The falling pound

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This topic contains 92 replies, has 17 voices, and was last updated by  aagrin 8 years, 10 months ago.

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  • #110832

    mastercoop
    Member

    Is it just me or has anyone else with pounds noticed their wallets getting lighter over the last year? CryAt this rate the brits will all be heading to Governador Vallidolares to make a quick buck to send home to the family.

  • #111038

    Anonymous

    Ermm

  • #111990

    mastercoop
    Member

    Things are bad enough in the UK without the Euro. It was trying to peg to the Euro which screwed up Britain in the early 90s, and Britains recent 25% devaluation will hopefully help it end the recession earlier than might otherwise be the case.

  • #111997

    micko
    Member

    You think this devaluation is just another way to knock down the super-valuation of real estate? I think this is coming in the US because certain powers to be want to ‘shore up’ the housing market (prices). The problem is the everyone who works for a wage or salary gets screwed.

  • #112005

    mastercoop
    Member

    [QUOTE=DUNGA]You think this devaluation is just another way to knock down the super-valuation of real estate? I think this is coming in the US because certain powers to be want to ‘shore up’ the housing market (prices). The problem is the everyone who works for a wage or salary gets screwed.[/QUOTE]
    The devaluation wasn’t necessarily intended, it happened because of a combination of collapsing interest rates, which was required to try to shore up the collapsing economy, and the poor perception of the state of the British economy. However, a similar thing happened in 1931, which helped the UK avoid the worst of the Great Depression, when the US economy contracted 30% form peak to trough, whereas the UK economy only declined 5%. I think the Euro has further to fall, though it’s more difficult to say with the dollar. With falling currencies, wage-earners don’t tend to notice it that much in developed countries, as it’s all relative. A wage-earners mortgage payments and grocery bill don’t change – he feels it when travelling, but this is a marginal cost for him. The housing market probably can’t be shored up, certainly not unless banks turn on the mortgage tap again, which won’t be any time soon.

  • #112006

    mastercoop
    Member

    [QUOTE=frank4000][QUOTE=Juninho]

    Things are bad enough in the UK without the Euro. It was trying to peg to the Euro which screwed up Britain in the early 90s, and Britains recent 25% devaluation will hopefully help it end the recession earlier than might otherwise be the case.

    [/QUOTE]

    tell me what is bad about the euro?

    [/QUOTE]
    For Britian the answer is it stops the UK setting interest rates at a level which is appropriate for the UK economy, as opposed to the German economy. The UK is particularly sensitive to interest rates, as it has 70% owner occupation (Germany has only 30%) of whom most have mortgages, and it has higher personal debt than Germany.

  • #112077

    mastercoop
    Member

    [QUOTE=frank4000][QUOTE=Juninho]

    Things are bad enough in the UK without the Euro. It was trying to peg to the Euro which screwed up Britain in the early 90s, and Britains recent 25% devaluation will hopefully help it end the recession earlier than might otherwise be the case.

    [/QUOTE] tell me what is bad about the euro? [/QUOTE]

    Monetary union has left half of Europe trapped in depression

    By Ambrose Evans-Pritchard
    Last Updated: 6:52PM GMT 17 Jan 2009

    Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

    Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

    A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece’s social fabric is unravelling before the pain begins, which bodes ill.

    Each is a victim of ill-judged economic policies foisted upon them by elites in thrall to Europe’s monetary project ‚Äì either in EMU or preparing to join ‚Äì and each is trapped.

    As UKIP leader Nigel Farage put it in a rare voice of dissent at the euro’s 10th birthday triumph in Strasbourg, EMU-land has become a V√∂lker-Kerker ‚Äì a “prison of nations”, to borrow from the Austro-Hungarian Empire.

    This week, Riga’s cobbled streets became a war zone. Protesters armed with blocks of ice smashed up Latvia’s finance ministry. Hundreds tried to force their way into the legislature, enraged by austerity cuts.

    “Trust in the state’s authority and officials has fallen catastrophically,” said President Valdis Zatlers,
    who called for the dissolution of parliament.

    In Lithuania, riot police fired rubber-bullets on a trade union march. Dogs chased stragglers into the Vilnia river. A demonstration outside Bulgaria’s parliament in Sofia turned violent on Wednesday.

    These three states are all members of the Exchange Rate Mechanism (ERM2), the euro’s pre-detention cell. They must join. It is written into their EU contracts.

    The result of subjecting ex-Soviet catch-up economies to the monetary regime of the leaden West has been massive overheating. Latvia’s current account deficit hit 26pc of GDP. Riga property prices surpassed Berlin.

    The inevitable bust is proving epic. Latvia’s property group Balsts says Riga flat prices have fallen 56pc since mid-2007. The economy contracted 18pc annualised over the last six months.

    Leaked documents reveal – despite a blizzard of lies by EU and Latvian officials – that the International Monetary Fund called for devaluation as part of a €7.5bn joint rescue for Latvia. Such adjustments are crucial in IMF deals. They allow countries to claw their way back to health without suffering perma-slump.

    This was blocked by Brussels – purportedly because mortgage debt in euros and Swiss francs precluded that option. IMF documents dispute this. A society is being sacrificed on the altar of the EMU project.

    Latvians have company. Dublin expects Ireland’s economy to contract 4pc this year. The deficit will reach 12pc of GDP by 2010 on current policies. “This is not sustainable,” said the treasury. Hence the draconian wage deflation now threatened by the Taoiseach.

    The Celtic Tiger has faced the test bravely. No government in Europe has been so honest. It is a tragedy that sterling’s crash should have compounded their woes at this moment. To cap it all, Dell is decamping to Poland with 4pc of GDP. Irish wages crept too high during
    the heady years when Euroland interest rates of 2pc so beguiled the nation.

    Spain lost a million jobs in 2008. Madrid is bracing for 16pc unemployment by year’s end.

    Private economists fear 25pc before it is over. Spain’s wage inflation has priced the workforce out of Europe’s markets. EMU logic is wage deflation for year after year. With Spain’s high debt levels, this is impossible.

    Either Mr Zapatero stops the madness, or Spanish democracy will stop him. The left wing of his PSOE party is already peeling off, just as the French left is peeling off to fight “l’euro dictature capitaliste”.

    Italy’s treasury awaits each bond auction with dread, wondering if can offload ‚Ǩ200bn of debt this year. Spreads reached a fresh post-EMU high of 149 last week. The debt compound noose is tightening around Rome’s throat. Italian journalists have begun to talk of Europe’s “Tequila Crisis” ‚Äì a new twist.

    They mean that capital flight from Club Med could set off an unstoppable process.

    Mexico’s Tequila drama in 1994 was triggered by a combination of the Chiapas uprising, a current account haemorrhage, and bond jitters. The dollar-peso peg snapped when elites began moving money to US banks. The game was up within days.

    Fixed exchange systems ‚Äì and EMU is just a glorified version ‚Äì rupture suddenly. Things can seem eerily calm for a long time. Politicians swear by the parity. Remember John Major’s “soft-option” defiance days before the ERM blew apart in 1992? Or Philip Snowden’s defence of sterling before a Royal Navy mutiny forced Britain off the Gold Standard in 1931.

    Don’t expect tremors before an earthquake ‚Äì and there is no fault line of greater historic violence than the crunching plates where Latin Europe meets Teutonia.

    Greece no longer dares sell long bonds to fund its debt. It sold ‚Ǩ2.5bn last week at short rates, mostly 3-months and 6-months. This is a dangerous game. It stores up “roll-over risk” for later in the year. Hedge funds are circling.

    Traders suspect that investors are dumping their Club Med and Irish debt immediately on the European Central Bank in “repo” actions.

    In other words, the ECB is already providing a stealth bail-out for Europe’s governments ‚Äì though secrecy veils all.

    An EU debt union is being created, in breach of EU law. Liabilities are being shifted quietly on to German taxpayers. What happens when Germany’s hard-working citizens find out?

  • #112079

    mastercoop
    Member

    [QUOTE=frank4000]but this is the general monetary policy everywhere in the world today with varying degrees[/QUOTE] The point is that the Euro is forcing many European countries to be forced into a rate which is totally inappropriate for it (as opposed to Germeny, the dominant economy), which has caused booms and depressions already as seen across Europe. Many are openly questionning if the Euro will even survive.

  • #112093

    macpay
    Member

    [QUOTE=frank4000][QUOTE=Juninho]

    Things are bad enough in the UK without the Euro. It was trying to peg to the Euro which screwed up Britain in the early 90s, and Britains recent 25% devaluation will hopefully help it end the recession earlier than might otherwise be the case.

    [/QUOTE] tell me what is bad about the euro? [/QUOTE] We want to stay british. The Euro is one step in the direction of a European Superstate. No thank you!!! SussexWithLove2009-01-18 10:48:24

  • #112099

    Gringo go go
    Participant

    [QUOTE=Juninho][QUOTE=frank4000][QUOTE=Juninho]

    Things are bad enough in the UK without the Euro. It was trying to peg to the Euro which screwed up Britain in the early 90s, and Britains recent 25% devaluation will hopefully help it end the recession earlier than might otherwise be the case.

    [/QUOTE]

    tell me what is bad about the euro?

    [/QUOTE]

    Monetary union has left half of Europe trapped in depression

    [/QUOTE]
    Thanks for posting that. I think it says what a lot of people were thinking a few years ago.
    I remember that in the dim and distant that the Pound would have to join the Euro after a certain amount of time had elapsed. I believe that time is due in a year or two.

  • #112132

    mastercoop
    Member

    There was talk of us joining, but in one of the few things he’s got right, Gordan Brown virtually kayboshed the whole thing by saying that 5 tests had to be satisfied, such as convergence of the UK economy with that of Europe. Looks like the tests will never be met. Now the problem is the UK deficit, due to hit at least 8% of GDP – to join the Euro this can’t be above 3%, although Greece and Italy fudged this initially to join. However looking at the state of them now, they probably wish they hadn’t. I can’t see the club holding together, but wouldn’t be surprised to see a hard core centered around France and Germany sticking with it.

  • #112220

    mastercoop
    Member

    Help Ireland or it will exit euro, economist warns

    A leading Irish economist has called on Dublin to threaten withdrawal from the euro unless Europe’s big powers do more to rescue Ireland’s economy.

    By Ambrose Evans-Pritchard
    Last Updated: 9:12AM GMT 19 Jan 2009

    David McWilliams, a former official at the Irish central bank, has said that Ireland could withdraw from the euro if they are not given more help Photo: Rex Features

    “This is war: countries have to defend themselves,” said David McWilliams, a former official at the Irish central bank.

    “It is essential that we go to Europe and say we have a serious problem. We say, either we default or we pull out of Europe,” he told RTE radio.

    “If Ireland continues hurtling down this road, which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece,” he said.

    Mr McWilliams, a former UBS director and now prominent broadcaster, has broken the ultimate taboo by evoking threats to precipitate an EMU crisis, which would risk a chain reaction across the eurozone’s southern belt, where yield spreads on state bonds are already flashing warning signals. The comments reflect growing bitterness in Dublin over the way the country has been treated after voting against the EU’s Lisbon Treaty.

    “If we have a single currency there are obligations and responsibilities on both sides. The idea that Germany and France can just hang us out to dry, as has been the talk in the last couple of days should not be taken lying down,” he said.

    Mr McWilliams cited the example of New York’s threat to default in 1975. President Gerald Ford “blinked” at the 11th hour and backed a bail-out to prevent broader damage.

    As yet, there is no public support for withdrawal from the euro. A Quantum poll published by the Irish Independentyesterday found that 97pc reject such a radical move. Three-quarters are in favour of a national government, an idea floated by Unilever’s ex-chief Niall Fitzgerald.

    “The economic disaster we are facing is unlike anything which has happened in my lifetime. It is a national crisis and needs a government of national unity,” Mr Fitzgerald said.

    Mr McWilliams said EMU was preventing Irish recovery. “The only way we can win this war is by becoming, once again, an export country. We can do what we are doing now, which is to reduce our wages, throw more people on the dole and suffer a long contraction. The other model is what the British are doing. Britain is letting sterling fall so that the problem becomes someone else’s. But we, of course, have ruled this out by our euro membership.

    “We are paying twice for the euro: once on the exchange rate and once more on the interest rate,” he said.

    “By keeping with the current policy, the state is ensuring that Ireland turns itself into a large debt-repayment machine. Is this the sort of strategy to win wars? ” he said

  • #112262

    mastercoop
    Member

    It will get worse before it gets better. Certainly it is looking very doubtful that the Euro club will keep all its members this year.

  • #112268

    MMM_SA
    Member

    no matter what way you put it .. The pound is low and will be low for some time which is killing me.. then again maybe with obama in power on the 20th he might be able to make a new change in the global direction of the economy,.. thus effecting the UK economy?

  • #112299

    x32792
    Member

    [QUOTE=Juninho][

    The point is that the Euro is forcing many European countries to be forced into a rate which is totally inappropriate for it (as opposed to Germeny, the dominant economy), which has caused booms and depressions already as seen across Europe. Many are openly questionning if the Euro will even survive.

    [/QUOTE]The Euro and the EU experiment is just a load of political BUll, it is being driven by politico’s against the will of the people, which is why is will never fully work.
    As you say above, different economy’s have different cycles and a one size fits all interest rate is doing more harm than good. (look at what has happened to Spain)
    You can see why the politico’s don’t want referendums because the people will vote no, where that has happened they just had another vote until they get a yes (see Ireland).
    This is what is called Democracy, if you don’t get the right answer keep asking the question until you do LOLLOLLOL

  • #112301

    mastercoop
    Member

    Europe (not its component nation states) is about as democratic as Zimbabwe. Frank – I’d be careful about stockpiling those Euros as I fear they are about to plummet as the full horror of the realities of the recession sink in. I fear that little Obama can do will affect the pound.

  • #112410

    mastercoop
    Member

    The euro is torture instrument for Spain

    Ten years of euro membership have lured Spain into a terrible trap.

    By Ambrose Evans-Pritchard
    Last Updated: 10:26AM GMT 20 Jan 2009

    Real interest rates of minus 2pc set by Frankfurt for German needs led to a Spanish property bubble of fearsome scale. Construction rose to 16pc of GDP, trumping the British and US bubble by large margins.

    Spanish companies tapped the euro capital markets as if there was tomorrow. Reliance on foreign borrowing reached 10pc of GDP, among the world’s highest. Wages went up and up. The result is a current account deficit that is also 10pc of GDP.

    Now what? A country with full control over all levers of economic policy can claw its way out of such a hole. Spain can do almost nothing.

    A key reason why Standard & Poor’s has stripped Spain of its AAA credit rating is that the country no longer sets its own interest rates and cannot devalue its currency to restore balance.

    S&P did not say explicitly that EMU has become an instrument of debt-deflation torture for Spain. That would be breaking the great euro taboo. It insisted that EMU provides an anchor of stability. But that is pro-forma dressing. The sub-text is that Spain cannot recover until it breaks its chains.

    It is true that Germany regained competitiveness by screwing down wages in the early part of this decade, but it did so when southern Europe was inflating merrily.

    Spain faces a much harder task. It has to claw back 20pc to 30pc in labour competitiveness against a stern Germany that will not inflate. Therefore, Spain must deflate. It must embark on a 1930s policy of draconian wage cuts.

    It remains to be seen whether this will be tolerated by a democracy. Brussels expects Spanish unemployment to reach 19pc – or 4.5m people – by late next year. This is a depression.

    Workers are already rising up against the ruling socialists. An angry march by trade unions in Zaragoza on Sunday is the first shot across the bows.

    As yet, no Spanish heavyweight has questioned the orthodoxy of EMU membership. That may change, as it is changing in Ireland. The euro system is starting to inflict very grave hardship on ordinary people. This is exactly what critics always feared. In the end, it will breed conflict.

  • #112413

    BLACK WIDOW
    Member

    You are so right about that. From day one, the euro came in holland, prices went up double. Of course the government tried to hide it and deny that. When the euro came into spain it was even worse. Supermarkets begin to get more expensive then the supermarkets in Holland. But salary stayed the same for the locals. Dont forget, spain was and is still a thirdworld country in many ways. Many spanish have to work 40 hours (in horeca 60 hours) a week and get 1000 euro a month. In the end it will breed conflict I also think.

  • #112476

    x32792
    Member

    [QUOTE=frank4000]i think the monetary system as a whole should overhauled[/QUOTE]back in the dayWink
    2 farthings = 1 halfpenny
    2 halfpence = 1 penny (1d)
    3 pence = 1 thruppence (3d)
    6 pence = 1 sixpence (a ‘tanner’) (6d)
    12 pence = 1 shilling (a bob) (1s)
    2 shillings = 1 florin ( a ‘two bob bit’) (2s)
    2 shillings and 6 pence = 1 half crown (2s 6d)
    5 shillings = 1 Crown (5s)

  • #112543

    mastercoop
    Member

    Jim Rogers, a former partner of George Soros, the man renowned for his attack on sterling on Black Wednesday in 1992, told fellow investors: “I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK.”

  • #112545

    Not a massive surprise seeing as our 1 major surviving sector, banking has all but completely collapsed!

  • #112558

    mastercoop
    Member

    Ironic that it collapsed under the weight of the 80% of loans which were to foreign borrowers.

  • #112588

    I blame the Americans and the Scottish. Sorry Clap

  • #112677

    mastercoop
    Member

    If anything it was like a pyramid scheme, not a Ponzi scheme (where all transactions are through 1 individual like Ponzi or Madoff)

  • #112679

    Gringo go go
    Participant

    Its good that the Northern Rock employees managed to get their 10% bonuses before the Pound is completely worthless.

  • #112683

    Xpert1
    Member

    in their defence, they were offered the bonus if they stayed on after the company was nationalised, we are not talking fat cat bonuses here, just an encouragement for regular workers…

  • #112688

    mastercoop
    Member

    Its worth a few thousand pounds in most cases. It’s just lucky for the brits that the Real has kept pace with the pound most of the way down.Thumbs%20Down

  • #112697

    ecenur
    Member
  • #112704

    micko
    Member

    Roubini says the US banking system is insolvent.
    Hey, that’s being negative!!!

  • #112837

    ecenur
    Member

    That’s roughly 3 years that he is telling th same thing, that banks would get bust and so far roubini i about the only one who has been right…
    At ¬£/for ‚Ǩ , i would say the devalution is over…

  • #112856

    micko
    Member

    “[Jim] Rogers, chairman of Singapore-based RogersHoldings, told Bloomberg Television earlier this week: ‘I would urgeyou to sell any sterling you might have. It’s finished. I hate to sayit, but I would not put any money in the UK.'”
    The Herald – 24 Jan 2009
    I must admit that I found this a bit hysterical when I read it but it isn’t some guy in the pub, or in a chat room.
    DUNGA2009-01-25 11:42:15

  • #112872

    mastercoop
    Member

    [QUOTE=Baron noir]That’s roughly 3 years that he is telling th same thing, that banks would get bust and so far roubini i about the only one who has been right…
    At ¬£/for ‚Ǩ , i would say the devalution is over…
    [/QUOTE] Why do you think the devaluation is over?

  • #112891

    mastercoop
    Member

    But he was talking about the ¬£ against the Euro. In any case, why can’t you see the pound slipping another 15 cents?

  • #112928

    ecenur
    Member

    [QUOTE=Juninho][QUOTE=Baron noir]That’s roughly 3 years that he is telling th same thing, that banks would get bust and so far roubini i about the only one who has been right…
    At ¬£/for ‚Ǩ , i would say the devalution is over…
    [/QUOTE]

    Why do you think the devaluation is over?

    [/QUOTE]
    Just a felling Juninho, everyday watching the currencies and EUR/GBP is not getting above 1, it’s like the DJ I believe it can go lower than 8 000, but each time it keeps coming back to that level, and Trichet is going to cut again interest rates so everybody from Japan to UK, that’s why EUR is down against USD ,will have a zero haircut !!!
    And not for six months !!!

  • #113015

    mastercoop
    Member

    [QUOTE=frank4000]

    Everyone right now is caught in the eufora that this stimulus with inject immediate life in the US economy and kick start the world economy, However this will not happen and as result people will lose confidence in the dollar and pound will rebound some. the euro however i am not so sure off. To many of the eurozone economies are in the dangerous position of defaulting. This is beginning to look like mmexico on a worldwide scale. If this continues i see a failure of the money system in 2 – 4 years and that is conservative estimate.

    [/QUOTE] I agree with much of this. I think Obama is the Emperor without any clothes, but time will prove me right (or wrong). The pound gained 4 cents today on the dollar for the reasons you mention. I think the Eurozone will be lucky to stay intact over this recession. What do you mean by a failure of the money system?

  • #113017

    mastercoop
    Member

    [QUOTE=Baron noir] [QUOTE=Juninho][QUOTE=Baron noir]That’s roughly 3 years that he is telling th same thing, that banks would get bust and so far roubini i about the only one who has been right…
    At ¬£/for ‚Ǩ , i would say the devalution is over…
    [/QUOTE] Why do you think the devaluation is over? [/QUOTE]
    Just a felling Juninho, everyday watching the currencies and EUR/GBP is not getting above 1, it’s like the DJ I believe it can go lower than 8 000, but each time it keeps coming back to that level, and Trichet is going to cut again interest rates so everybody from Japan to UK, that’s why EUR is down against USD ,will have a zero haircut !!!
    And not for six months !!!
    [/QUOTE] Lets hope you’re rightApprove

  • #113074

    mastercoop
    Member

    Don’t count on it. Unless you think we should all give communism another go.

  • #114017

    mastercoop
    Member

    A world without debt would mean no-one could borrow. And you have to borrow to speculate. Speculate to accumulate. No risk, no reward. Your world would see little activity and no-one would be able to progress.

  • #114027

    micko
    Member

    [QUOTE=Juninho]A world without debt would mean no-one could borrow. And you have to borrow to speculate. Speculate to accumulate. No risk, no reward. Your world would see little activity and no-one would be able to progress.[/QUOTE] What’s wrong with producing goods and services? Why not make a profit with a factory rather than a casino. A lot of the economic commentary I have been reading about the current ‘crisis’ points to the financial markets’ shift from investments in productive industry to high risk speculation as it’s root cause.
    Of course debt is still necessary to capitalize productive enterprise. But just as a bank would wisely decline to loan me money to play blackjack, financiers and investors should be wary of too much high return speculation. They can get burnt.
    DUNGA2009-02-12 15:42:43

  • #114041

    ecenur
    Member

    Talking about speculation read the other day that Soros( Yes he is still here) closed down it’s short sterling position, risk/reward not intersting, and he said no clue aboutPound up or down, but since December well it’s all pretty quiet in forex…
    Dunga you are absolutely right, present crisis is becuse banks wanted to make a quick buck intead of investing in businesses , where it takes usually 5 to 10 years to make a profit.
    And well the EUR/GBP is at about the same level than one month ago, EUR is lower but I would not say it could not go back above 0,9, 1,00 is another matter !!!

  • #114074

    mastercoop
    Member

    [QUOTE=frank4000]the present system we have is less than 1 – 2 thousand years old[/QUOTE] It’s a great deal older than that I’m afraid. Gold has been used as base currency in civilizations going back 4,500 years to Sargan the Great’s time, although securitizations and CDOs are more recent inventions and only in 1931 did Britain abandon the gold standard.

  • #114075

    mastercoop
    Member

    [QUOTE=DUNGA] [QUOTE=Juninho]A world without debt would mean no-one could borrow. And you have to borrow to speculate. Speculate to accumulate. No risk, no reward. Your world would see little activity and no-one would be able to progress.[/QUOTE] What’s wrong with producing goods and services? Why not make a profit with a factory rather than a casino. A lot of the economic commentary I have been reading about the current ‘crisis’ points to the financial markets’ shift from investments in productive industry to high risk speculation as it’s root cause.
    Of course debt is still necessary to capitalize productive enterprise. But just as a bank would wisely decline to loan me money to play blackjack, financiers and investors should be wary of too much high return speculation. They can get burnt.

    [/QUOTE] I quite agree, but my argument wasn’t that irresponsible speculation is necessary, but that often a loan is needed to build the factory in the first place. Debt is the oil that lubricates the global economy and the fuel that drives it forwards. Without it you have recession and then depression.

  • #114091

    x32792
    Member

    [QUOTE=DUNGA][QUOTE=Juninho]A world without debt would mean no-one could borrow. And you have to borrow to speculate. Speculate to accumulate. No risk, no reward. Your world would see little activity and no-one would be able to progress.[/QUOTE] What’s wrong with producing goods and services? Why not make a profit with a factory rather than a casino.A lot of the economic commentary I have been reading about the current ‘crisis’ points to the financial markets’ shift from investments in productive industry to high risk speculation as it’s root cause.
    Of course debt is still necessary to capitalize productive enterprise. But just as a bank would wisely decline to loan me money to play blackjack, financiers and investors should be wary of too much high return speculation. They can get burnt.
    [/QUOTE]You are correct, the Capitalist system was/is based on the production,distribution and sale of goods, over the last few years this seems tohave been forgotten and the system has failed.
    Governments have rushed to try and put measures in place without fixingthe problem, example, if you have a bucket with a hole in it, yourepair the hole before you refill the bucket or you will waste thewater.
    Governments have thrown money at the problem without fixing the leeks,the result is that much of the money they have thrown hasn’t had theeffect they desired.
    Wouldn’t it have been much better if instead of the Government givingbillions to the banks who now claim it is to risky to llend, to havegiven the money directly to the people?
    This would have meant that people would have been given of example,$25,000 to $35,000 each, what would they have done with this money? They wouldhave spent it thus stimulating the economy, they would have put it inthe bank, thus giving the bank the money to lend or they would havepaid of debt, all the things the Governments said are needed. (it would also have meant that many people do not lose their homes thus saving Governments more money)
    In my view a much better way forward than giving money to Banks who still haven’t explained the true extent of there exposure.

  • #114093

    irishvan
    Member

    The world survived for thousands of years without a debt backed system until we went through the industrial revolution. That changed the world and they went hand in hand. For industry to take off and expand, they had to borrow large sums. Using cash on a small, limited basis was no longer an option. We all have our own ideas on how and why the current situation happened. That makes no difference right now-it’s history. The financial system that we are in is based on trust, and all the trust is gone. Banks don’t trust banks, people don’t trust the financial institutions, and visa versa. It was base on trust before and it’s going to take a looooong time to get that back, even after the banks are propped up and secured, the markets are stable, foreclosures are declining, and economies are moving once again.

  • #114095

    x32792
    Member

    [QUOTE=MovingSoon]

    We all have our own ideas on how and why the current situation happened. That makes no difference right now-it’s history.

    [/QUOTE]I disagree with this statement.
    Governments have thrown billions at the banking system without fully understanding the extent of the problem, that is why the measures taken so far have failed to have the desired effect.
    Governments do not know the full extent of bank losses or there exposure to further losses.
    Without this basic information I don’t see how they can put forward workable solutions.

  • #114127

    irishvan
    Member

    LondonLad- you missed my point… I’m talking about what was the starting point of the now worldwide economic collapse…thus the statement “how and why the current situation happened.” I’m not talking about what is going on now. Even in the US, there are multiple places to put blame: Bush, Clinton, World Bank, mortgage industry, Wall Street…let alone other areas and persons. That is the reason basically I’m saying how and why is not that important and matters little…it’s how the hell we can get out of the mess now.

  • #114412

    ecenur
    Member

    [QUOTE=frank4000]well we could figure that one out we would be rich[/QUOTE]
    SleepyActually Roubini is doing well,but when I came across his blog,roughly three years ago, I thought this guy is nut !!! Then I went more often and sow well he is damn right, I remember how he was insulted by W.S guys at the beginning, now he got invitations for every TV…
    But in my opinion, and many, only Bank nationalisation might cool things and stop more to got unemployed…in about anything..
    ConfusedI survived 93/94 pretty easily, but this… is well only 1929 comes to mind, but was not there !!! so can’t speak first hand…

  • #114433

    Gringo go go
    Participant

    [QUOTE=frank4000]well you better brace your self as it is about to get worse. There alot of skeletons in banks closets that we have not heard of yet.[/QUOTE]
    I think things will get better once all the bank employees have been paid their millions in bonuses. Then what s left will go towards helping the country.
    Crisis, what crisis? Jim never said it, the Sun didLOL
    tamashin2009-02-22 18:12:43

  • #114434

    ClaudePeebles
    Participant

    [QUOTE=tamashin]…bank employees have been paid there millions in bonuses…
    [/QUOTE] Perhaps those millions should have been spent on education….

  • #114439

    Gringo go go
    Participant

    Thanks Treey I downt no woteid do witthowt tu.
    Nice to see your back by the way, now was that a mistakeConfused? Hows the monkey website coming on?

  • #114444

    tomasito
    Member

    Will be interesting to see how Brasil’s recently-expanded middle class fare as its country’s exports rapidly decline, their credits are crunched, massive numbers of jobs are lost, and millions slip back into poverty. Those constantly living in poverty often seem to be accustom to their lot. Not so with those who were once impoverished, who rise out of it, only then to be pushed back into poverty.

  • #114821

    ecenur
    Member

    http://www.guardian.co.uk/commentisfree/2009/mar/01/fred-goodwin-pension-rbs
    I just thought it was a great article, and very funny !!!

  • #115247

    tomasito
    Member

    Not-So-Beautiful Brazil

    Forbes, 6 March, 2009 By Carl Gutierrez Industrial production in the country slipped 17.2% in January.

    Brazil’s economy is seeing drastic drops in its industrial production, as the global slowdown sets in to Latin American’s largest economy.

    Brazil’s government reported the country’s industrial production fell 17.2% in January, compared with the same month a year earlier.

    The figure marked the largest decline since the country began keeping track of it in 1991. According to the report, which came from government’s IBGE statistics agency, the sectors most affected include automobile production, chemicals and steel.

    Industrial production rose 2.3% in January compared with December as the government initiated economic stimulus measures designed to shore up the limping economy. The results were still short of expectations.

    Despite the bad news, Brazil’s Bovespa rose 0.6%, or 230.65 points, to 37,599.58, on Friday afternoon.

    In January, Brazil’s Labor Ministry reported the country shed 654,000 jobs in December, more than double the 319,414 reported in December 2007. The loss was the worst since May 1999, with the manufacturing, agribusiness and construction sectors taking the biggest beating. Labor Minister Carlos Lupi said at the time that the job losses were a direct impact of the global financial crisis.

    Regardless of the recent difficult economic data, the country’s leaders have consistently argued for the relative strength of the country’s position, while undertaking large measures to promote growth.

  • #116908

    aagrin
    Member
    Exchange Rate
    U S Dollars 1.366078
    Euros 1.026347
    Argentinian Pesos 4.889742
    Australian Dollars 1.970423
    Bahamian Dollars 1.316039
    Bahraini Dinars 0.508773
    Bangladeshi Takas 90.833001
    Barbados Dollars 2.618917
    Belize Dollars 2.488364
    Bermudian Dollars 1.302878
    Botswana Pulas 9.662414
    Brazilian Reals 2.973620

    From a HSBC ATM these would be the rates today, not to bad really.

  • #116923

    micko
    Member

    Where’s that from – tomjo? It’s not making total sense to me. Real-Dolar ptax is 2.3289 I believe. I am headed to the bank as it is.

  • #116926

    aagrin
    Member

    Ah yes sorry I should have edited the format first, it’s vs the pound if you where to have a UK bank account, and to take funds from an ATM in the country’s listed.
    So £1 = R2.973620 today through a HSBC ATM.
    tomjo2009-03-31 13:48:23

  • #116950

    micko
    Member

    Well I got 2.389 today but that was with my Wells Fargo card which has a transaction fee at the US end. If I had used my HSBC card I wouldn’t pay a fee but they pay a different (lower) rate, that is on a US account at least. That’s why I was interested in the chart. I haven’t bothered to figure out what the percent built into the HSBC interbank is.DUNGA2009-03-31 16:39:32

  • #116954

    jonwilly
    Member

    [QUOTE=DUNGA]Well I got 2.389 today but that was with my Wells Fargo card which has a transaction fee at the US end. If I had used my HSBC card I wouldn’t pay a fee but they pay a different (lower) rate, that is on a US account at least. That’s why I was interested in the chart. I haven’t bothered to figure out what the percent built into the HSBC interbank is.[/QUOTE]
    10%

  • #116956

    aagrin
    Member

    https://hsss.hsbc.co.uk/ukpersonal/TravelMoney/Rates.jsp
    That is the site to check what you would get if to yous a HSBC ATM account from the UK in Brazil, please check daily as its changing a lot day to day at the moment.
    And bear in mind you will get charged if you don’t have a bank account + for the transaction, think its about ¬£2 from visa.
    tomjo2009-04-01 06:34:25

  • #13787

    Benjamin86
    Member
  • #117817

    aagrin
    Member
    Market Data


    Last Updated: Monday, 13 April, 2009, 19:56 GMT 20:56 UK var javascript_version = 1.0;javascript_version = 1.1;

    Search%20company%20or%20market
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    Pound Sterling – Brazilian Real
    GBP:BRL%20one%20month%20chart
    Select time span for charts:One monthThree monthsTwelve monthsIntra-day
    £1 buys
    change
    %
    52 wk-h
    52 wk-l
    Real
    3.21690
    0.03160
    up
    0.99
    up 4.03470 2.96060

    More currency pages
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    Asia Pacific
    £1 buys
    change
    %
    52 wk-h
    52 wk-l
    Japanese Yen 148.74000
    1.40000
    up
    0.95
    up 215.80000 122.45000
    Australian Dollar 2.03010
    0.00990
    down
    0.49
    down 2.64870 2.03810
    New Zealand Dollar 2.50850
    0.00770
    down
    0.30
    down 2.88150 2.46610
    Hong Kong Dollar 11.52200
    0.14900
    up
    1.31
    up 15.64100 10.66250
    Singapore Dollar 2.25300
    0.03100
    up
    1.40
    up 2.72930 2.07050
    Taiwanese Dollar 50.06610
    0.51080
    up
    1.03
    up 60.89790 46.49380
    Thai Baht 53.01330
    0.95140
    up
    1.83
    up 67.20540 48.15480
    Malaysian Ringgit 5.39230
    0.09220
    up
    1.74
    up 6.52120 5.00100
    Indonesian Rupiah 16650.07060
    40.14990
    up
    0.24
    up 18790.59670 15523.84320
    South Korean Won 1971.01880
    37.49960
    up
    1.94
    up 2413.70360 1815.54630
    South Asia
    £1 buys
    change
    %
    52 wk-h
    52 wk-l
    Indian Rupee 73.95480
    0.79150
    up
    1.08
    up 86.29220 67.70440
    Bangladeshi Taka 102.72500
    2.27100
    up
    2.26
    up 137.74100 93.89900
    Pakistani Rupee 119.79640
    1.89650
    up
    1.61
    up 144.71900 109.04330
    Sri Lankan Rupee 172.13350
    2.15990
    up
    1.27
    up 215.80320 157.28770
    Europe / Africa / Middle East
    £1 buys
    change
    %
    52 wk-h
    52 wk-l
    Euro 1.11020
    0.00460
    down
    0.41
    down 1.29170 1.02490
    Danish Kroner 8.27100
    0.03450
    down
    0.42
    down 9.63700 7.63900
    Israeli S

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