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The Pound takes a hammering ..... again!

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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 5:53 pm

Paphitis wrote:
Maximus wrote:
Paphitis wrote:In addition, people make the mistake in looking at currency values as some kind of measure for economic performance. It's NOT. Much better to look at unemployment figures or the FTSE.

If it was, then why isn't the Dutch, Australian and Swiss currencies the strongest in the world. They have the strongest economy in the OECD so shouldn't those currencies be strong?

The answer is NO. Particularly in Australia's case which is a commodity exporter.

The opposite is true. An expensive AUD generally has adverse affects on the economy. A lower AUD is seen to be advantageous to competitiveness. If Australia had Cyprus Pound values, then the economy would be in meltdown because it wouldn't be able to sell all its commodities.


Currency values are a measure of a country's performance relative to another country.

The FTSE is traded in GBP's. It is not traded in ASX's, DAX's or Nasdaq's. :lol:

So I hear its cheaper for an Aussie to invest in the UK economy. How about for a Brit?


Oh really! Then Cyprus should have had the strongest economy in the world when it had the pound.
Most more wealthy than any in the OECD.

But that's not the case is it? Didn't even come close! Let's not get carried away now.

What is a measure is the unemployment rate, consumer confidence, property prices and development. Currency is just a commodity like any other.

Some countries even deliberately devalue it or try to inhibit its value.



Well actually Paphitis when CY had the pound, I usually got less CYP's when I exchanged my GBP's when visiting for holiday. I dont think it is a good example because the CYP was fixed. Something like 1GBP = 80 CY cents.
Last edited by Maximus on Wed Oct 05, 2016 6:02 pm, edited 1 time in total.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 5:55 pm

Paphitis wrote:
Maximus wrote:
Paphitis wrote:
Maximus wrote:You twist and turn like a tagliatelle salad. As if you forgot what you said only a couple of posts ago. Some of what you are saying is just not accurate either.

I'm out of this conversation Paphitis,


I'm not twisting and turning. You are just too fixated with wishing Britain will just slide into the abyss. Why I have no idea. It's a bit childish to hold these grudges. Many countries have moved on from far worse things and Britain is not responsible for our situation. We need to take a lot of the responsibility too, not just blame others.

If you want to gain satisfaction from other people's despair then you need to look at unemployment rates, property prices, and consumer expenditure in order to satisfy yourself of the health or ills of the British economy. And those figures don't really portray a weak economy. Quite the opposite as a matter of fact.

The value of the Sterling is largely irrelevant let alone it's artificial value during BREXIT, which is unprecedented set of circumstances.


Where did you get all that from.

I do not wish the UK to slide in to the abyss and this has absolutely nothing to do with my opinion or the facts about the Cyprus problem.

In case you are not aware, because I have said this to you before. I am British. I am simply stating a fact that the GBP has weakened against all major currencies since 2008. Its a fact Paphitis.

All those economic indicators you mention get priced in relatively quickly after they are announced. Whatever the exchange rate is this is what the market thinks it is worth. whatever it is intrinsically worth is another matter but the GBP is not trading at its intrinsic value, which is also subject to change. It is trading at what the market percieves it to be worth. Dont argue with the market.

I still want to know where you would put your stop on that GBPUSD buy.....


It's not a fact. The Sterling was relatively stable against the Euro with the exception of now and that is due to the BREXIT.

It would have been impossible for instance for the Sterling to maintain the same ratio as the Australian Dollar during the resource boom and that was even with the Reserve Banks's unsuccessful attempts to devalue it as much as possible. That's what happens when resource prices are at record highs.


Its a fact, the GBP has been in a downtrend against most, if not all major currencies since 2008. The chart does not lie. There have been corrections along the way but never a recover to pre 2008 levels. Look at the chart.

So if the UK economy is doing so great.

why did governer Carney reduce interest rates?

Why is he talking about a wider stimular program as well (quantative easing)?

Dont bet against a central bank.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 6:02 pm

Maximus wrote:
Paphitis wrote:
Maximus wrote:
Paphitis wrote:
Maximus wrote:You twist and turn like a tagliatelle salad. As if you forgot what you said only a couple of posts ago. Some of what you are saying is just not accurate either.

I'm out of this conversation Paphitis,


I'm not twisting and turning. You are just too fixated with wishing Britain will just slide into the abyss. Why I have no idea. It's a bit childish to hold these grudges. Many countries have moved on from far worse things and Britain is not responsible for our situation. We need to take a lot of the responsibility too, not just blame others.

If you want to gain satisfaction from other people's despair then you need to look at unemployment rates, property prices, and consumer expenditure in order to satisfy yourself of the health or ills of the British economy. And those figures don't really portray a weak economy. Quite the opposite as a matter of fact.

The value of the Sterling is largely irrelevant let alone it's artificial value during BREXIT, which is unprecedented set of circumstances.


Where did you get all that from.

I do not wish the UK to slide in to the abyss and this has absolutely nothing to do with my opinion or the facts about the Cyprus problem.

In case you are not aware, because I have said this to you before. I am British. I am simply stating a fact that the GBP has weakened against all major currencies since 2008. Its a fact Paphitis.

All those economic indicators you mention get priced in relatively quickly after they are announced. Whatever the exchange rate is this is what the market thinks it is worth. whatever it is intrinsically worth is another matter but the GBP is not trading at its intrinsic value, which is also subject to change. It is trading at what the market percieves it to be worth. Dont argue with the market.

I still want to know where you would put your stop on that GBPUSD buy.....


It's not a fact. The Sterling was relatively stable against the Euro with the exception of now and that is due to the BREXIT.

It would have been impossible for instance for the Sterling to maintain the same ratio as the Australian Dollar during the resource boom and that was even with the Reserve Banks's unsuccessful attempts to devalue it as much as possible. That's what happens when resource prices are at record highs.


Its a fact, the GBP has been in a downtrend against most, if not all major currencies since 2008. The chart does not lie. There have been corrections along the way but never a recover to pre 2008 levels. Look at the chart.

So if the UK economy is doing so great.

why did governer Carney reduce interest rates?

Why is he talking about a wider stimular program as well (quantative easing)?

Dont bet against a central bank.


It doesn't look like a downward trend to me!

Not with 5.4% unemployment and declining from a peak of 8.2%.

That is the indicator that counts. That's pretty damn close to a skill and labor shortage.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 6:04 pm

unemployment alone is not a measure of economic performance. Employment can be at 100% but that does not mean you will have the best economy.

Too many people have jobs in the UK but cant afford to cover their costs to live.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 6:07 pm

Maximus wrote:unemployment alone is not a measure of economic performance. Employment can be at 100% but that does not mean you will have the best economy.


No it isn't the only economic indicator. There are many.

But unemployment figures are pretty damn central to gauging the health of the economy and Britain's figures paint a pretty good picture.

Other factors are of course consumer spending, FTSE, inflation and property prices and construction. Are British property prices falling? I doubt it!

A weak economy doesn't have unemployment figures of 5.4%.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 6:09 pm

Like I edited my comment above.

There are too many employed people in the UK that can barely cover their cost of living.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 6:10 pm

Maximus wrote:Like I edited my comment above.

There are too many employed people in the UK that can barely cover their cost of living.


That is completely unrelated to economy. Usually in a booming economy, costs blow out and so does inflation.

Property prices blow out and housing becomes unaffordable to younger generations. It's not an indication of a weak economy.

Yes things become less affordable if you're on a minimum wage. This is a global phenomena.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 6:12 pm

Paphitis,

Why did governer Carney reduce interest rates and is talking about a stimulas program if the UK economy is so great?
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 6:14 pm

Maximus wrote:Paphitis,

Why did governer Carney reduce interest rates and is talking about a stimulas program if the UK economy is so great?


Everyone is reducing interest rates. It's a natural cycle and it won't last forever!

In Australia they are 1.5%. Japan is negative!
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 6:20 pm

No Dude,

Central banks reduce interest rates to encourage loans to make investments, to encourage spending.

Stimulas programs are designed to stimulate the economy. Just like a doctor would try to revive a dead body back to life by stimulating it with electricity.
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