But those of us that have seen storms like this before think HMS UK is possibly better placed to run this storm alone.

angels
2nd Jan 2009, 11:02
Europeans have voluntarily decided to have a single economy (yes you can scoff about referendums but the EU countries are democracies and did not have to join together.


Oh dear.

Let's get this straight. A few politicians and unelected central bankers decided to have a 'single economy'. No-one is 'scoffing' about referendums, they're pointing out that there were none. They're also pointing out that had referendums been held, the voting populations of some of the richer countries (especially Germany) would almost certainly have voted against the euro zone.

The fact you have elected a particular politician does not mean you endorse every decision that politician makes.

Rainboe and Nick are both quite right about the City as well. I'm in a trading room in Canary Wharf right now and the refrain from the propietary desks is that all the continent has taken an extra day off. When the authorities in Frankfurt and Paris claim they're on the way to overtaking the City they're not around to issue their proclamations on days like today. London is the font of liquidity. Fact.

I still maintain that, despite your optimism, the euro zone is too diverse to be run as a single entity. The economy of Slovakia (in the euro zone as of yesterday) is essentially based on a few large car plants in and around Bratislava. It is different to that of Finland (forestry, technology, goods waypoint etc) which is different to that of Germany.

Again, Rainboe is right in that the euro zone is well behind the curve.

Sallyann1234
2nd Jan 2009, 11:07
Like you said, Rainboe, let's wait and see what the long term brings.

Rainboe
2nd Jan 2009, 11:17
I can't handle people agreeing with me angels! Desist immediately!

The Real Slim Shady
2nd Jan 2009, 11:25
Even closer to the shores of the UK our cousins in Eire have an economy, firmly in the € zone, founded on sand.

Strike up conversations with folks in Eire and they are "property developers": with a population of around 3.5 million there is only so much property, domestic, commercial and industrial needed.

When the bubble bursts over there you will be able to hear it in London.

ORAC
2nd Jan 2009, 11:29
Sallyann,

The current big difference between India/China/the USA etc and the EU are that, as sngle nations they have centralised taxation allowing transfer payments from richer areas to poorer. The current problems being experienced in poor rich and poorer areas is because of a lack of such mechanisms.

Inevitably, and almost certainly in the next couple of years as the strains of the current recession/depression take hold, these will have to be introduced. Indeed, many European politicians support the euro precisely because they see it as a step to fiscal union, and a step to a final complete political union.

Now, there is nothing wrong with such an aim, except many do not want it as they consider the cultures and long term aims of the different current nations neither need or are ready for such a union.

But as a minimum those who intent on such an aim should be honest about it and allow a democratic vote on it.

Avitor
2nd Jan 2009, 11:44
It's time for an in depth post about the Euro so here goes.

Stuff it and get out of the corrupt cartel.

Sterling and Britain rule OK? :cool:

angels
2nd Jan 2009, 12:26
I can't handle people agreeing with me angels! Desist immediately!

Humble apologies sire. With my woolly-minded liberal ideals and your Thatcherite principles we make strange bedfellows indeed!

But then during the EU debates it was always interesting to see Mr. Benn sitting alongside such folk as Norman Tebbitt et al!! :eek:

rvv500
2nd Jan 2009, 13:27
I suggest you go through the history of all European Countries and also India and China to understand what was the structure of each of these countries. You'll find that India and China have a clearly defined structure of a country with boundaries and common culture long before many of the current European Countries have.

Also India has never been held together by the military. It has been a democracy ever since it's independence in 1947.

acmi48
2nd Jan 2009, 13:28
i am in the euroezone and will go to england in the coming weeks and plunder
all i can at discounted prices.
seen all this currency baloney in 68 77 93 lows and hi's in the early 80's and late 90's
its all swing and roundabouts...

Doug the Head
2nd Jan 2009, 14:29
Well..Euro' Dollar, Pound, whatever! My money is on (and in) GOLD!!

I've been buying Gold steadily for the last 6 months and now have about 20% of my savings in pure 99,99% Gold. Perhaps I'm paranoid, perhaps I've watched that movie Zeitgeist too often (;)), but quite frankly, I trust NOBODY anymore. Not the politicians, not the bankers and definitely not the media.

Regarding the effect on the Euro and Europe: I definitely think that Europe will get it's fair (?) share of trouble, but it will be mainly due to exports getting hammered because of the strong Euro and the lack of overseas demand. Overall the fundamentals (for whatever that term is still worth these days...) are still a little bit (not much, I admit) better on the mainland than in the US/UK.

I believe that, despite high labor/social costs, Europeans are a lot more conservative with the way they spend money. Working for a UK airline and having spent a considerable amount of time there (and in the US during my training) and it was always my feeling that Brits spend money just as irresponsibly as Americans. Everything on (cheap) credit, mortgaged up to their eyeballs, fancy cars, lavish holidays, a second home in France or Spain. The sky seemed like the limit. That party is over now and the financial fallout will darken the world economy for a considerable time.

The big problem IMHO is not the cost of labor, the problem is (or rather was) excessive credit allowing people to live beyond their means for too long. And the UK/US were champions in handing out credit... :sad:

Here's one of the few people that I still have faith in: Peter Schiff was right. (http://www.youtube.com/watch?v=B8r-nDBx5Jg)

Sallyann1234
2nd Jan 2009, 14:34
rvv500,
As I said before, the diversion into China and India is irrelevant to the Euro which is the subject of this thread, but since you persist with the subject...
Modern History was my second subject and I am an avid reader of history books. I have read several on Asian history of the latter centuries, and while/after visiting India I read "Forgotten Wars - The end of Britain's Asian Empire" by Bayly and Harper. It's on the shelf in front of me now. I consider myself pretty well informed on the subject.
Can we let it drop now please? I have Euro's to earn.

Ancient Observer
2nd Jan 2009, 14:41
All these things seem to have cycles of some sort. I wonder when UKP will be back to €1.5?? I'm afriad my income is in UKP, but I have € outgoings, which is a bad place to be right now......

Track Coastal
2nd Jan 2009, 14:41
Angels, I would like to trade currencies since its a friendlier schedule as a shift worker (Asia/Euro overlap). I have been following, graphing and noting the USDYEN cross but the GBPYEN has some BIG swings (intraday often 100+ pips)...why?

Rainboe
2nd Jan 2009, 14:48
i am in the euroezone and will go to england in the coming weeks and plunder
all i can at discounted prices.
Excellent! This is what the alleged free movement in goods and services in the EC is all about! It is why so many Brits own property in Europe, they made hay whilst the sun shone. Get it while you can. It never lasts. The ordinary plebs like us must take advantage in our small ways while we can. The real giant gains have been made by the currency speculators, and right now I would bet they are starting to look at taking a punt away from the Euro. They, the Soroses of the world, will once again make a big profit as it swings the other way. Only naive fools think the pendulum will stop. They will make sure it keeps swinging!

The Indian thing is wrong wrong wrong. India is very successfully held together as a trading block without military force. It will outlast the Eurozone. China I am not so familiar with- it seems to show no cracks in the edifice. Firm political control and a unified identity seems to do the job.

angels
2nd Jan 2009, 14:57
TC - essentially a lack of liquidity. Wide spreads, small orders moving the market etc. I'd be very careful here.

In fact I've just wandered over and had a chat with our yen guru who confirmed what I said above. The spread at the moment (very quiet today) is over a yen and that's not unusual. "Not recommended," she said.

Track Coastal
2nd Jan 2009, 15:07
Thanks Angels. It looks a bit wild. News schedule in one hand (Tankan, CPI etc etc), technicals on the screen nothing on the horizon and then whoooosh she's orf, then whipsaw back...head scratch.

I think I have many months to go before I put a nickel on the line.

I'm interested in the EURUSD and USDJPY cross and the Euro/USA time overlap (say midday GMT on until London closes) times seems more 'normal' in its technicals, is that the case in the 'profession'?

Doug the Head
2nd Jan 2009, 15:11
Why does everybody think that the pendulum always swings back? :confused:

Did it swing back for the Mongols? Did it swing back for the Romans? Did it swing back for the Greeks, the Ottomans, the Spanish, the Portuguese, the Mayas, or the Incas? No it didn't.

All the above were powerful empires that ruled large chunks of this planet at one time or another, but for them the pendulum did not swing back. Sure, some of them have been able to slow the decay, some have settled for a middle class place, or some (like the UK and US) are keeping up appearances with borrowed money, but sooner or later all big empires come to an end.

Wealth is not a pendulum. Wealth gets transferred/conquered through either peaceful or not so peaceful means.

And neither does wealth get created out of thin air, i.e. by cranking up the printing presses (like Helicopter Ben Bernanke or the UK stimulus packages) or by quantitative easing, or by zero interest rate policies, or financing a lavish lifestyle by taking out the equity out of your house. Sure, it works in the short term, but in the long term we're facing a huge problem! Just look at Zimbabwe or the Weimar Republic.

Track Coastal
2nd Jan 2009, 15:18
I may be outside my doomsayer box, Doug, but the problem MAY be that the wealth isn't there.

The $1 you have in the bank may be funding my margin loan, Rainboe's boat, Sally 1234's investment property and Angel's SL500 AMG as well as your residence.

Doug the Head
2nd Jan 2009, 15:22
I may be outside my doomsayer box, Doug, but the problem MAY be that the wealth isn't there.

The $1 you have in the bank may be funding my margin loan, Rainboe's boat, Sally 1234's investment property and Angel's SL500 AMG as well as your residence. Yup, that's my whole point, see my post above.

It's all leveraged up to our eyeballs and nobody knows who owns what.

Track Coastal
2nd Jan 2009, 15:35
Doug,
google: jessescrossroadscafe ; and
google: http://georgewashington2.*************/

(can't mention the 4 letter word that starts with b and ends with gspot dot com )

George rants a bit about terrorism but if you look at his menu his Credit Default Swaps and unbridled debt stuff from 08 is good. There is a GW site without the '2' but that is a Palinoscopy, Dubya, Cheney da thief love in.

Doug the Head
2nd Jan 2009, 16:01
Thx!

Also try googleling (is that a word?): "The Financial Ninja."

Track Coastal
2nd Jan 2009, 16:13
Rico throws some Jesse into his daily blurb which you can see a day late at Gold Eagle: The End Of The Road (http://www.gold-eagle.com/editorials_08/orlandini123008.html)

Check your PMs

Track Coastal
2nd Jan 2009, 16:32
Also try googleling (is that a word?): "The Financial Ninja."

You and I are doing beers etc. Call when in in North Queensland (anyone that thinks on similar lines...PM)

PS The reason I SPELLED it out earlier is that people dont realise that for every dollar in the bank its loaned 4 to 10 times. DENIAL is still a river. Beer? When? Where?

Doug the Head
2nd Jan 2009, 17:45
Beers sound like a good plan, but I'm not Down Under that often. We'll have to settle for 'online beers' for the time being. ;)

PS The reason I SPELLED it out earlier is that people dont realise that for every dollar in the bank its loaned 4 to 10 times. DENIAL is still a river.Another big misconception that continues to amaze me is that many people still believe that money is actually worth something "because it's backed by Gold stored in massive vaults." :\

Although a Gold standard did not prevent the 1930's Great Depression, I wonder if the abandonment of the Gold Standard in 1971 will make the oncoming economic crisis mellower or worse... :confused:

To get back on topic: no Gold standard means that Central Banks can print unlimited amounts of money to bail everybody out followed by quantitative easing etc, but what about hyperinflation that will inevitably follow? Is that perhaps another reason why the US$ and UK£ are sinking like a rock?

frostbite
2nd Jan 2009, 20:16
Now the 'experts' are predicting yet another cut in the bank rate next week!

Headless chickens come to mind.

Rainboe
2nd Jan 2009, 21:55
The $1 you have in the bank may be funding my margin loan, Rainboe's boat, Sally 1234's investment property and Angel's SL500 AMG as well as your residence.

And you think that's not happening in Europe with a Euro funding a Ferrari, a Fiat, a large Italian powerboat, a summerhouse in Germany and a boat on Lake Constance?

The ones that have not seen this before make themselves obvious! The US will sail into sunshine one day followed by us, and we will look back at the dark skies over the Europe boat and shudder. I hope they are now preparing themselves for the storm- we are already in it and it will soon be over them too. If I was their Captain, I would be having a hot meal prepared quickly and send them all off to have a bowel movement like the sailing ship Captains used to before battle commenced. The Italian sailors will be down in the bilges. The Greek sailors will be at the rum store, the French having a quiet smoke...... What that crew in a storm will be like does not bear thinking about!

angels
3rd Jan 2009, 09:29
Right. Back to GBP/EUR. UK money markets are pricing in an 80 percent chance of a cut in interest rates to 1.25 percent on Thursday (from two percent). It'll be 50 pips at least and while I have a 'don't be surprised if it's a full point' feeling, 75 pips is probably right.

This compares with the ECB refi rate of 2.5 percent.

In the States we already have quantative easing in place. Interest rates are at zero to 0.25 percent and the Fed is buying all sorts of crap from the banks.

By rights the dollar ought to be through the floor, but the old mindset of hanging onto dollar in time of crisis still persists -- how long for I don't know, wish I did.

Trichet is pretty conservative and I can't see him cranking up the printing presses. And anyway, because of the diverse nature of the euro zone economies, he can't. So the euro zone will have an interest rate advantage over the UK for some time to come.

This means the euro will stay strong until the combination of German exporters (Germany is still the biggest exporter in the world) and domestic European politicians cry foul as economies in the eurozone contract.

That will be the time to dump the euro and buy sterling. Sterling could be as low as 0.90-0.85 before this happens -- or we may have seen the floor already (doubt it).

The devil is in the timing detail. If I was able to time this sort of thing perfectly I would be sitting on a yacht off the Bahamas writing this, rather than in an empty trading room in Canary Wharf!

Doug the Head
3rd Jan 2009, 11:01
By rights the dollar ought to be through the floor, but the old mindset of hanging onto dollar in time of crisis still persists -- how long for I don't know, wish I did.Good point, but don't forget that the recent rally in the US$ was mostly caused by deleveraging. I.e. big (hedge)funds selling large amounts of foreign stocks (particularly in developing nations) and converting the proceeds back into US$ to quiet nervous investors wanting their money back or plug the holes in the balance sheets.
This means the euro will stay strong until the combination of German exporters (Germany is still the biggest exporter in the world) and domestic European politicians cry foul as economies in the eurozone contract.

That will be the time to dump the euro and buy sterling. Agreed that the € will take a beating in the future, but give me one compelling argument why people should be buying £'s?

The UK does not have a significant production economy and coupled with the huge amount of consumer debt, it does not exactly offer a rock solid foundation where investors can safely park their money.

Ask yourself: "what does the UK actually have to offer to the rest of the world which will increase the demand for UK£'s"
Great cars? No, Germans and Japanese make better ones. Tourism? Hardly. Other top quality machinery? Nope. Food, or produce like grain etc? Nope.
The only two trump cards in the UK economy are the oil and gas industry and the banking industry. Well, oil is priced in US$'s and the banking industry is in tatters. People don't even trust bankers with their cash anymore and even go as far as to prefer the (perceived!) safety of US T-notes with zero % yield. Why would anyone convert their hard earned €'s or Yen into £'s and give it to a London banker?

The rest of the UK economy is based on consumption, fueled by a boom in real estate prices and reckless lending/cheap credit. Just like in the US... :\

The Euro (or Yen or Swiss Frank for that matter) is not great, but it's the choice of lesser evils.

Elephant and Castle
3rd Jan 2009, 11:47
The $1 you have in the bank may be funding my margin loan, Rainboe's boat, Sally 1234's investment property and Angel's SL500 AMG as well as your residence.

Well yes but the fact is that Rainboe´s boat does exist, so does the SL500 and the residence. They have not disapeared and they are still real assets, what has disapered is the money to finance them. Why? banks have been allowed in the last ten years to print money (digital money) by multiple leveraging and off balance sheet lending. The sudden crash has forced the banks to deleverage and rebuild their balance sheets hence destructing a large part of the additonal (digital) money created in the last few years, as a result we have had a very sharp reduction of the money supply. There is just not enough of money to pay for all the assets (some real some not) we have. Central banks are frantic trying to expand the money supply again by printing more money (ie quatitave easing). Sharp increases in inflation can be avoided in due course provided the ability of banks to print money again is controled once normality resumes in the markets.

Some of you get a little too hot under the collar me thinks.

angels
3rd Jan 2009, 12:12
give me one compelling argument why people should be buying £'s?


I'm not saying you should be shipping in sterling!

As has been mentioned in this thread, the pendulum will swing back. I just don't think it's going to happen in the short term.

And, just thinking about it, don't forget geopolitical factors. The only stuff of note going through on the wires this morning has been Russian sabre-rattling at the Ukraine over gas.

This could develop into a full blown energy crisis, affecting the bulk of Europe, or it may not!

ORAC
3rd Jan 2009, 12:22
Ask yourself: "what does the UK actually have to offer to the rest of the world which will increase the demand for UK£'s"
Great cars? No, Germans and Japanese make better ones. Tourism? Hardly. Other top quality machinery? Nope. Food, or produce like grain etc? Nope.

Wikipedia: Economy of the United Kingdom (http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom)

Manufacturing: The Blue Book 2006 reports that this sector added gross value of £147,469 million to the UK economy in 2004.....

UK Government statistics, exports by industry Quarter 3, 2008: (http://www.statistics.gov.uk/downloads/theme_economy/Mq10Q308.pdf)

Manufacturing: 58,459M........
Total exports: 65,838M

Lon More
3rd Jan 2009, 12:44
Bit selective with the quote there ORAC

From the same entry

It is one of the strongest EU economies in terms of inflation, interest rates and unemployment, all of which remain relatively low. The United Kingdom, according to the International Monetary Fund, in 2007 had the ninth highest level of GDP per capita in the European Union in terms of purchasing power parity, after Luxembourg, Ireland, the Netherlands, Austria, Denmark, Sweden, Belgium and Finland. However, in common with the economies of other English-speaking countries, it has higher levels of income inequality than many European countries. During August 2008 the IMF has warned that the UK economic outlook has worsened due to a twin shock: financial turmoil as well as rising commodity prices.[6] Both developments harm the UK more than most developed countries, as the UK obtains revenue from exporting financial services while recording deficits in finished goods and commodities, including food.

The UK has the world's third largest current account deficit, despite significant oil revenues. This is mainly the result of a large deficit in the trade in manufacture goods. During May 2008, the IMF advised the UK government to broaden the scope of fiscal policy to promote external balance.[7] Although the UK's "labour productivity per person employed" has been progressing well over the last two decades and has overtaken productivity in the united Germany, it lags around 20% behind France's level, where workers have a 35-hour working week.[8] The UK's "labour productivity per hour worked" is currently on a par with the average for the "old" EU (15 countries)

Doug the Head
3rd Jan 2009, 12:49
Of course the UK manufactures and exports stuff, just like just about any other economy in the world. That's not the point.

The point is, it's all relative. Compare the UK manufacturing relative to the Euro Zone, or Japan to get a more complete picture. Or compare the UK manufacturing industry relative to the UK financial or services industry. Compare the debt ridden UK financial sector to the relatively more comfortable, cash rich, position of Swiss or Hong Kong banks with relatively less exposure to toxic banking products.

And then see how the exchange rate of the Pound fluctuates relative to the Euro.

I'm not saying that the UK has nothing to offer. I'm merely saying that other countries/economic blocks have better (read: less riskier!) things to offer. It's all relative mate, nothing personal or nationalistic. The choice of lesser evils thingie... ;)

Sure, the pendulum might swing the other way, but with the current measures being taken (i.e. more of the same: cheap credit, lower interest rates, quantitative easing etc) I don't really see that happening. The UK and US are merely exchanging one bubble for another. :(

ORAC
3rd Jan 2009, 12:51
Nothing there contradicts the fact that, contrary to Doug the Head's assertion, the UK does possess a sizable manufacturing industry - including the motor industry.

Flap 5
3rd Jan 2009, 13:03
Agreed that the € will take a beating in the future, but give me one compelling argument why people should be buying £'s?



Because it's cheap. If it stabilizes then some will buy it just because it is cheap and will bring a profit when it rises.

Doug the Head
3rd Jan 2009, 13:05
GM shares are cheap as well, and Lada's are cheap cars. Shares of Lehman Brothers were trading at a fraction of their all time high a few days before they filled for Chapter 11.

Would you buy either one of them?

Remember: they are cheap for a reason!

That's why I don't believe in this "pendulum" bullsh!t. Sure, if some factors change (sensible economic strategy, or a new management with GM), then the pendulum might be pulled back. But it's not an automatic, given fact just because shares or a currency is cheap.

Lon More
3rd Jan 2009, 13:37
sizable manufacturing industry - including the motor industry.

What motor industry?

Nissan - Japanese
Vauxhall - rebadged Opels (and likely to disappear completely if/when the German GM branch is sold off)- German
MG -Indian this week I believe
Rover - finally been put down?
TVR - ?
Lotus - still struggling from one catastrophe to another
Jaguar/Land Rover - Ford, but for how long?
Bentley - VW
Just leaves Morgan and RR I believe as indigenous manufacturers

Doug the Head
3rd Jan 2009, 13:40
Spot on Lon More.

One more for the list: Mini owned by BMW.

p.s. isn't Rolls Royce also owned by BMW?

Storminnorm
3rd Jan 2009, 14:23
TVR....Isn't some Russian investing in them?
RR..... V/W Audi group? Maybe not.

What about Handley Page
Avro.
Vickers
De Havilland

Whoops, aviation again! :*

Lon More
3rd Jan 2009, 15:52
Ad running from time to time here
http://i6.photobucket.com/albums/y204/Badyin/ScreenShot077.jpg

I hope their financial advice is better than their spelling

Yak97
3rd Jan 2009, 15:53
Jaguar/Land Rover - Sold (given away?) to TATA Motors (India) - already been out with the begging bowl

Lon More
3rd Jan 2009, 15:58
Thanks Yak, i don't really keep up with what'happening in the motor industry anymore.

I think the Russian dumped TVR _ and bought a football club? :E Reckon it's time the bubble burst there too.

Just leaves Caterham and the F1 teams, nice cars but, development of the motor vehicle aside, bit of a dead end as far as sales are concerned

Squeegee Longtail
3rd Jan 2009, 16:05
...You've all forgotten the Great British Spirit. That's priceless. Apparently, that's what is going to pull the UK through (according to Gordon The Leader). Is there a futures contract in that? I feel like going short.

Doug the Head
4th Jan 2009, 10:40
Another interesting link:

Industry calls for lowest Bank rate in 300 years. (http://business.timesonline.co.uk/tol/business/economics/article5439347.ece)

Interest rates dropped from 5% to 2% since October, without doing much to stimulate the economy. I quite honestly I don't see how lowering interest rates even more will encourage the heavily indebted public to borrow more money to jumpstart the economy. Banks simply aren't lending, or are not passing on the lower base rates to the public and consumers are hoarding cash.

I guess the downward slide of the Pound is not over yet. Parity this week?

Rainboe
4th Jan 2009, 10:55
For those of yoou that think the UK has entered a final, terrible death dive and is firmly 'on the rocks', what do you make of this Sunday Times article: (http://business.timesonline.co.uk/tol/business/economics/article5404351.ece):
Britain is fast becoming the poor relation in the club of the world’s top economies because of the deepening recession and the plunging value of the pound.

The Oxford Economics consultancy, which only a few months ago reported that Britain’s living standards had overtaken those in the United States, will disclose this week that the country has suffered a sudden and savage slide down the global rankings.

This is the economic reality behind the pain that many travellers have been discovering over the holiday period. Even on the shortest trip across the Channel, Britons no longer have much purchasing power. The big spending days may be over.

Last year, according to the Oxford calculations, Britain was better off on average than other G6 countries – the top world economies (United States, Germany, Japan, France and Italy).

National income (gross domestic product) per head last year, expressed in dollars, was $45,970 in Britain, $45,830 in America, $40,925 in France, $40,405 in Germany, $35,586 in Italy and $34,244 in Japan.

So, up until recently, how did this 'totally failed' economy achieved the level it did? And now we are in terminal decline? Or maybe slightly ahead of Europe in a slump? How ever did the UK reach those lofty heights not building ships or cars or 'anything of value'. But mysteriously it did. Sure enough now because of rapid currency fluctuations, it has slid down the table. Nemesis has still to come to Europe.

Then is it a problem we don't do industrial things like building cars and aeroplanes anymore? Should we? Paying workers 30 or 40 Euros (or more with social benefit costs) an hour to do something that Chinese workers will soon be too happy to be doing for 1 Euro an hour! When I was in Chennai a few years back, a Ford factory to produce stripped out Fiestas was opened paying workers 1500 Rupees (a month! Think about that- £20/month!). How does the German, Italian and French car industry handle this- is it going to be looking like Ford and GM soon? Does anybody really still believe the structural problems in Europe are not the same as the UK, they are just at a different phase? How do we believe the French and Italian economies will suffer when the storm hits Europe? Is a European industrial manufacturing economy going to become a millstone much like Britain's coal industry in the 70s- a complete waste of money and lives when furriners can import it far cheaper without losing Brit lives to boot? The only industry that will work in Europe is higher intelligence industry- not FIAT/Citroen/Peugeot, or bending metal in high worker and social cost European factories when there are several billion very low cost Far East workers itching to grab those jobs.

And just as it becomes really important, Europe has allowed itself to get caught pants down with an overvalued currency that will kill exports and Airbus sales, and everybody thinks 'well done Europe! Tough guy!'. Just wait till the factories start closing because nobody can buy European goods because of the absurdly overvalued currency- the economies break because of their absurd excessive unemployment benefit costs. Be alarmed- Europe is in for hell.

And they want us to join the Euro? Stand back everybody- this is going to be interesting as it implodes!

Flap 5
4th Jan 2009, 11:08
Just leaves Caterham and the F1 teams, nice cars but, development of the motor vehicle aside, bit of a dead end as far as sales are concerned

Morgan? Marlin?

Sallyann1234
4th Jan 2009, 11:24
@Rainboe
And they want us to join the Euro? Stand back everybody- this is going to be interesting as it implodes!

One of us will have great fun looking back at these posts in a few years' time when the dust has settled :):):)

Yak97
4th Jan 2009, 11:35
I feel that one of the problems the UK has is that, from being the power house of the industrial revolution, the pendulum has swung too far the other way now.

How can an economy survive if we are all service industry based? There needs to be an element of actual production somewhere is the economy on to which the service industries can then support.

Remove the car plants, aircraft making, computers, and the "heavy industries" such as coal mining, ship building etc (which used to keep a large proportion of the male workforce employed) and what do you have? There are only so many hairdressers, call centres, mobile phone shops etc that an economy can support.

Much is made of the design & technology opportunities. Yet look at one of the cutting edge technologies - nuclear power, which will come back in to prominence in the next few years. The last surviving UK manufacturer was sold to the Japanese (by the Government) only months before the Government announced that new nuclear reactors were needed! So in one fell swoop the manufacturing, and associated research & development jobs go overseas, and we announce that we need the French to build our reactors!

Although a fan of MT I feel this is one area where she was wrong, but taking account of all the troubles she had to face I'm not surprised that she took that path.

IMHO the problem with the financial side of service industries is that they inject little into the infrastructure side of the economy and, if the rules change, they can move to another country at the drop of a hat. See the departures after the non-dom tax rule changes and those industries, currently UK based who are considering moving their head offices away from the UK.

Do I have any answers? Not easy or short term answers, no.

Part of the blame must rest with "short-termism" in the stock markets, a Company is only as good as its share price now (and that distorts the views and approaches of managers).

The other part must lie with the Government. The role of Government must be to provide the bedrock on which successful business can thrive. So the tax burden must be seen to be fair and transparent and, ideally, low. The red tape must be kept to a minimum while regulatory functions need to work and have the necessary muscle (and nerve) to control Companies not abiding by the rules. The education policies should be based upon producing a well educated workforce (and that doesn't mean loads of graduates with nonsense degrees). The transport infrastructure should be that of a 21st century country (and that does not mean that Government needs to run it) Subsidies, if necessary, should be fair and evenly spread. And finally Government needs to keep out of the way of running businesses. Successful Companies thrive and unsuccessful Companies go out of business - fact!

Doug the Head
4th Jan 2009, 11:56
So, up until recently, how did this 'totally failed' economy achieved the level it did? And now we are in terminal decline? Or maybe slightly ahead of Europe in a slump? How ever did the UK reach those lofty heights not building ships or cars or 'anything of value'. But mysteriously it did.It did so by consumption financed by increasing real estate prices. With falling property prices that house of cards is collapsing leaving nothing but debt, and very little manufacturing industry or savings to pay for it.

The only way out is to inflate the currencies (by running the printing presses and quantitative easing) to such an extend that not only the currency is worthless, but so are the debts and savings. Hence people pulling out of the US$ and UK£.

Avitor
4th Jan 2009, 12:06
For the last 7 years, after the 4 years it took to ditch tory fiscal policies, the citizens of Britain have been living in a false economy, one fabricated to project Gordon Brown as a genius.

He thinks he still is a genius, sorry Gordie, you are not! You have managed to sell Britain down the river.

Plan B? I think you have already mentioned it, you are going to make more money out of the myth of global warming.....sorry, climate change.

Rainboe
4th Jan 2009, 12:41
Sorry to flog this to death, but some of you are making comments about the UK economy that are not justified on current evidence. I know it is as mysterious to me, but how did the UK GDP/person get to the levels it has done producing this
Last year, according to the Oxford calculations, Britain was better off on average than other G6 countries – the top world economies (United States, Germany, Japan, France and Italy).

National income (gross domestic product) per head last year, expressed in dollars, was $45,970 in Britain, $45,830 in America, $40,925 in France, $40,405 in Germany, $35,586 in Italy and $34,244 in Japan., when some of you are saying:
Ask yourself: "what does the UK actually have to offer to the rest of the world which will increase the demand for UK£'s"
Great cars? No, Germans and Japanese make better ones. Tourism? Hardly. Other top quality machinery? Nope. Food, or produce like grain etc? Nope.
The only two trump cards in the UK economy are the oil and gas industry and the banking industry.

My understanding is you cannot simply manipulate GDP to lever yourself up the table, otherwise Italy would be the greatest economy in Europe (it only manages to get up the table where it is by allowing an 'estimated figure for the black economy (Mafia!)' to be included in GDP! The UK has been doing something, and long-term, it is doing something very right. Getting out of manufacturing which can be done by billions in the Far East for less than 1/10 the cost. It is good in Finance, and intellectual added value (schools and unis), and Cheddar Cheese. It is NOT a dead economy, it is merely currently 'resting', with its eyes closed. We survive on our financial sector, which is brilliant, and education/intellectual stuff. All of which Brown is trying to attack, and no wonder they want us into the Euro- Europe can't steal leadership in those sectors away in a separate economy, but it can muscle its way in and transfer leadership in a united currency. The start, if/when we join the Euro, will be the forced transfer of ALL our remaining gold reserves that Brown didn't sell off (and that is partly the root of the current problem) from the Bank of England to Frankfurt. What an insane prospect- like forcibly sending all carmaking machinery overnight from Germany to the UK!

This 'genius' running the country is to blame for the depth of our recession. His cure is going to make things worse. But despite having a total twerp at the helm, we will still sail out of this storm one day...while Europe is still suffering the storm yet to hit them.

And here it comes (from the Sun Times):
When political mischief is afoot, it is likely that Lord Mandelson will be involved. As the pound sinks towards parity with the euro, a whispering campaign is under way suggesting that Britain would do well to abandon weak sterling and enter the robust currency across the Channel.

Jose Manuel Barroso, president of the European commission, has commented that “people who matter in Britain are thinking about it” and musing that “if we had the euro we would have been better off”. Given that Gordon Brown is unlikely to have said that, and that Peter Mandelson is a former commissioner who has stated that “our aim, our goal, should be to join the single currency”, I know where my finger points.

So is it all manipulated? Do they want to 'save' us? Or get us to think they can 'help' us whilst the ulterior motive is to grab the City pre-eminence? Be afraid, Hearts of Oak! Napoleon and Hitler failed, now they are doing it with worms like Mson! The Euro is going to be toxic, and they want us in there! Why?

BombayDuck
4th Jan 2009, 12:59
It is NOT a dead economy, it is merely currently 'resting', with its eyes closed.

Just pining for the fjords, eh? ;)

Lon More
4th Jan 2009, 14:55
Flap 5 I mentioned Morgan in the original post, but Marlin? I doubt if the entire British kit-car industry turns over more than £5-6m. p.a.

Though on second thoughts would still put them near the top

corsair
4th Jan 2009, 16:45
There is, I note a consistent oft mentioned theme in this thread.

Ok, the UK is in recession, sterling is losing value. But that's nothing compared to what's going to happen in the Euro zone soon.

The Euro is going to be toxic

And they want us to join the Euro? Stand back everybody- this is going to be interesting as it implodes!

Wait till Euroland plc starts feeling the recessionary bite.

What has now happened is that the Euro is vastly overvalued in world terms. The cold winds of recession will bite strongly in Europe next year.

All through the thread the same theme.

I'm no financial expert but doesn't that imply the rest of Europe isn't in recession right now? I have a feeling most of the Euro zone is quite relieved that Britain stayed out now as it most certainly would have dragged the rest down with it by now.

There were and are lots of predictions of the Euros demise in this forum and elsewhere over the years, often used to justify the UK staying out. Well as far as I can see it's Sterling that's in trouble along with the UK not the Euro. Odd that.:confused:

Rainboe
4th Jan 2009, 20:27
Well Ireland IS in the Euro. The property problems in Ireland are quite extreme, Irish industry is in distress as well, and the Eurozone is heading into choppy waters. See how it weathers the storm.

I'm not trying to make a point about comparative levels of misery now. We are at different phases of the cycle. It is quite possible measured in retrospect, the UK will be more severely affected than needed thanks to awful Labour spending habits and selling UK gold reserves at a knockdown price, but the UK is ahead of Europe in this cycle. When the Euro is severely tested, it will be interesting to see whether the pillars of strength of the Euro continue to have patience and carry the less disciplined economies of Europe, which also have hopelessly missed their allowable spending targets and are also running overhigh deficits.

A sense of balance was needed after reading some of the comments here that would give the impression that the UK was the only country in terminal decline.

1DC
4th Jan 2009, 21:08
Son in law said to me the other day that whilst all the stories and reports are doom and gloom he has never been so well off. As long as he keeps his job everything is rosy. His mortgage is the cheapest he has known, prices in the shops are the most competitive, petrol is back to reasonable prices. He has never had it so good and assumes everyone in work must be feeling the same..

corsair
4th Jan 2009, 23:30
Well Rainboe, the point about Ireland is that we are heavily connected to the UK. Though we like to pretend otherwise. The drop in sterling is killing our exports because, despite our conceit we depend on the UK to buy our stuff to a large extent.

We are also very much like the UK in terms of property ownership and attitudes to same. So we are in recession for pretty much the same reasons as the UK. However we are little and won't effect the Euro to any degree.

The reality is that we probably should never have cut the link to sterling in 1979 when we did. We're paying for that now.

None of this changes the basic problem of the UK economy and sterling and it's relationship to the Euro.

angels
5th Jan 2009, 09:09
Ranboe - a 'sterling' defence sir! Of course its total cobblers that Gordon Brown is responsible for the UK's current recession, but let's leave that for another thread! :E

Okay - we've been sidetracked by the car industry. Herr Draper has a link to a Tyneside webcam. There are always stacks of parked cars in view. I assumed they imports. They're not, they're exports. It doesn't matter per se if the profit ultimately ends up in Japan. Those cars are built by British workers and contribute to Britain's GDP.

corsair - the eurozone IS in recession. It happened officially on November 14 last year. Buba chairman Axel Weber thinks it will remain recession in 2009.

One of the reasons for the euro's strength against sterling is the interest rate differential.

Finally, the pendulum effect does occur. Period.

Lon More
5th Jan 2009, 09:40
http://i6.photobucket.com/albums/y204/Badyin/financialcrisis2.jpg

A solution for the UK banking industry?

GOLF_BRAVO_ZULU
5th Jan 2009, 10:34
Finally, the pendulum effect does occur. Period.

That, of course, is the question; what is the period?

angels
5th Jan 2009, 11:02
Golf Bravo - Totally fair question, and one to which I don't have a definitive answer.

See my earlier post about about sitting (or not) on a yacht off the Bahamas!!

airship
5th Jan 2009, 11:40
Rainboe wrote: A sense of balance was needed after reading some of the comments here that would give the impression that the UK was the only country in terminal decline. "...that the UK was the only country in terminal decline." Over the past few decades, decadent western democracies have increasingly bent-over backwards to accommodate the interests of multi-nationals and capitalist investments in general, in terms of generous tax-deductions, subsidies etc. (didn't that sound like something the ex. USSR might have spouted-forth though...)?! In this early 21st century, multi-nationals and capitalists of all sizes have by now discovered how easy it is to manipulate the countries in which they operate. Playing one EU member's aspirations to maintain production facilities against another's for example. All the while, maintaining their independence - today's multi-nationals and capitalists have absolutely no regard to country or allegiance.

This is what the average decadent westerner ca. 2009, spends his after-tax income on, in order of importance:

1) Their abode (whether buying or renting)
2) Food
3) Energy
4) Health care
5) A car (or spending on other transportation)
6) Domestic appliances
7) Entertainment
8) Their old-age

The average westerner should be asking themselves just how many of their neighbours actually continue to produce any of the above because they don't actually make anything (instead of merely being consumers)...?!

Because meanwhile, supported by our governments' tax deductions and subsidies, the multi-nationals and capitalists who've no longer 'any fixed abode' massively offshore their production investments. Renault cars are increasingly being manufactured elsewhere in the EU where salaries are 1/10 of those in French plants. Airbus will soon be building A320s in China.

What is the combined population of China and India (and the labour force available to an uncontrolled capitalism?) compared to the the current populations of western Europe and the USA for example? Our governments are currently allowing capitalists who have few compunctions, no allegiances etc. literally a free-reign when it comes to production and free-access to markets without any liabilities. UK has always been a trading nation. But in today's economy, it would appear that the traders (or at least their profits) are increasingly based offshore, with the benefits ending up in the hands of a very few individuals and companies.

The major worry today is that our elected-representatives not only recognise these discrepancies, but continue to feed them, with at the end of the day, some major issues concerning personal enrichment. The income of public officials should be monitored at least 10 years after leaving public oiffice as a minimum... :}

yakker
5th Jan 2009, 15:12
Rainboe We survive on our financial sector, which is brilliant

So brilliant Gordon is using tax payers money to keep it solvent.

Rainboe
5th Jan 2009, 15:30
Our financial sector covers far more than banks with exposure to toxic property loans! London is the major Fund HQ, the greatest Pension administration centre (along with Scotland- still in UKplc for the time being!), the major Insurance centre in Europe with Lloyds, a massive banking centre, the biggest share and bond centre in Europe, a major currency exchange centre, oil and commodity trading centre.......is it any wonder Europe would like some or all of these to move across the channel to Frankfurt/Paris? All those suits on those trains to London are not just screwing-up hedge fund people and bankers- most of them are highly productive (for UKplc).

We can't bend metal any more in competition with billions of Asians on a dollar a day. For our survival, Europe must find another way to earn its keep in the modern world. It involves education and high IQ stuff, not digging coal and making metal gates. German cars are surviving on their perceived quality......Italian and French car industries? Doomed. Aviation is a good industry, but the actual metal bending will emigrate. The frightening thing about European industry is that it is so badly placed for the next few decades. Cars will be gone. It's amazing Nokia survives in Europe. High tech weaponry, advanced computers and software (but even that is almost gone to China and India), wine and food. Not many other things, are there? Think about it, there is no way Europe (inc UK) or the US can maintain its standard of living in the 21st century- we cannot pay for ourselves or our current standards. We all have a big problem, not just the UK.

Storminnorm
5th Jan 2009, 15:37
Tourism? We could all live in round houses as a tourist attraction.

yakker
5th Jan 2009, 16:44
It seems to me the modern world revolves around one thing, manufacturing.

Oil industry, used to power and lubricate machinery, that has been manufactured.

Tourism, people come here on aircraft and ships, then use taxis, trains and buses to get around, someone needs to manufacture these.

The City, office block, computers, satellites, communications, manufactured.
Insurance, mainly manufactured goods. City bonus, spent on a Bentley, manufactured.

Food, tractors, combines etc...manufactured.

Weapons, manufactured.

Property, bricks, piping, sinks, cables, diggers, manufactured goods again.

So why is it we do not manufacture any more when it is central to the modern world? Just because it is cheaper to do something abroad doesnt make it right to do so.

You talk of education. Rolls Royce have started to employ Chinese graduates due to lack of interest in the UK, and found them better educated than those in the UK. We have lowered our standards so everyone gets a degree.

High IQ stuff, whats that? Most research is done to progress the industry you are in. If we have no industry, we have no research. But what is high IQ, do you not think that car manufacturers do not need good scientists and engineers.

You poo poo coal mining, but how will we produce the power required in the future to keep all our electronic goods going? Wind power alone? Even the Nuclear industry has gone, and we need the French to build the latest power stations. This Government has also now sold AWRE to the USA, so this could leave the country.

Cars will be gone, why are we not going to use them anymore? If we are, how will we pay China and India for them? China has gone into space, for the fun of it? The USA developed many of the products we use today off the space program, they will do the same. When they are rich, will they send their manufacturing to us as we will be doing bugger all else, in debt and poor. Wages will be low, tax high, cheaper in the UK. Its a way off but its coming. Or do we kid ourselves property values are the answer, bugger we did that and it hasnt worked.

frostbite
5th Jan 2009, 16:50
Last time I looked, the Pound was having a rather good day against the euro.

Perhaps the speculators have moved on?

cockney steve
5th Jan 2009, 17:58
The bottom-of-the-heap, cerebrally challenged are conned by the "education" system and the government conspirators, into thinking they can hold down a clean, well-paid job.

Well, sorry, it isn't so!....SOMEONE still has to shovel shit, even in the most "civilised" societies.

Menial jobs deserve menial pay...the knuckle -draggers have to understand they are at the BOTTOM of the food-chain....those above them, doing a more demanding job, DO deserve better pay.......however , when we get to the wide-boys in red-braces , who have now been PROVED to have done little more than "cardsharping",walked away with a substantial "skim2 from the purported profits they purportedly generated......they were paid out of all proportion to their "contribution" to society.

We have now seen the truth about the Emperors 'new clothes.

One wishfully thinks that governments will learn, but Blair's career would indicate that the trough is still available to the few in the club.


As usual, the vast majority in the middle, get shafted by those above and below.

cynic? moi?:rolleyes:

acmi48
5th Jan 2009, 18:54
speculators back on the oil..
.........

oil is slowly on the move up - a gain of 10usd barrel on nymex in a week- with the gaza factor included and looking like opec sticking to production levels agreed jan 1 more increase than decrease on the horizon maybe??

and just as it gets really cold aswell.. :ooh:

SpringHeeledJack
6th Jan 2009, 18:06
Pound in biggest rise on euro since debut in 1999 - Stocks & Markets - Independent.ie (http://www.independent.ie/business/stocks-markets/pound-in-biggest-rise-on--euro-since-debut-in-1999-1592848.html)

It would seem as if the pendulum is about to swing in the other direction, a definite possible maybe ;) It makes you wonder if the ECB cut rates and savers are getting shafted there too, where the hell is all the money going to be invested ?

I wonder if this is how a puppet feels when the puppeteer is pulling the strings ? :*


regards


SHJ

Squeegee Longtail
6th Jan 2009, 19:45
Oh come on! The UK economy and GBP isn't exactly out of the woods yet. It's all just starting. This is a blip, not a recovery. Bets anyone?

Yours,
"Shorty" Seller

Rainboe
6th Jan 2009, 20:46
Bank rates are coming down for a very good reason! It is not out of sympathy for mortgage borrowers- the banks are ahead on that one- they have capped their minimum loan rates so they can charge a healthy whack whilst giving savers an incredibly low loan rate. The real reason the Bank of England and other central banks is relentlessly driving down rates is to force people to start investing in securities again. Traditionally as bank rates fall, stock markets go up. It's to force that tsunami-wall of money that has left shares back into the stock markets. And it appears to be working, but will it work enough? I believe from the depth this recession has reached that a 1/3 fall in the FTSE is not enough to cover the pain that is being felt by all industry. If that is right, then it is producing a sucker rally and we are in for a further large fall and flat market.

I just cannot see the stock market recovery is here yet! Beware.

BlooMoo
6th Jan 2009, 22:09
This is what the average decadent westerner ca. 2009, spends his after-tax income on, in order of importance:

1) Their abode (whether buying or renting)
2) Food
3) Energy
4) Health care
5) A car (or spending on other transportation)
6) Domestic appliances
7) Entertainment
8) Their old-age

Alternatively, your average peasant in the East spends his (or her) after tax income on, in order of importance:

1) Their abode (whether buying or renting)
2) Food
3) Energy
4) Health care
5) A car (or spending on other transportation)
6) Domestic appliances
7) Entertainment
8) Their old-age

Spending habits eh? Can't live with 'em, can't live without 'em.

Scumbag O'Riley
7th Jan 2009, 09:18
One has one's household accounts in the computer and the glaring ommision in that list is Council Tax, which in our household comes in at number three. (unless you don't call that 'after tax', which would be incorrect, as comes out of taxed income. Feckers)

The O'Riley family has Alcohol itemised in the 'puter and it comes in the top eight :eek:

D SQDRN 97th IOTC
7th Jan 2009, 15:24
Rainboe

i am not sure how money leaves the stock market. For me to sell my shares, I need to find a buyer. The net flow of money is zero. For the wall of money to have come out of the market, a corresponding wall of money must have gone in. (Not counting new issues of securities, or redemptions / share buy backs.)

Not sure about the statement that as bank rates fall, stock markets go up.
Perhaps when the rate cut is unexpected, or is larger than anticipated, then the market may go up short term. But rates now are a lot lower than they were a couple of years ago, and so is the market. Have a look back at the early 90s in the USA and UK. Or if you want to go further back, read a book about the performance of the stock markets over the last 100 years called "triumph of the optimists" by professors Marsh...etc.
I would say in general when rates are cut, that is a sign the economy is struggling, and a bit of stimulus is required, and that struggle is often seen in a weak stock market.

Also not sure about the authorities trying to drive money out of banks and into securities. The biggest problem banks are facing right now is liquidity. (It's why some of them went under...). So why would the authorities deliberately try to reduce the deposit base with banks?

OFSO
9th Jan 2009, 14:44
Has anyone else noticed this gem ?

On the MONEY page of SKY News interactive, the finance wire gives the pound/euro at 1.12 right now.

Underneath SKY notes you will receive 1.25 euros for your pound.

Alistair Darling must be doing the figures.

RaF

BenThere
9th Jan 2009, 15:30
The EU hasn't faced the meltdown to the extend the UK and US have, but the drip of daily economics numbers inexorably will force EU central bankers to recognize the damage that has been done to the export-based economies, most notably Germany, who are the engine for the wider EU economy.

There is no real alternative but for the euro to join the competition and lower itself in order to try to kickstart its increasingly moribund manufacturing/export sector. We'll see it soon enough.

As the importers of EU products, and investors in EU assets are themselves tapped out with their own problems, the pressures on the EU structure itself from diverse quarters promise to be immense.

The fireworks should be impressive.

Rainboe
15th Jan 2009, 15:16
Well this thread has gone awfully quiet after the hysterical cacophany of voices shouting 'the UK is finished- it will sink under the North Sea, everybody bale out while you can!'. BenThere's post is very preceptive and a very accurate take on the current situation.

As it seems so important to some, let's have a cool, retrospective look at the recent fluctuations:
Exchange Rates Graph (British Pound, Euro) (http://www.x-rates.com/d/EUR/GBP/graph120.html)
It would suggest that the Pound swung too low (as is normal in wild currency changes), and the pendulum may indeed have started swinging the other way as the Eurozone follows the US and UK down that muddy trail (BBC NEWS | Business | Eurozone officially in recession (http://news.bbc.co.uk/2/hi/business/7729018.stm)). Good time to go holidaying and shopping in the UK, maybe we will get used to legions of French families buying up UK properties in the future! Whatever, it will benefit them, and it will benefit the present incumbents of those properties too. The point is, currency exchange rates are not vitally important to the long term wealth of a country, and free trade is vital for the health of any economy.

I don't think many are betting on the strength of the Euro in future trades now, just a couple of weeks after this discussion, and maybe you should get it while you can, because these present rates will not last! All we are seeing at the moment is visual evidence of the difference phases in economic cycles between US/UK (themselves slightly out of phase), and the Eurozone. Indeed, the storm is now hitting us all! Look to the US boat for the first glimmer of sunshine hitting the sails- unfortunately not evident yet!

Shack37
21st Jan 2009, 10:37
Some sobering comments in the Torygraph, eg "sterling is finished" Hmmmm.



We have every right to be angry with the bankers - Telegraph (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4301285/We-have-every-right-to-be-angry-with-the-bankers.html)

ORAC
21st Jan 2009, 11:31
How Much Rope Does Gordon Brown Need (http://www.telegraph.co.uk/comment/columnists/simonheffer/4298226/How-much-rope-does-Gordon-Brown-need.html) :suspect::suspect:

Sallyann1234
21st Jan 2009, 12:11
No doubt Gordon will be scuttling off to Washington to be photographed shaking hands with his new best friend, just as soon as Obama can spare him a minute.

airfoilmod
21st Jan 2009, 12:26
Perhaps the writer of the article should read PPRuNe. Pay back the Depositors, yes, Sell off the Bank's assets? Banking is a license to pretend at wealth. Where, pray are the Banks assets? Promissory notes on mortgages extended? sorry, only the future interest belongs to the Bank, the Land is floored by wealth entrusted to the Bank; not by the Bank. People who own wealth own Banks to augment and create their holdings.

Solution? The "Bank" started as a secure place to store solidity (wealth). In an electric economy, and without the need for it, cash is not necessary. The "Bank" is a broker, as is the commodities mercantile, and the silo combine that STORES the grain, they don't grow, produce. manufacture, or create "real" stuff. As liquidity dilutes, the Bank's unclothed persona becomes more apparent to even the thick of us.

And it is permitted, nay, encouraged, this "bailing out" ? Save the "money" for the ultimate repayment of those who trusted the weasels with their wealth, it belongs to others, going in, AND leaking out.

And, somebody bail out poor Gordon by buying him a better hairpiece.

Rant at closure, AF

CUNIM
21st Jan 2009, 16:25
I am pleased to see that Northern Rock are awarding themselves a 10% salary present for just doing their job:yuk::yuk: What on earth goes through their rains? Do they really think that after WE THE TAXPAYERS have bailed them out. GRRR

Squeegee Longtail
21st Jan 2009, 18:08
Just wait until the whole UK banking sector (what is left of it) is nationalised. You shouldn't have to wait too long.
Interesting articles all through the financial press today, all saying the same thing - Sterling is finished. Some also go on to say the the City of London is done too (as a significant financial centre).
Well done Gordo, you deserve a medal from the US, like Tony.

Flap 5
21st Jan 2009, 18:33
The sterling situation is now very serious. It is not just the value it is at the moment, it is the rapidity of it's decline - and it is still going down. One 'expert' said that you should 'get out of sterling' (a bit difficult if you live here). His reasoning was that Britain had just North Sea oil and banking. We are now becoming a net importer of oil and banking is shot. We have nothing else to sell to the world. With nothing to sell the currency will fall.

Most of the stuff we export use imported raw materials or prefabricated items from abroad. These have to be paid for with the weak pound.

So in the inimitable words of Private Frazer ... :eek:

No seriously we really are. :uhoh:

boardingpass
21st Jan 2009, 19:31
Sounds like the UK had best get some new colonies where the resources are plentiful and the labour cheap...

Doug the Head
21st Jan 2009, 19:56
"UK finished" according to Jim Rogers. (http://www.bloomberg.com/apps/news?pid=20601087&sid=agxlt5ZPtyLA&refer=home) :\

Der absolute Hammer
22nd Jan 2009, 03:00
Well, if it any consolation, David Wighton,( Business Editor), writes this in todays Times newspaper.
It seems stupid to me..but what are you meant to say? That is okay then?

The City will go through a terrible time, but the prospects for the German car industry look just as bad.

Flap 5
22nd Jan 2009, 09:58
The City will go through a terrible time, but the prospects for the German car industry look just as bad.


At least the germans still have a car industry. Up until a year ago all we had was the 'City', that has now collapsed. What car industry we have in Britain is all foreign owned.

Those who still refuse to believe the amount of trouble we are in say these 'experts' have their own agendas and are betting against the pound.

The evidence is stacking up against us and Gordon is running around like a headless chicken and can only accuse the Conservatives of 'doing nothing'. What are they supposed to do? Labour are in government.

The real danger is that we will not have the opportunity to kick them out for another 18 months. In the meantime the situation is getting worse by the day. :*

yakker
22nd Jan 2009, 11:28
I agree Gordon Brown has absolutely no idea what to do. As for the opposition being a 'do nothing party' that might be better than Gordons 'do something,anything party'. He seems willing to try anything even if its making things worse. The Banks obviously have not learnt, what with Northern Rock paying bonuses, and Gordon accepting that as okay.

Right now I think the oppostion should stand up and tell it like it is. We cannot afford all the social payments, civil service pensions,etc. The country has to cut its spending, reduce civil service jobs, and get back to producing something the rest of the world wants to buy. Get our balance of payments in the black, pay off the huge debts Gordon (and Tony) have left us with.

If we dont do this now, our children will be burdened with the debt. If this passes to our grandchildren, they will have a very low standard of living paying for our excess.

It will not be potically correct or what people want to hear, but it MUST be done.

WorkingHard
22nd Jan 2009, 15:23
Just released - In December 2008 alone Flash Gordon spent £14million PER HOUR more than we earned. Yes really every hour of every day we plunged deeper into the red by £14million. Where will it end?

SpringHeeledJack
22nd Jan 2009, 15:37
Just released - In December 2008 alone Flash Gordon spent £14million PER HOUR more than we earned. Yes really every hour of every day we plunged deeper into the red by £14million. Where will it end?

With a huge load for the generations to come OR a people's revolution and change. However, I wouldn't want to take bets on which one it will be.

I wonder if the CHF will make a comeback as a stable currency of choice ?


regards


SHJ

airfoilmod
22nd Jan 2009, 15:39
When citizens stop missing the point. Stop cranking up the gummint, like Brown could "fix things" if he wasn't a headless chicken. Reliance on government and self reliance are mutually exclusive. You CANNOT have it both ways.

The best government can do on any given day is convince you you don't need self reliance, and that with a willing Press.

AF

Rainboe
22nd Jan 2009, 15:43
How can we get this idiotic 'genius' out of office. How can us plebs force him to call a general election? This genius who decided to sell most of our gold reserves, and announced it weeks in advance so that the price plummeted and our gold reserves 'evaporated' at $160/oz. Good move Gordie! We're paying for it now! The man is an incompetent theorist who believes in government redistribution of wealth. He is in ecstasy deciding what taxes to raise - his favourite occupation, and redistribute as he sees fit. As a result, nobody has any money now! Well done Dude! We're going to be going hungry soon unless we dismiss him pronto.

airfoilmod
22nd Jan 2009, 16:14
Gordy, Barakky, Georgie; are results.

The reason? Elections. And a belief that the system could work, if only.....


Pitchforks I say.

AF

frostbite
22nd Jan 2009, 16:46
The Pound has also fallen sharply against the Matabele bead.

Sallyann1234
22nd Jan 2009, 16:49
Don't worry guys. Rainboe has promised us a pendulum swing. We just have to keep an eye on the graph:
Exchange Rates Graph (British Pound, Euro) (http://www.x-rates.com/d/EUR/GBP/graph120.html)

airfoilmod
22nd Jan 2009, 17:02
Buy USD. But not with Sterling.

rog747
22nd Jan 2009, 17:12
well its taking hols in the UK this summer (if we have a summer) for me:rolleyes:

camping in Dorset methinks...:)

ginger beer anyone?;)

Squeegee Longtail
22nd Jan 2009, 17:34
... I'll stick with Babycham thanks.

rog747
22nd Jan 2009, 17:38
oh lord do they still make that stuff??

and who did make it >?

i can remember family parties in the 1960's when i was little and all the aunts drank it PMSL:O:O:O

Flap 5
22nd Jan 2009, 19:26
oh lord do they still make that stuff??



What we still make something we could export? Maybe we could sell it to the rest of the world, get them all drunk and then nick all their dollars and euros.

What on Babycham? Buggah. :uhoh:

frostbite
22nd Jan 2009, 19:49
"and who did make it >?"

Wasn't it an outfit called Showerings?

BenThere
5th Mar 2009, 13:54
At the beginning of this thread, some Brits were lamenting that they missed their chance to get on board with the Euro. Track Coastal was going to be king of the world by now by means of his astute shorting of the US dollar.

So where are we now that a few months of economic turmoil have made us wiser? Is the Euro still the place to be? Might there be some wisdom in staying outside the Euro so as not to be so affected by the economic challenges of Spain, Greece, Hungary and such?

Tangentially, how did things work out with Iran's petro-Euro trading bourse?

Sallyann1234
5th Mar 2009, 18:28
So where are we now that a few months of economic turmoil have made us wiser?

wiser?

No-one has been made wiser by the past few months. If anyone was wiser they would know how to get out of this mess, but governments and national banks are just thrashing about, slinging any policy into the pot to see what colour the stew will turn next.

BenThere
5th Mar 2009, 18:46
Perhaps I should have used "less stupid" in lieu of "wiser".:sad:

Sallyann1234
5th Mar 2009, 19:02
That's a bit more like it :E

So where are we now

We are sliding out of control down an uncharted slope. We have burned out the brakes and still keep running.
We don't know how long the slope is or what awaits us at the bottom.
Be very afraid.

Rainboe
4th Aug 2009, 11:33
Well it's always funny to mark down a thread for resurrection at a later date! Here we are just5 months later! How different the picture suddenly looks. Sallyann1234's posting above and a quote from earlier in the thread writing off the UK economyIn 2008 we have none of these. Other countries have some or all of them and therefore a means to recover from the economic crisis.
I ask once again. WHY will there be a "a bounce in Sterling". What reason?
Behold, the Sterling 'bounce' (http://news.bbc.co.uk/1/hi/business/8183144.stm) (as promised by Rainboe) is underway! Those of you who frantically ditched all UK securities might think about buying them up again- we are not sinking into the North Atlantic as promised by several of you! Simply Sterling overdid the fall. Which way will the Euro go now? Not so hard to see now.

So, what is it about? It's not about the strength of the UK economy- more about a European economy with deep structural problems. Spain has almost 20% unemployment, German car sales are right down- but those same cars will soon be able to be bult in China for a small fraction of the current cost- so where does that leave the highly experienced (and brilliant), but expensive, German engineer in the coming decades? The UK stock market is recovering pretty well at the moment. I don't know where the strength of the UK economy lies, but right now it is looking better than what I see abroad. We are approaching a 'Margaret Thatcher' era- a decent replacement government slashing expenditure will be rewarded with massive growth. Sterling will glow again.

So time to eat your hats folks!

Low Flier
4th Aug 2009, 11:48
http://www.telegraph.co.uk/telegraph/multimedia/archive/01455/0408-MATT-web_1455738a.gif

Cpt_Pugwash
4th Aug 2009, 12:00
Frostbite, re. #185

Correct, Babycham was produced by Showerings, at Shepton Mallet in Zummerset.
Still is, although now under Gaymers ownership. Bambi is still outside the factory.

And now back to the financial programme .....

Der absolute Hammer
4th Aug 2009, 12:02
Well, that just does to show that the golden team of Darling Brown has worked a magic solution.
They have raised taxes, alienated foreign investment, irritated their allies and quitly, on the sly-like a butcher-suppressed UK civil rights.
They are a clever team and deserve to win another term at the next election. Between them it looks as though the British economy is saved and it would be very funny if the British bailed out the Germans at the end of the day when they buy the German cars.. The Spanish recovery, when it comes, will be there because British people are spending money there on holidays. The French economy will be saved because all the British home owners will be able to get back there. The Italians-well-non one really cares about them-they are pretty totally insignificant.
So I think that next year UK election will be in the bag for labour, especially if the labour left wing keep up their good work of finding rich targets for extra taxation=like banks and wealth generating people. I do not know what happens with British air travel with raised green taxes for extra miles to the Caribbean but anyway, the British government does not want its citizens travelling. This is why it makes passports and departure taxes the most expensive in Europe. Keep the £s in England. That is really a form of exchange control I guess?

frostbite
4th Aug 2009, 14:44
Thank you for that Captain!

I hope your seven months research has had many side benefits.

LH2
4th Aug 2009, 14:51
deserve to win another term at the next election

You mean deserve to win a term at the next election? Be nice if at least you had an elected Prime Minister :)

G-CPTN
4th Aug 2009, 15:29
The story behind Babycham:-
Having produced a sparkling cider-like drink from pears, it was initially marketed in large bottles - and was a complete flop.
The board of directors met to discuss ditching the product, but one member suggested packaging it in small bottles aimed at females. The resulting success amazed even the guy who suggested the idea . . .

Sallyann1234
4th Aug 2009, 15:55
Behold, the Sterling 'bounce' (as promised by Rainboe) is underway! Those of you who frantically ditched all UK securities might think about buying them up again- we are not sinking into the North Atlantic as promised by several of you! Simply Sterling overdid the fall. Which way will the Euro go now? Not so hard to see now.
I know you are desperate to find some justification Rainboe, but you will need something better than a short-term fluctuation of the graph. Come back after a year and see if the ripple has turned into a trend.

We are approaching a 'Margaret Thatcher' era- a decent replacement government slashing expenditure will be rewarded with massive growth. So time to eat your hats folks! Sterling will glow again.
We have a local pub that does stand-up comedy acts. You should come and have a go.

Lon More
4th Aug 2009, 17:05
Sterling will glow again.

Yeah, right. Probably when it falls below the price of kindling we can use it to light our fires.

BenThere
4th Aug 2009, 19:52
In the eighties £1 dropped to $1

It did? I remember $4.80 was the fixed rate in my early days. Then all of a sudden it was $2.40, which held for some time. When the Pound floated, I remember a low of around $1.25, pre-Thatcher, but I don't ever remember parity, and that would have been quite a holiday among some here in the States.

Are you sure?

I think the Pound is a bit over-valued right now, and should be trading at $1.40-1.50. Let's see where it is in a year, shall we?

BenThere
4th Aug 2009, 20:55
Love England as I do, I would enjoy an evening at the pub (there are a few left, aren't there), smoking a fine cigar (oops, can't do that), and chatting with the WWII vet behind the bar (damn, they're gone, too).

Oh, well. It's too expensive anyway. I'll just go to Mexico or the Caribbean, where the US $ still goes a long way. The beaches are white sand, margueritas are cheap and good, and there are no annoying ne're-do-wells carping about Bush.

I've become one of the disappearing Americans, I'm afraid.

Rainboe
5th Aug 2009, 11:58
Just don't catch flu or get shot in crossfire between drug gangs! The point is the UK has so many expats and surprisingly little financial 'nous'. There doesn't seem to be a good understanding that economies go up and down. Whenever the Pound falls, we get this cacophony of gleeful voices using it as justification for their estrangement with the UK and crowing about how the UK is on a one way ticket to Brokesville. We have here a minor recovery in the UK despite Brown's attempts to screw up the UK economy. How different it would be with a new government! People don't seem sophisticated enough to understand that a fall precedes a recovery. The long term history of the exchange rate is unimportant, the buying power counts. Sterling has fallen longterm against the Dollar. I don't see we are 1/4 as rich as Americans- if anything living standards are the same. Whilst you can imagine all is sweet and light in Europe, I get the impression Europeans are no richer in lifestyle than Brits. Whilst the UK economy has significant problems, so does the rest of the world. Look at the 'refugees' in France- they can stay there, but no, they have to come to the Promised Land!

JW411
5th Aug 2009, 15:21
I can remember picking up my monthly pay in Dubai, paid in cash in US$s, and changing it to Sterling in the money market at a rate of 1.08. That was late 1984/early 1985.

Oh happy days (but only if you were getting paid in US$s).