Collapse of £

[andyBeaker]

Ok, as Brexit hasn’t happened yet how can it be blamed for a collapsing currency?
Now, you could blame the uncertainty of the potential Brexit for it’s collapse, or you could blame the lack of confidence in the clowns that run our country.

A minute ago you were saying it is because exchange rates have always changed....

Make your mind up,Derek.....

In all seriousness, what you are saying is sort of right...it is all confused without any focus.

Kind of sums up where the country is at the moment....

 

[derek kelly]

. A minute ago you were saying it is because exchange rates have always changed....

Make your mind up,Derek.......

That’s still what I’m saying, they change for different reasons, last year the Hurricanes in Florida did me a big favour as I got a better exchange rate, if we have a summer of too much or too little rain then it affects how crops grow & the farmers adjust their prices accordingly, an outbreak of foot & mouth will affect meat prices etc, only an expert who spends hour upon hour studying the economy can have any real idea as to what is causing the collapse, the rest of us can only assume

In all seriousness, what you are saying is sort of right...it is all confused without any focus.

Kind of sums up where the country is at the moment....

That is how the Politicians like us to be, like frightened rabbits & it is why I believe a no deal Brexit is the only way forward as any deals will not be on our terms, don’t get me wrong I am as nervous as anybody as regards to the future but I am absolutely terrified of the outcome of remaining.

 

[Jaws]

But it doesn't just happen, economic forces are behind it.

Driven primarily by speculators ( many of who are working for banks )
I stand by what I said earlier
The friggin banks speculating again...and the greed of the pigs at euro trough trying to forestall brexit causing uncertainty

Your keep reaping the question, yet you reply to others not giving an alternative reason ?

 

[andyBeaker]

Driven primarily by speculators ( many of who are working for banks )
I stand by what I said earlier
The friggin banks speculating again...and the greed of the pigs at euro trough trying to forestall brexit causing uncertainty

Your keep reaping the question, yet you reply to others not giving an alternative reason ?

Of course there are speculators out there - always have been, always will be.

However, it is a rare thing when speculators have anything other than a short term impact on exchange rates - the best example is when Soros attacked the £ a it worked for a very short time but the market is simply too big for a long term impact to be sustained. It is different in share markets where there is (at least theoretically) a limited market to manipulate.

Alternative reasons? The classic ecomic reasons, GDP, interest rates, employment, etc.etc.........but most of all, uncertainty and lack of confidence.

While it is a little off the wall, Freakonomics is a very readable book that gives an insight into such things.

 

[vbird]

just as a bit of an aside to all this, my works is in the back end of nowhere in Lincolnshire, the amount of investment on the small local industrial estate is eye watering, a printing firm has expanded massively buildings and offices which now double the size of before, also buying up land which I can only presume is to allow for further expansion. A local builders merchant has bought a 6 acre plot and starting next year creating a bespoke yard, next door to me is a T towel company they are after buying an acre in order to expand their capability. My point being, this is a very small industrial estate in the middle of nowhere and the investment being poured in doesn't correspond to the chaotic forecast we are all being fed, or am I missing something.

Oh, and drive around the country, the building works both housing and industrial (just how many more car dealers can we cope with) doesn't say to me that this country is going down the pan from April.

the £ against the aussie $ was $3 to the £1 in 2000, 3 years ago it was 1.36, now at the post office its 1.72 yes its going to fluctuate and over the long term find its level there or there abouts. a weak pound also has benefits for trade too, its hovered around 1.10 to the euro for quite a while now, I`m pretty confident when the dust settles it`ll find its true level once again. that's presuming we do leave. but as has been stated before with these clowns not doing what the electorate asked for is a disgrace and exasperates the mess this country is in.

 

[andyBeaker]

just as a bit of an aside to all this, my works is in the back end of nowhere in Lincolnshire, the amount of investment on the small local industrial estate is eye watering, a printing firm has expanded massively buildings and offices which now double the size of before, also buying up land which I can only presume is to allow for further expansion. A local builders merchant has bought a 6 acre plot and starting next year creating a bespoke yard, next door to me is a T towel company they are after buying an acre in order to expand their capability. My point being, this is a very small industrial estate in the middle of nowhere and the investment being poured in doesn't correspond to the chaotic forecast we are all being fed, or am I missing something.

Oh, and drive around the country, the building works both housing and industrial (just how many more car dealers can we cope with) doesn't say to me that this country is going down the pan from April.

It's a good point. Demand for new homes is massive, all sorts of developments being allowed now that would have been refused ten years ago ( not necessarily a good thing). The weakness of the £ has the obvious impact of a) making imports more expensive and, at least in theory, creating opportunity for manufacturing (remember that?) onshore and b) making our exports cheaper for overseas buyers, both of goods and, importantly, tourism - the U.K. is a very, very cheap place to visit at present.

I wish your neighbour in the print business well - it is cut throat with very fine profit margins and a need for massive capital expenditure as technology develops, a notorious industry for business failures.. hopefully they get it right where so many others get it wrong.

 

[andyBeaker]

just as a bit of an aside to all this, my works is in the back end of nowhere in Lincolnshire, the amount of investment on the small local industrial estate is eye watering, a printing firm has expanded massively buildings and offices which now double the size of before, also buying up land which I can only presume is to allow for further expansion. A local builders merchant has bought a 6 acre plot and starting next year creating a bespoke yard, next door to me is a T towel company they are after buying an acre in order to expand their capability. My point being, this is a very small industrial estate in the middle of nowhere and the investment being poured in doesn't correspond to the chaotic forecast we are all being fed, or am I missing something.

Oh, and drive around the country, the building works both housing and industrial (just how many more car dealers can we cope with) doesn't say to me that this country is going down the pan from April.

the £ against the aussie $ was $3 to the £1 in 2000, 3 years ago it was 1.36, now at the post office its 1.72 yes its going to fluctuate and over the long term find its level there or there abouts. a weak pound also has benefits for trade too, its hovered around 1.10 to the euro for quite a while now, I`m pretty confident when the dust settles it`ll find its true level once again. that's presuming we do leave. but as has been stated before with these clowns not doing what the electorate asked for is a disgrace and exasperates the mess this country is in.

Unfortunately currency doesnt'find it's level' over time - it fluctuates according to economic conditions. At it's base level it comes down to supply and demand, the same way that most things are priced. If there is more demand and/or reduced supply the price goes up, if there is less demand/over supply then the price goes down (that's not a perfect description as there are some examples that do not fit this, and price fixing/cartels can and do distort supply and demand.)

Large businesses plan their currency exposures very carefully - airlines, for instance, will already have booked their US$ needs for at least twelve months ahead so, unless the £ strengthens in the next year or so you will see travel costs going even further through the roof I (the industry works largely in US$) and there will be inevitable casualties as demand falls.

The Exchange Rate Mechanism adopted by the EU was an effort to reduce damaging currency fluctuations and to a degree it worked. And then collapsed,as it simply wasn't as strong as the economic forces it aimed to control.

All very complex. However, if Base Rate were to go up to 10% on Monday the £ would be very strong in an instant.

Oh, but hang on a minute, that would mean mortgages and business borrowings would become more expensive and cause hardship.

It's all very, very complex and nobody knows the answers.

However, I believe the £ will weaken further and have this week bought €s to fund future holidays. If I am wrong the loss won't kill me, but if I am right I can be a smug git.


https://en.m.wikipedia.org/wiki/European_Exchange_Rate_Mechanism

 

[Jaws]

Being an old fart I well remember my uncle moaning because he only got $3.50 for a quid

 

[andyBeaker]

Being an old fart I well remember my uncle moaning because he only got $3.50 for a quid

I have a friend who moved from the uk to Cyprus about fifteen years ago. ''Twas the land of milk and honey when a £ of Cyprus pounds would get you a night out for four, taxi both ways and a night of passion with the innkeepers son/daughter.

He gets his pension in £s so has to convert to € and is now living a less than great life. In theory he has benefitted from his property being € denominated but the reality is different as nobody is buying.....


It's all very complex........