Cyprus-Forum.com

[repulsewarrior]

...in French, but the list of notables' choices is interesting.

https://www.contexte.com/article/pouvoi ... 48616.html

[Pyrpolizer]

Great post I liked it.

Now about the future of the EU everybody seems to ignore the new rising giants, Poland and Romania.There's a good chance they will dominate after 20 years as most factories and heavy industries move there (mainly to Poland).

Perhaps Paphitis who admires UK's financial system could explain us what of essence that system is actually delivering. Thin air maybe? I must admit the same system worked fine in Cyprus for about 2 decades. We all became rich, and thought we were clever...

The UK would be lost without its Central Bank BoE.

Central Banks around the globe have a number of purposes and it is all for the relative good of the people and the Banks. You having seen what happened in Cyprus should be more aware than most as to what a Central Bank can do.

Naturally, they are at the mercy of International Markets, but the have a number of controls at their disposal.

The primary function of a Central Bank is to control the countries money supply by setting interest rates. Reducing interests rates means more money supply and increasing interest rates means less money supply.

If you are in recession, Central Banks generally lower interest rates to encourage borrowing and increase the money supply in order to stimulate the economy. If the economy is heating up, they increase interest rates to slow the economy down otherwise there will be a crash.

If Banking Liquidity is reduced and Banks are stressed, they increase interest rates and so on.

They also control to some extent inflation. They usually have their inflationary target zone and lower or increase interest rates to achieve this target.

Central Banks also act as a Lender to Government and also a Lender to Banks as a last resort. Bank of Cyprus and Laiki did not have this at their disposal. The ECB would not lend the money to the Cypriot Banks because it would have devalued the Euro and cost Germany Billions worth of trade value. So you got it in the neck.

In simple terms, Central Bank keeps in check the boom/bust cycle. They also monitor the Banks for their liquidity making sure they are meeting minimum legislated levels and also monitor their stress and Balance Sheets.

They can also set the value of the currency which is very important. They can devalue it or provide conditions for it to appreciate. This has benefits to countries like the UK which have significant trade. Very important for big trade Nations like Germany, USA, Canada, Japan, China, Australia and so on.

You are crazy to think Central Banks have no purpose. Without a Central Bank, the Banks have a free for all. It would mean that Commercial Banks are in charge of the economy and interest rates. Whilst I don't believe the Banks would deliberately do anything wrong, because they would in effect be cutting their own lunch if the screw the economy up, there is basically increased chances that things would go wrong plus there would be dangers of conflict of interest placing commercial entities in charge of interest rates for instance. They would milk the system to get maximum benefit without going too far to screw the market up hence destroying their profits. It could be dangerous. The Central Bank is impartial.

You guys think Central Banks serve no purpose. Well you need to explain what you would have in its place whilst maintaining free market principles. If you don't have this free market, money will flee. The rich will abandon ship and take their money out to places like Panama, and you would be left in soup lines to get your 1200 calories for the day!

Without a central Bank, you end up like Greece or Cyprus potentially. Greece and Cyprus never had an issue when they had their own Central Bank and currency.

What we are seeing today is the bust party of the natural economic cycle. It isn't the first time and it won't nbe the last. But what follows the big bust is a big boom.

In order to soften the blows, you need a Central Bank. You are very exposed not having your own Central Bank. Very exposed!

All that is fine, however it doesn't answer my question of how the UK can survive by just been a FINANCIAL center at a time that most of her industries are gone. Financial centers rely almost exclusively on money laundering or tax evasion and that's what we were doing in Cyprus, providing tax evasion to the Russians...

The UK already has it's own Central Bank and own currency, and doesn't do any miracles I don't see how that would change by leaving the EU.

[Robin Hood]

Pyrpolizer
I would be happy to explain in some detail from what I understand about how the system works but, I am afraid I might give Paphitis an aneurism!

He only wishes you to have his rather amusing explanation to go on. Which, as you say is not an explanation, just a lot of rhetoric without substance, but it looks good on paper. Mind you, I will give him his due he did get a couple of points right but obviously would not know why, because he is parroting what I have posted in the past.

Let me think about it ...... because I am getting a bit annoyed at Paphitis' continuous personal slagging off at every opportunity. My stance has always been ...... don't open your mouth to advise others unless you know what you are talking about and if you are merely expressing an opinion, say so!

[Robin Hood]

...in French, but the list of notables' choices is interesting.

https://www.contexte.com/article/pouvoi ... 48616.html

Knowledge of French was never my strong point but with what little I have remembered from my school days, I think I got the gist. It's about the Brexit ?

[Pyrpolizer]

Pyrpolizer
I would be happy to explain in some detail from what I understand about how the system works but, I am afraid I might give Paphitis an aneurism!

He only wishes you to have his rather amusing explanation to go on. Which, as you say is not an explanation, just a lot of rhetoric without substance, but it looks good on paper. Mind you, I will give him his due he did get a couple of points right but obviously would not know why, because he is parroting what I have posted in the past.

Let me think about it ...... because I am getting a bit annoyed at Paphitis' continuous personal slagging off at every opportunity. My stance has always been ...... don't open your mouth to advise others unless you know what you are talking about and if you are merely expressing an opinion, say so!

No need to go into details RH, it's a fact that the UK relies heavily on
been a financial center.The question was meant to challenge Paphitis who
thinks that such systems are great and can last for ever, ignoring the
fact that such systems actually target easy profit from foreign (usually
illegal) activities and instead of helping local industries and bussines
they turn them down to non profitable.

[repulsewarrior]

...in French, but the list of notables' choices is interesting.

https://www.contexte.com/article/pouvoi ... 48616.html

Knowledge of French was never my strong point but with what little I have remembered from my school days, I think I got the gist. It's about the Brexit ?

...yes, who is for it, who is against; an interesting list i think.

[Paphitis]

Great post I liked it.

Now about the future of the EU everybody seems to ignore the new rising giants, Poland and Romania.There's a good chance they will dominate after 20 years as most factories and heavy industries move there (mainly to Poland).

Perhaps Paphitis who admires UK's financial system could explain us what of essence that system is actually delivering. Thin air maybe? I must admit the same system worked fine in Cyprus for about 2 decades. We all became rich, and thought we were clever...

The UK would be lost without its Central Bank BoE.

Central Banks around the globe have a number of purposes and it is all for the relative good of the people and the Banks. You having seen what happened in Cyprus should be more aware than most as to what a Central Bank can do.

Naturally, they are at the mercy of International Markets, but the have a number of controls at their disposal.

The primary function of a Central Bank is to control the countries money supply by setting interest rates. Reducing interests rates means more money supply and increasing interest rates means less money supply.

If you are in recession, Central Banks generally lower interest rates to encourage borrowing and increase the money supply in order to stimulate the economy. If the economy is heating up, they increase interest rates to slow the economy down otherwise there will be a crash.

If Banking Liquidity is reduced and Banks are stressed, they increase interest rates and so on.

They also control to some extent inflation. They usually have their inflationary target zone and lower or increase interest rates to achieve this target.

Central Banks also act as a Lender to Government and also a Lender to Banks as a last resort. Bank of Cyprus and Laiki did not have this at their disposal. The ECB would not lend the money to the Cypriot Banks because it would have devalued the Euro and cost Germany Billions worth of trade value. So you got it in the neck.

In simple terms, Central Bank keeps in check the boom/bust cycle. They also monitor the Banks for their liquidity making sure they are meeting minimum legislated levels and also monitor their stress and Balance Sheets.

They can also set the value of the currency which is very important. They can devalue it or provide conditions for it to appreciate. This has benefits to countries like the UK which have significant trade. Very important for big trade Nations like Germany, USA, Canada, Japan, China, Australia and so on.

You are crazy to think Central Banks have no purpose. Without a Central Bank, the Banks have a free for all. It would mean that Commercial Banks are in charge of the economy and interest rates. Whilst I don't believe the Banks would deliberately do anything wrong, because they would in effect be cutting their own lunch if the screw the economy up, there is basically increased chances that things would go wrong plus there would be dangers of conflict of interest placing commercial entities in charge of interest rates for instance. They would milk the system to get maximum benefit without going too far to screw the market up hence destroying their profits. It could be dangerous. The Central Bank is impartial.

You guys think Central Banks serve no purpose. Well you need to explain what you would have in its place whilst maintaining free market principles. If you don't have this free market, money will flee. The rich will abandon ship and take their money out to places like Panama, and you would be left in soup lines to get your 1200 calories for the day!

Without a central Bank, you end up like Greece or Cyprus potentially. Greece and Cyprus never had an issue when they had their own Central Bank and currency.

What we are seeing today is the bust party of the natural economic cycle. It isn't the first time and it won't nbe the last. But what follows the big bust is a big boom.

In order to soften the blows, you need a Central Bank. You are very exposed not having your own Central Bank. Very exposed!

All that is fine, however it doesn't answer my question of how the UK can survive by just been a FINANCIAL center at a time that most of her industries are gone. Financial centers rely almost exclusively on money laundering or tax evasion and that's what we were doing in Cyprus, providing tax evasion to the Russians...

The UK already has it's own Central Bank and own currency, and doesn't do any miracles I don't see how that would change by leaving the EU.

I never said anything about Financial Services.

Countries like the UK and others in the EU are losing their manufacturing due to the high costs of manufacturing.

You got to deliver goods to the market at a good price at the end of the day, otherwise people will not buy your stuff and you will end up out of business. Hence manufacturing gets moved to Asian Countries like China.

However, advance economies like UK move into other areas of manufacturing. Things like technology, sustainable renewable energy, Defence Industries, legacy car manufacturing which still exists, Aviation Components (Rolls Royce), and so on.

Your exaggerating to suggest that Britain relies on Financial Services.

[Robin Hood]

Paphitis:

I never said anything about Financial Services.

So banking has nothing to do with ‘financial services’? Banking is the ‘holding company’ of financial services .......... they own most of them!

Countries like the UK and others in the EU are losing their manufacturing due to the high costs of manufacturing.

Partly true but the reason they are going downhill is because much of the manufacturing and procurement of plant/goods/equipment, is going to third world countries where the western company/corporation can make more money. The countries they exploit pay very low wages, have no concept of health and safety, no workers rights/protection, have no social security system or proper medical or education systems ........... but plenty of millionaires and billionaires. They also often have incredibly corrupt politicians and civil servants. In other words ......... exploitation of the population for profitable benefits of the few. The west has got used to the reverse over the last 50-60 years and that is now falling apart.

You got to deliver goods to the market at a good price at the end of the day, otherwise people will not buy your stuff and you will end up out of business. Hence manufacturing gets moved to Asian Countries like China.

Companies/Governments also need to create a level playing field ...... like the US has just done with their steel industry ...... import tarrif on Chinese steel of some 550%!

People in the west end up having to buy crap from these countries, (like China) whilst western corporations profits but more the share prices and markets generally, rocket. It's a false economy of paper and numbers ..... not wealth. In case you missed it ...... the wealth gap is widening. Although in Germany it is very different ........ Germans will buy German manufactured goods over cheaper foreign imports because as a nation they have a social conscience. The price to them is often a secondary consideration.

However, advance economies like UK move into other areas of manufacturing. Things like technology, sustainable renewable energy, Defence Industries, legacy car manufacturing which still exists, Aviation Components (Rolls Royce), and so on.

Such industries do not employ great numbers of people. Even then we then ship the technology to China and they copy it, I have seen it happen on a large scale in the UK with the Indians .... they soak up information, send it home and then tell the western company that was going to design and construct .... we don't need you now we will do it ourselves.

The UK has an ever expanding population and a social system struggling to provide the benefits people have worked to provide for generations. The biggest expansion in jobs have been in banking and the associated financial services but now that is also dropping with tens of thousands laid off in the UK alone as the system turns to technology to replace people. That is their Achilles heel! The question is ..... what do you do with all these unemployed/unemployable people.

Your exaggerating to suggest that Britain relies on Financial Services.

That is not what was said! The UK economy is primarily driven by non-wealth creating banking and financial services and that is a simple non contentious fact............. that all started in earnest during Thatcher’s reign as UK PM. Regulations that controlled the financial system were removed/relaxed whilst greater restrictions were put on employers liabilities and Unions. The result ...... manufacturing went bankrupt or was shifted away from the UK, and the banking sector expanded exponentially in an almost uncontrolled fashion. The company I worked for, in the UK for around 12 years has now gone completely, a levelled site ...... it was dismantled and all shipped to China. The same happened to all but three of the company’s twelve manufacturing units in Europe. So it is not just the UK ...... it is happening in the western world.

Pyrpolizer is right when he says it is an ‘industry’ that is corrupt, manipulative, exploitative and often works outside both national and international law and the UK along with the US is the king-pin!

IMO: That is why Obama was sent to lecture Cameron ...... those that are pulling the strings can see the system heading for the abyss, they are desperate to hold it together for as long as possible ...... but unlike you they are well aware that it will collapse eventually, they are just making sure they have their fire-walls set up before it happens.

[Paphitis]

Pyrpolizer
I would be happy to explain in some detail from what I understand about how the system works but, I am afraid I might give Paphitis an aneurism!

He only wishes you to have his rather amusing explanation to go on. Which, as you say is not an explanation, just a lot of rhetoric without substance, but it looks good on paper. Mind you, I will give him his due he did get a couple of points right but obviously would not know why, because he is parroting what I have posted in the past.

Let me think about it ...... because I am getting a bit annoyed at Paphitis' continuous personal slagging off at every opportunity. My stance has always been ...... don't open your mouth to advise others unless you know what you are talking about and if you are merely expressing an opinion, say so!

No need to go into details RH, it's a fact that the UK relies heavily on
been a financial center.The question was meant to challenge Paphitis who
thinks that such systems are great and can last for ever, ignoring the
fact that such systems actually target easy profit from foreign (usually
illegal) activities and instead of helping local industries and bussines
they turn them down to non profitable.

I hope I answered your questions.

Basically advance economies are moving away from small scale manufacturing because they can't manufacture things like white goods and textiles to a price.

But other industries spring up - technology based industries, IT, Medical Science, Renewable Energy, Defence Industries, Aviation Components, Transport Equipment etc etc.

[Robin Hood]

Paphitis:

I hope I answered your questions.

Basically advance economies are moving away from small scale manufacturing because they can't manufacture things like white goods and textiles to a price.

But other industries spring up - technology based industries, IT, Medical Science, Renewable Energy, Defence (do you mean Armaments?) Industries, Aviation Components, Transport Equipment etc. etc.

You have the economic acumen of a market stall holder selling bric-a-brac!

The one thing you do not and never have explained is why, or what you can do about it in economic terms. We all know you need to control your costs to compete but when those costs are paired down so low that there is no profit and you still cannot compete ..... what do you do then?

The one thing I will say for the banks ..... they DO find a way round their problems by applying various solutions and imagination ..... as Pyrpolizer says, many of the solutions are illegal but they just bend the rules to get around such inconveniences!

You are apparently the economic genius on the Forum with all the answers, so explain it, so that we can all benefit from your abundant knowledge.