Foreigners control Britain's currency after Brexit

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    (Original post by Maker)
    At least I am not related to Farage.
    Most of the people who voted for Brexit do not vote UKIP.
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    (Original post by Maker)
    Not if export markets are closed.
    Read the article.
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    (Original post by ckfeister)
    Read the article.
    You certainly have not if you think it supports your view.
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    (Original post by Maker)
    You certainly have not if you think it supports your view.
    Lower currency = more export.
    More exports = manufacturing will increase, services will decline,
    Bring in less as prices be too high = higher demand = higher prices from farmers = farmers are wealthier.

    On BBC News today, it said our exports to increase 6.4% in 2017 and 5.8% in 2018, thats a dramatic increase and said we'll be more dependent on exports in the future than now, which could make us a manufacturing hub again, having a surplus in trading instead of a defict.

    Also, if it doesn't back my view, then say how it doesn't.
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    (Original post by ckfeister)
    Lower currency = more export.
    More exports = manufacturing will increase, services will decline,
    Bring in less as prices be too high = higher demand = higher prices from farmers = farmers are wealthier.

    On BBC News today, it said our exports to increase 6.4% in 2017 and 5.8% in 2018, thats a dramatic increase and said we'll be more dependent on exports in the future than now, which could make us a manufacturing hub again, having a surplus in trading instead of a defict.

    Also, if it doesn't back my view, then say how it doesn't.
    Lower currency = higher inflation and pressure to increase wages = more expensive goods = fewer exports
    Bring in less as prices are high = lower standard of living and increased costs for government and NHS

    The BBC is no better at predicting export levels or anything else. If the BBC were to be believed by people who matter, then the pound would not go down since the British economy will be healthy which no one who matters believes.

    If you believe that yourself, why don't you get over to the big banks and investors and tell them that instead of wasting your time with nobodies on this forum.
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    (Original post by Maker)
    Lower currency = higher inflation and pressure to increase wages = more expensive goods = fewer exports
    Bring in less as prices are high = lower standard of living and increased costs for government and NHS

    The BBC is no better at predicting export levels or anything else. If the BBC were to be believed by people who matter, then the pound would not go down since the British economy will be healthy which no one who matters believes.

    If you believe that yourself, why don't you get over to the big banks and investors and tell them that instead of wasting your time with nobodies on this forum.
    Higher inflation in short run, ofcourse that doesn't go on for 10 years now does it, look at financial crisis. It was forcasted by deputy governor of the Bank of England.

    With rising inflation coming, lower currency I'm sure once 2-5 years of short-term downfall our wages will increase to compete with USA again when currency has stablized.
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    (Original post by ckfeister)
    Higher inflation in short run, ofcourse that doesn't go on for 10 years now does it, look at financial crisis. It was forcasted by deputy governor of the Bank of England.

    With rising inflation coming, lower currency I'm sure once 2-5 years of short-term downfall our wages will increase to compete with USA again when currency has stablized.
    A lower currency is not a panacea for export or economic growth. Countries that see Britain keeping its currency artificially low could use WTO rules to enact anti dumping rules and stop British exports. Ireland has already mooted this since their farmers are under pressure from the low pound and cheap food from Britain is affecting their crucial farming sector.

    https://www.theguardian.com/world/20...looming-crisis

    Britain can't afford to alienate Ireland at the moment.

    A low currency and inflation would put off foreign investors at a time when they are really needed if British companies want to increase manufacturing and have to invest in plant and people.
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    (Original post by Maker)
    A lower currency is not a panacea for export or economic growth. Countries that see Britain keeping its currency artificially low could use WTO rules to enact anti dumping rules and stop British exports. Ireland has already mooted this since their farmers are under pressure from the low pound and cheap food from Britain is affecting their crucial farming sector.

    https://www.theguardian.com/world/20...looming-crisis

    Britain can't afford to alienate Ireland at the moment.

    A low currency and inflation would put off foreign investors at a time when they are really needed if British companies want to increase manufacturing and have to invest in plant and people.
    Its cheaper now than before to invest in UK, Chinese are more interested in us now than before primarly because its 20% cheaper, its like having a big sign on " 20% OFF EVERYTHING "

    Everything right now WILL be unstable as the UK moves from in EU to out, as a world power we CURRENTLY are, switching an entire world power (U-turn) of everything it stands for in EU etc is about to be abolished in 3 years. This is the most diffcult job after Thatcher era, don't expect it all be to sun and shine but will be better off in long run, even CBI forcasts said this, yet BBC and other news companies ignored.

    Average growth (see if you can tell the trend)

    Remained
    2016 - 2020: 2%
    2020 - 2030: 2%
    2030 - 2040: 2%

    Leave
    2016 - 2020: 0.8%
    2020 - 2030: 2.1%
    2030 - 2040: 2.8%

    This was before EU referendum forcasts.
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    (Original post by ckfeister)
    Its cheaper now than before to invest in UK, Chinese are more interested in us now than before primarly because its 20% cheaper, its like having a big sign on " 20% OFF EVERYTHING "

    Everything right now WILL be unstable as the UK moves from in EU to out, as a world power we CURRENTLY are, switching an entire world power (U-turn) of everything it stands for in EU etc is about to be abolished in 3 years. This is the most diffcult job after Thatcher era, don't expect it all be to sun and shine but will be better off in long run, even CBI forcasts said this, yet BBC and other news companies ignored.

    Average growth (see if you can tell the trend)

    Remained
    2016 - 2020: 2%
    2020 - 2030: 2%
    2030 - 2040: 2%

    Leave
    2016 - 2020: 0.8%
    2020 - 2030: 2.1%
    2030 - 2040: 2.8%

    This was before EU referendum forcasts.
    No foreign investor will invest in the UK when the pound is still under pressure, Its 20% off now but it could be 25% or 30% if they wait a few more weeks.

    You don't really believe anyone can forecast the state of the economy even one year ahead, let alone 4 or 14 years ahead?
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    (Original post by Maker)
    No foreign investor will invest in the UK when the pound is still under pressure, Its 20% off now but it could be 25% or 30% if they wait a few more weeks.

    You don't really believe anyone can forecast the state of the economy even one year ahead, let alone 4 or 14 years ahead?
    Yes, thats the point, I believe no one its just an estimate.
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    (Original post by Maker)
    I think Brexit has rather exposed Britain as the emperor without clothes. While the UK was in the EU, FDIs were happy to invest in the UK because it had easy access to the EU and lots of businesses like Nissan built large factories with the major aim of exporting cars to the rest of the EU without tariffs.

    The EU is no doubt having its problems and you are right to highlight the many problems in Italy, Greece and elsewhere. But the point is Britain is earning nearly half its exports to the EU. If you reduce that even by a small amount, lots of things are in jeopardy. Most businesses earn their profits from narrow margins, reduce those margins and the who business becomes unprofitable or less profitable.

    If you have large companies like Nissan who have no emotional ties to the UK and they are here purely because of profit, a small disruption in their business can cost them millions and can make them switch their investment to any number of alternatives in the EU. The UK has found it does not have a lot of control over the EU and investors that keep the pound afloat are looking elsewhere. While it is true these are early days in Brexit, the long term outlook does not seem to get better, in fact I think it will get worse if investors stop investing and companies find it harder to raise money for investment.

    There is little preventing Britain trading with the rest of the world before Brexit, I don't think Brexit makes that any easier. You can make the same case of say China having problems with a growing poor and elderly population, dependency on exports and inefficient state owned factories as Greece and Italy's problems but I don't think a car maker is that bothered as long as the Chinese buy their cars.
    And yet people seem more than happy to invest in British companies, given that the FTSE indices are all enjoying significant gains over the past week or so. You're conflating currency rates with total investment, which is simply untrue. If anything, the strength of the pound is indicative primarily of what is happening in the UK property market.

    I would suggest that the issues currently facing the eurozone are being rather understated at the moment. Italy seems to have barely warranted a mention in mainstream media, and yet it is on the verge of completely sinking the euro. I would also suggest that British exports - being primarily services based - enjoy the luxury of enormous profit margins. And with the fall of the pound, our exports are more competitive than ever. It is the european exports to Britain, which are typically manufacturing based and having to battle with the newly expensive euros, which have a hard time balancing costs and profit.

    Again, you're conflating investment in businesses with investment in the pound. British businesses are blooming. The FTSE indices are all going up and all the measures of our actual economy have been more positive than predicted. British property is less attractive now that we've voted to leave the EU, and that is broadly what the falling pound is reflecting. It isn't reflecting any kind of intrinsic weakness in our economy.

    That is a blatant lie. EU policy dictates that no member state can negotiate a trade deal with any country outside the EU. Instead, the EU must negotiate on behalf of all member nations, and all member nations must ratify any trade deal reached in negotiations. The deals with Canada and the US have shown just how protracted a process this ends up being, and frankly how rubbish the EU bureaucrats are at negotiating such deals.

    I don't really understand the relevance of your analogy. If China's economy starts suffering, they won't be asking the car manufacturers for a bailout. The car manufacturer doesn't have to provide for tens of thousands of people leaving China for better economic prospects elsewhere, and the car manufacturer's success isn't intrinsically tied into the success of China's economy.
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    (Original post by Luke Kostanjsek)
    And yet people seem more than happy to invest in British companies, given that the FTSE indices are all enjoying significant gains over the past week or so. You're conflating currency rates with total investment, which is simply untrue. If anything, the strength of the pound is indicative primarily of what is happening in the UK property market.

    I would suggest that the issues currently facing the eurozone are being rather understated at the moment. Italy seems to have barely warranted a mention in mainstream media, and yet it is on the verge of completely sinking the euro. I would also suggest that British exports - being primarily services based - enjoy the luxury of enormous profit margins. And with the fall of the pound, our exports are more competitive than ever. It is the european exports to Britain, which are typically manufacturing based and having to battle with the newly expensive euros, which have a hard time balancing costs and profit.

    Again, you're conflating investment in businesses with investment in the pound. British businesses are blooming. The FTSE indices are all going up and all the measures of our actual economy have been more positive than predicted. British property is less attractive now that we've voted to leave the EU, and that is broadly what the falling pound is reflecting. It isn't reflecting any kind of intrinsic weakness in our economy.

    That is a blatant lie. EU policy dictates that no member state can negotiate a trade deal with any country outside the EU. Instead, the EU must negotiate on behalf of all member nations, and all member nations must ratify any trade deal reached in negotiations. The deals with Canada and the US have shown just how protracted a process this ends up being, and frankly how rubbish the EU bureaucrats are at negotiating such deals.

    I don't really understand the relevance of your analogy. If China's economy starts suffering, they won't be asking the car manufacturers for a bailout. The car manufacturer doesn't have to provide for tens of thousands of people leaving China for better economic prospects elsewhere, and the car manufacturer's success isn't intrinsically tied into the success of China's economy.
    You lost me here.
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    (Original post by ckfeister)
    Yes, thats the point, I believe no one its just an estimate.
    If you don't believe it, why try to present it as something to prop up your argument, what is the point? Why don't you try finding something you do believe instead?
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    (Original post by Maker)

    My only stake direct in all this is a couple of hundred US dollars I have in my paypal account which has increased quite a bit against the pound, enough for a new jumper.
    Ha ha ha!

    The last of the currency speculators. Bless.

    If you were serious about this you would open a spread betting account and short sterling.

    Some firms accept small balances.

    It is a lot of fun, and as you say sterling is very weak at the moment, and likely to get weaker.

    Spread betting is geared so you wouldn't be talking about a jumper with the profits but whole new wardrobe. Even a car.

    Go for it, I am serious.
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    (Original post by astutehirstute)
    Ha ha ha!

    The last of the currency speculators. Bless.

    If you were serious about this you would open a spread betting account and short sterling.

    Some firms accept small balances.

    It is a lot of fun, and as you say sterling is very weak at the moment, and likely to get weaker.

    Spread betting is geared so you wouldn't be talking about a jumper with the profits but whole new wardrobe. Even a car.

    Go for it, I am serious.
    Sounds tempting and if I had some spare cash, I would be interested but sadly, no play money at the moment. If I did, I probably invest it in gold coins like sovreigns or Britainnias which are VAT and capital gains tax free.

    I bet a lot of foreign employees at foreign firms based in Britain would prefer to be paid in a different currency to the pound since every time they go home, they lose 20%!
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    (Original post by Maker)
    If you don't believe it, why try to present it as something to prop up your argument, what is the point? Why don't you try finding something you do believe instead?
    I'm doing it remain-style.
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    (Original post by ckfeister)
    I'm doing it remain-style.
    I prefer gangnum style.
 
 
 
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