Cyprus-Forum.com

[Londonrake]

Why should the future of the UK be decided by currency speculators?

Economically things haven't been as good for a long time (despite the apocalyptic predictions by remainers in the referendum campaign).

Unemployment is at a near half century low (half a million out of jobs in the event of a leave vote according to Osborne)

The country's surplus has been brought under control to the point where tax cuts and increased spending on public services is possible. Huge public borrowing, emergency budget, tax increases, pension cuts, house price crash, immediate deep recession according to Osborne.

UK growth currently exceeds that of the Eurozone.

Tell me more about the lies spun by leavers in the referendum campaign.

[erolz66]

OK ..... tell me why you think that and how you come to that conclusion! ...... with some facts on economics that says you are correct and I am wrong!

PS. I don't have any money ....... that is how I know what I know about the monetary system and its abuse by the Banks and other financial systems.

I do not know it. I am saying I believe in my 'best guess' enough such that I am willing to suffer personal loss if I am wrong (and gain if I am not). Compare that with say a claim like 'the chances of a no deal exit are a million to one'. Does the person who says that, believe it enough that they are willing to suffer personal loss if they are wrong ? Or are they saying it, knowing that it is not true, to create am impression that favours them and what they want others to believe ? To me anyone who really believed that the chances were a million to one would also be prepared to take bets at those odds. If they say it and are NOT prepared to do so, I conclude that they are being dishonest when they say it.

As to why I think that, I think it because I have LIVED the consequences of the currency movements caused by Brexit. Every week or so I take some of my Sterling income , change it in to Euros, and buy stuff. How much stuff I can buy for every £1 I start with changes with every movement of the Sterling / Euro rate. I know that I got 20% less stuff the day after the referendum vote than I did the day / week / month / year before it. I know that ever since I have been getting between 15-20% less stuff for each pound used since the referendum vote than before it. This is not 'speculation' this is absolute fact. Now leavers can and often do tell me that this would have happened anyway but that IS speculation and I do not believe them. They tell me this loss is not related to Brexit or predominately so but other things. I do not believe them. The loss started literally within minutes of the vote result, yet they would have me believe that it was not a result of that vote. I do not believe that. I also know that every time the prospect of a no deal exit has receded, how much stuff I get from each of my pounds spent this way has increased and every time the prospect of it happening has increased I have got less. This correlation has been 100% and consistent. Thus I think that the markets best guess as to what the impact of a no deal exit on the UK economy will be is negative leading to the pound weakening vs other currencies as a result. They might be wrong but I do think it is a genuine 'best averaged guess' of the millions of individuals who trade such things and motivated purely by 'money' and not politics. Thus I trust this 'indicator' or 'best guess' more than what people with clear vested interests tell me. So having lived this experience for three years now, I am confident enough to say I believe that should we leave on 31st without a deal I think the effect on Sterling / Euro rate will be to end up with a rate where one £ is worth less than one Euro, such that I would be willing to take personal loss if I am wrong and gain if I am right. Now you may be right that the rate at any given time is NOT indicative of the 'best guess' of the millions who trade such things as to what such values are and is just a result of manipulation to make money. That after a no deal exit the pound will strengthen. I just do not think you are because my personal direct experience indicates strongly to me otherwise. If we do exit on 31st without a deal and you are right and I am wrong then no one will be happier than me. I would welcome getting more stuff for each pound I spend here in Euros. More than I get now. More than I was getting before the ref vote. That would be great. I just do not believe that is what will happen in such a scenario because I see no evidence yet that would indicate that is what is going to happen in such a scenario.

[Robin Hood]

erolz66:

I do not know it. I am saying I believe in my 'best guess' enough such that I am willing to suffer personal loss if I am wrong (and gain if I am not). Compare that with say a claim like 'the chances of a no deal exit are a million to one'. Does the person who says that, believe it enough that they are willing to suffer personal loss if they are wrong ? Or are they saying it, knowing that it is not true, to create am impression that favours them and what they want others to believe ? To me anyone who really believed that the chances were a million to one would also be prepared to take bets at those odds. If they say it and are NOT prepared to do so, I conclude that they are being dishonest when they say it.

Many of these comments you refer to are made figuratively speaking, i.e. not to be taken literally? But if you have a definite opinion then you have to be prepared to explain and defend your opinion. That can only be done through lengthy explanations ..... or a link and let some expert prove the point for you. I can assure you that the former rarely works, but I have not given up after ten years, and usually gets the response TLDR!

As to why I think that, I think it because I have LIVED the consequences of the currency movements caused by Brexit. Every week or so I take some of my Sterling income , change it in to Euros, and buy stuff. How much stuff I can buy for every £1 I start with changes with every movement of the Sterling / Euro rate. I know that I got 20% less stuff the day after the referendum vote than I did the day / week / month / year before it. I know that ever since I have been getting between 15-20% less stuff for each pound used since the referendum vote than before it.

Don’t you think I and many others with a Sterling income are in the same boat?

This is not 'speculation' this is absolute fact.

The drop is fact .... your reason is hypothesis! Had all the terrible predictions come true immediately after the referendum .... then your hypothesis is likely true. But it didn’t happen because the basis of your theory was wrong. Rapid changes in currency valuations are caused only by one thing ..... currency speculation. Long term changes in currency valuations are generally caused by inflation and deflation of an economy over a much larger time scale.

Now leavers can and often do tell me that this would have happened anyway but that IS speculation and I do not believe them.

No, your thinking is wrong. It WILL happen over time as the purchasing power of a currency is subject to inflation. My salary when I first went to work was £6 a week. The minimum wage now is more per hour than I got in one week. The reason is inflation over some 60+ years!

They tell me this loss is not related to Brexit or predominately so but other things. I do not believe them. The loss started literally within minutes of the vote result, yet they would have me believe that it was not a result of that vote. I do not believe that.

Can’t you see ...... the drop was because of speculation related to something that had yet to happen! How can that drop be anything other than speculation if the event is in the future?

I also know that every time the prospect of a no deal exit has receded, how much stuff I get from each of my pounds spent this way has increased and every time the prospect of it happening has increased I have got less. This correlation has been 100% and consistent.

Which shows you that the currency change are through speculation. If tomatoes are 80c a kilo today ...... but a week later they are 1.20 but the exchange rate is more or less the same, then that is market driven. If all the change in £’s but the cost is the same in Euro’s then it has to be, in our cases, driven by changes in currency value.

Thus I think that the markets best guess as to what the impact of a no deal exit on the UK economy will be is negative leading to the pound weakening vs other currencies as a result. They might be wrong but I do think it is a genuine 'best averaged guess' of the millions of individuals who trade such things and motivated purely by 'money' and not politics.

That is just what it is ..... a guess, not a science! They are traders in currencies ...... if they didn’t speculate then the changes would be over time and dictated by inflation not speculation. The currency ‘markets’ are causing the fluctuations to make money, they couldn't give a shit about the economy!

Thus I trust this 'indicator' or 'best guess' more than what people with clear vested interests tell me. So having lived this experience for three years now, I am confident enough to say I believe that should we leave on 31st without a deal I think the effect on Sterling / Euro rate will be to end up with a rate where one £ is worth less than one Euro, such that I would be willing to take personal loss if I am wrong and gain if I am right.

It has affected all of us with sterling incomes so you are not alone. But I am one of those who when I have been shafted, like to find out why, by whom and how. It has taken many years to find out .... and not just by my own opinion or what I think happened. There are many economists that disagree with the present banking and financial systems. The common denominator is THE BANK’s and they way they operate. By far the vast majority of the population don’t have a clue how the system works.

Now you may be right that the rate at any given time is NOT indicative of the 'best guess' of the millions who trade such things as to what such values are and is just a result of manipulation to make money. That after a no deal exit the pound will strengthen. I just do not think you are because my personal direct experience indicates strongly to me otherwise. If we do exit on 31st without a deal and you are right and I am wrong then no one will be happier than me. I would welcome getting more stuff for each pound I spend here in Euros. More than I get now. More than I was getting before the ref vote. That would be great. I just do not believe that is what will happen in such a scenario because I see no evidence yet that would indicate that is what is going to happen in such a scenario.

OK, that’s fair enough but ......... how do I see it?

You will be aware of Quantitative Easing (QE)? Between 2015 and 2018 the ECB created Eu.2.6Trn out of thin air to help the European economy. The Bank of England did the same around the same time and created £375Bn. In both instances it had little or no effect on the economy so someone got it wrong! Why? Because it was given to the same banks to lend, the idea being it would boost the real economy through lending. All it did was to increase the book value of assets ...... property, share and bond prices, futures derivatives etc. it did absolutely NOTHING for the economy.

Now common sense says, so why don’t we do the same thing but instead of giving it to the banks to lend back to us at interest, don’t we spend it on wealth creating infrastructure projects, research and development grants, help for small and medium size enterprises? Why not employ more nurses. police officers, scientists and teachers; why not build some new schools and hospitals ..... the list goes on. Now that would create more jobs and generate wealth. (This is what Corbyn describes as Peoples QE.)

One problem with that however! All the time we are in the EU we cannot do this! QE can ONLY be used to prop up the banks! It is stipulated such in the Lisbon Treaty (can’t remember which articles) it cannot be used to bail out a States economy directly or government social programmes or to boost private companies. You therefore have no option but to borrow what is required from the commercial banks at interest.

What would happen on 1st Nov if the UK implemented a pre-planned and massive infrastructure investment program looking into the future by doing just this?

The speculators wouldn’t know what to do so the pound will drop as they buy say Euro’s to be safe. Then the billions are announced and the projects released for bidding but the poor old EU doesn’t get a look in because they have priced themselves out of the market! The pound starts to rise as more and more companies are created to meet the demand for goods and services. We start to advertise for qualified people from Europe to help us because we now also have the control over who we want in the country. More jobs = more tax revenue both direct and indirect and we can get anything we need from whoever we want to and we are not paying a cent to the banks. Give it some thought.


Now I will wait for all the illinformed to quote Weimar and Zimbabwe as evidence it doesn’t work!

But, it has been working for years in Japan and more recently in China, it is just that nobody told them! This is why Trump complains of unfair competition from China, because they can do what the US and Europe cannot do and that is, the State investing in its own wealth creating industries with their own national currencies. Inflation? ...... in both cases deflation seems to be more of a problem so the Weimar/Zimbabwe advocates will be shown to be wrong ........ just as they are about the monetary system in general!

[Londonrake]

RH.
I agree with much of what you say about currency speculation. However, somehow I just can't get my head around the idea that Corbyn and McDonnell getting their hands on the currency printing presses would be in any way beneficial. I think in that respect you are being (very!) myopic. Whilst not wishing to over-egg the pudding I suspect we would end up in Venezuelan territory.

Regardless, it seems that, although doing everything possible to not actually have a firm Brexit policy (sort of leaving to the northern tribes, sort of staying to the southern elites) Labour are edging towards being the party of remain. In which case many of their more fanciful Marxist plans will end up on the Tsipras scrap heap.

Please though - don't let me stop you giving us the benefit of your considerable expertise in the area of money creation. I do recall your saying that a mutual acquaintance, who spent over 40 years in banking and rose to a very senior level in the field,"probably doesn't know as much about money creation as me".

[miltiades]

Sterling has fallen for one and only one reason. Brexit. If any of you were conversant with speculative trading either on currencies or stocks then you would understand that speculators can drive a currency or down same eith stocks.
Let's not be silly now the pound is down because the markets see Brexit as bad for the UKs economy. So let's not argue the point, google it if you like but use your logic.

[cyprusgrump]

Sterling has fallen for one and only one reason. Brexit. If any of you were conversant with speculative trading either on currencies or stocks then you would understand that speculators can drive a currency or down same eith stocks.
Let's not be silly now the pound is down because the markets see Brexit as bad for the UKs economy. So let's not argue the point, google it if you like but use your logic.

Blah, blah, blah...

Repeating the same point over and over (and over) again does not make it fact...

In fact, it makes you look like a parrot...

Question: Do you understand Monetary Policy...? Or Fiscal Policy...? Or do you and certain other Remainers (as it appears) base the state of the UK economy (the 5th/6th largest in the world lets not forget) on how much Keo you can buy in Cyprus for a Pension Pound...?

[Londonrake]

Sterling has fallen for one and only one reason. Brexit. If any of you were conversant with speculative trading either on currencies or stocks then you would understand that speculators can drive a currency or down same eith stocks.
Let's not be silly now the pound is down because the markets see Brexit as bad for the UKs economy. So let's not argue the point, google it if you like but use your logic.

Sorry Milti but....................................NO!. The forex people see the volatility of Brexit as an opportunity to make money. There's absolutely nothing wrt the UK economy to support such pessimism. It's doing better than just about any other EU economy. It's all about making a buck.

Good time to sell the house and move back - I'm thinking. That'll cheer a few people up.

[miltiades]

Look , speculators do NOT just speculate on a downward movement, they do so on upward movement as well. With Sterling it's been a downward movement following the referendum result with a few fleeting upward movements. It's due to BREXIT. Accept it !! It's not rocket science.

[Londonrake]

Look , speculators do NOT just speculate on a downward movement, they do so on upward movement as well. With Sterling it's been a downward movement following the referendum result with a few fleeting upward movements. It's due to BREXIT. Accept it !! It's not rocket science.

Yes - of course it's due to Brexit. But please tell me what - from the point of view of the UK economy - actually justifies it?

[miltiades]

Mate please, the ...patient is still alive, we are still in the EU. What makes Sterling weak is the belief by the markets that on exiting the EU, the UK will suffer financially with inflation, lack of investment, multinationals either moving out or substantially reducing their investments in the UK. London will seize to be the financial centre that this far it has been. Common sense will tell you that if you were manufacturing , let's say ...viagra, surely you would prefer to operate withing the world's largest trading block and not in the UK with less dickheads !!!
Brexit IS bad for the UKs health. It is a fact. Keep a watch on the pound in your pocket.
My dosh is mostly in us dollars, mainly because I dont have much confidence on Cy banks. I'm in the process of selling some inherited land and will be paid in euros but I'm dammed if I'm going to leave in the banks here!!!