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

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

Postby Robin Hood » Tue Oct 04, 2016 4:10 pm

The pound takes a hammering from the currency speculators .... again! :roll:

But it could be stopped literally overnight and the threat and the solution has been known for 80 years. This drop in the value of the pound cannot be related to economics as ALL the bad economic news is coming out of Europe .... Germany, France, Italy, Spain, Portugal and of course Greece. The good news as far as the economy is concerned, is coming from the UK.

If the problem and the solution is known why is nothing done to prevent speculators cashing in on a system that contributes nothing to any country’s economy or wealth creation? The only ones that benefit are speculators! :x

The speculators are now using the pound to buy shares ....... and as a result the Stock Market in London has reached around 7115 ....... as the pound drops the FTSE 100 rises! What goes up .... must come down? :roll:

Tobin's concept – from Wikipedia:

James Tobin's purpose in developing his idea of a currency transaction tax was to find a way to manage exchange-rate volatility. In his view, "currency exchanges transmit disturbances originating in international financial markets. National economies and national governments are not capable of adjusting to massive movements of funds across the foreign exchanges, without real hardship and without significant sacrifice of the objectives of national economic policy with respect to employment, output, and inflation."

Tobin saw two solutions to this issue. The first was to move "toward a common currency, common monetary and fiscal policy, and economic integration." The second was to move "toward greater financial segmentation between nations or currency areas, permitting their central banks and governments greater autonomy in policies tailored to their specific economic institutions and objectives."

Tobin's preferred solution was the former one but he did not see this as politically viable so he advocated for the latter approach: "I therefore regretfully recommend the second, and my proposal is to throw some sand in the wheels of our excessively efficient international money markets."

Tobin's method of "throwing sand in the wheels" was to suggest a tax on all spot conversions of one currency into another, proportional to the size of the transaction. In the development of his idea, Tobin was influenced by the earlier work of John Maynard Keynes on general financial transaction taxes.

Keynes' concept stems from 1936 when he proposed that a transaction tax should be levied on dealings on Wall Street, where he argued that excessive speculation by uninformed financial traders increased volatility. For Keynes (who was himself a speculator) the key issue was the proportion of 'speculators' in the market, and his concern that, if left unchecked, these types of players would become too dominant.

https://en.wikipedia.org/wiki/Tobin_tax
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Tue Oct 04, 2016 5:25 pm

Great time to buy some British Stocks!

Buyer's market.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Tue Oct 04, 2016 5:39 pm

Why put a stop to it? It's wishful thinking believing you can or that people even want to.

All these things are a result of supply and demand, and also confidence.

It's the same principles on the Stock Markets. People usually end up making money from these movements. For instance, a drop in the Stirling will only encourage an enormous investment bonanza from outside the UK and then the Stirling ends up recovering. It also creates good gains on the markets.

Everyone who has a Pension Fund relies on these movements.

It's fantastic for International Stock Market Investors.

My Pension Fund has been on 100% risky investments as everything goes into the Dow Jones, NASDAQ, FTSE and ASX. I have seen off booms and a couple of disastrous crashes but I haven't lost a red cent let me tell you. In fact the gains have been too good over the last 2 decades.

Now, my purchasing power in the FTSE just increased making the FTSE great value. It's fantastic! 8)
Last edited by Paphitis on Tue Oct 04, 2016 5:51 pm, edited 1 time in total.
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Re: The Pound takes a hammering ..... again!

Postby Robin Hood » Tue Oct 04, 2016 5:47 pm

Paphitis wrote:Great time to buy some British Stocks!

Buyer's market.


Only you could get it arse about face! The general rule is ..... buy low and sell high! :roll: :lol: :lol: :lol:
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Tue Oct 04, 2016 5:52 pm

Robin Hood wrote:
Paphitis wrote:Great time to buy some British Stocks!

Buyer's market.


Only you could get it arse about face! The general rule is ..... buy low and sell high! :roll: :lol: :lol: :lol:


Yes correct.

And when you buy British Stocks from an overseas currency you have a greater purchasing power. Try to keep up.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Tue Oct 04, 2016 5:55 pm

The best thing about International Share Trading is that you not only get to rely on the value of the shares but you can time your entry and exit for when the exhange favours you.
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Re: The Pound takes a hammering ..... again!

Postby miltiades » Tue Oct 04, 2016 6:02 pm

The pound continues its downward journey as a result of the Brexit, now called hard ....Brexit.

Wait till it reaches on par with the Euro !!
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Tue Oct 04, 2016 6:06 pm

I hope it continues its downward trend.

It's a time to rejoice just like when the AUD spiraled down against the greenback by 25%. That was the time to cash out because you end up with 25% more AUD. Now it looks like the UK is on the move and I'm getting that it vibe! 8)
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Re: The Pound takes a hammering ..... again!

Postby Robin Hood » Tue Oct 04, 2016 6:45 pm

Paphitis:
Why put a stop to it? It's wishful thinking believing you can or that people even want to.

People’ don’t realize how the game is played ....... including you! Tobin’s Law would put a stop to it .... and the people would benefit from stable currencies .... only the speculators lose out.
All these things are a result of supply and demand, and also confidence.

What rubbish, they are down to speculation, high speed trading in both currencies and shares. It has nothing to do with economics, which is what supply, demand and confidence is in the real economy. You are getting the principals of wealth creation (The real economy) confused with making money (The financial economy) ..... they are not the same thing.
It's the same principles on the Stock Markets. People usually end up making money from these movements. For instance, a drop in the Stirling will only encourage an enormous investment bonanza from outside the UK

The stock market is as above! When shares go up, speculators make money, the company that the shares are in makes nothing. Share values are determined by computers trading thousands of times a second. The only ‘investor’ is the initial purchaser of the shares, after that the face value of the share certificate is determined in the main, by computers reacting to a ‘buy’ or a ‘sell’. This causes the face value of the share certificate to rise and fall.

The stock markets make money for speculators, whether that be an individual, a financial institution or a Pension Fund. But the company with its name on the shares only sees a theoretical increase or decrease in its market value. Start selling and the value drops .... big sell = big drop or, start buying and the value rises. It really is a very simple confidence trick!!!!
Everyone who has a Pension Fund relies on these movements.

That is what is so sad .... they rely on 'financial experts' to advise them! What goes up can/will also come down ..... if the markets ‘rally’ quickly there is usually a ‘correction’ a few weeks/months later when speculators cash in their profits. Many pension funds are in a position that they have insufficient funds to pay pensions .... so they borrow from banks (issue Bonds =IOU’s) to pay the pensions, which createsdebt and ncreases the Banks assets or rather debts.

Remember Lehman Bros? Now look at Deutsch Bank, same problem, too many assets (Debt) and its share value has plummeted as investors sell off their ‘investments’ ......... the depositors now take the risk as Merkel has refused to bail them out. In fact Deutsch Bank has about four times the debt that bought Lehman Bros down, and that does not include the €54 trillion (not a typo) liability on derivatives .
It's fantastic for International Stock Market Investors
.
Maybe, al the time the market is rising. Stock Market Investors are investing in IOU’s where the value is the face value at any given point in time determined almost exclusively by high speed computer trading. A share certificate has no intrinsic value!

I wonder if you will be so euphoric when the house of cards collapses?
My Oension Fund has been on 100% risky investments as everything goes into the Dow Jones, NASDAQ, FTSE and ASX. I have seen off booms and a couple of disastrous crashes but I haven't lost a red cent let me tell you. In fact the gains have been too good over the last 2 decades.


The higher the gains ........... the greater the risk! Ask those that had Laiki Bank Accounts. :roll:
Now, my purchasing power in the FTSE just increased making the FTSE great value. It's fantastic!


I suggest you put everything into the FTSE as you have so much confidence in the system. No doubt if/when it goes belly up, you will become a socialist overnight and look to the State to help you out. :roll:
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Re: The Pound takes a hammering ..... again!

Postby Robin Hood » Tue Oct 04, 2016 6:52 pm

miltiades wrote:The pound continues its downward journey as a result of the Brexit, now called hard ....Brexit.

Wait till it reaches on par with the Euro !!


BREXIT was the excuse initially but ..... so far the UK's economic prospects have in the main improved since the vote. All the fear campaign has proved to be just that ...... fear ......... and it is Europe in the economic doldrums, and yet the pound drops ..... I find that very strange and can only put it down to speculators.
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