The Brexit Consequences Thread

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Deleted 72187

Guest
Not being rude, but that should be obvious. The fact is that the globe is in recession and Gold as a hedge has tended for the up over recent years.
Not sure what you mean here as we don't trade in gold or pay for goods and services. Not sure what point you are making?
It's why I say there will have be an international adjustment in order for some sort of parity to remain possible. 75
You expect GBP/EUR and/or other fiat currencies to adjust to 1:1. If so, why?
75 Billion is relatively peanuts but the EU is trying to spend 10 times that amount as some sort of a protective measure.
75 billion of imports that are 25% more expensive than 5 years ago. Hardly peanuts.

750 billion of economic stimulus. It remains to be seen in what form this takes....
Fridays meeting requires unanimity- I'm not holding my breath.
Agreed
 
Not sure what you mean here as we don't trade in gold or pay for goods and services. Not sure what point you are making?

You expect GBP/EUR and/or other fiat currencies to adjust to 1:1. If so, why?

75 billion of imports that are 25% more expensive than 5 years ago. Hardly peanuts.

750 billion of economic stimulus. It remains to be seen in what form this takes....
Agreed
Whose sock are you?
 
75 billion of imports that are 25% more expensive than 5 years ago. Hardly peanuts.
right so 75 Billion are 1/4 more expensive than 5 years ago. This is a massive surprise, it tends to coincide with the inflation rate over the five years, so that's 17.5 Billion over five years so a smidgen over 3 Billion a year more than it was 5 years ago. This presupposes that the deficit was then 57.5 Billion. Now 4 years ago we started Brexit which was supposed to bankrupt us all and here we are. In comparison we offered 127 Billion during the Banking crisis and underpinned it with another 500 Billion. In total we laid out ( but didn't Spend) 627 Billion 12 years ago. The EU 27 countries are trying to find 750 Billion Euros. In relative terms what you're talking about is peanuts- certainly not on a personal level. I was presuming you understood what I meant when I mentioned Gold as a hedge.
 

Wordsmith

LE
Book Reviewer
If you believe the EUR to be terminally weak, why is the GBP doing so poorly against it?
The pound fell in value as a result of the referendum result, and stabilised after it. The jury is in effect out after the decision to Brexit, and the value of the pound will go up (or down) depending on how well UK PLC copes after our exit from the EU. The first true indication we will have of the long term value of the pound is the direction of travel a year or two after Brexit.
Do you expect the EUR to collapse, with GBP reasserting itself relative to EUR and thus make our holidays and EU imports cheaper at some date very soon?
I think the euro is going to be in deep trouble very soon due to the Covid 19 induced recession. The Club Med countries are going to be worse hit than northern Europe - and Italy is on the same debt trajectory that led to Greece, et al being bailed out last time around. Only Italy is 'too big to fail' - which is going to cause the euro massive problems.
I'm not sure what point you are trying to make with regards to the EUR and how post-brexit Britain can capitalise on this considering our close trading relationship with the EU behemoth
The close trading relationship is because we're locked into the single market - and EU rules prevented UK PLC signing its own Free Trade Agreements with counties outside of the EU.

In addition, the EU is hardly a behemoth - as I've pointed out before, it's share of world trade has fallen from 30% in the 1980's to 15% now. The US and Commonwealth combined are over 40% of world trade - a much larger market, now we're free to sign our own FTA's next year.

Finally, the EU (whose law we were obliged to follow) is one of the most taxed and regulated areas in the world - and it's been steadily losing its market share to less taxed/less regulated countries. The UK now has the opportunity to reduce its taxes and regulations and regain some of the competitiveness we lost while in the EU.

Wordsmith
 
D

Deleted 72187

Guest
The pound fell in value as a result of the referendum result, and stabilised after it. The jury is in effect out after the decision to Brexit, and the value of the pound will go up (or down) depending on how well UK PLC copes after our exit from the EU. The first true indication we will have of the long term value of the pound is the direction of travel a year or two after Brexit.


I think the euro is going to be in deep trouble very soon due to the Covid 19 induced recession. The Club Med countries are going to be worse hit than northern Europe - and Italy is on the same debt trajectory that led to Greece, et al being bailed out last time around. Only Italy is 'too big to fail' - which is going to cause the euro massive problems.


The close trading relationship is because we're locked into the single market - and EU rules prevented UK PLC signing its own Free Trade Agreements with counties outside of the EU.

In addition, the EU is hardly a behemoth - as I've pointed out before, it's share of world trade has fallen from 30% in the 1980's to 15% now. The US and Commonwealth combined are over 40% of world trade - a much larger market, now we're free to sign our own FTA's next year.

Finally, the EU (whose law we were obliged to follow) is one of the most taxed and regulated areas in the world - and it's been steadily losing its market share to less taxed/less regulated countries. The UK now has the opportunity to reduce its taxes and regulations and regain some of the competitiveness we lost while in the EU.

Wordsmith
Once again returning to the strength of GBP, what do you make of the assessment of the BoA that GBP is regressing to an unstable currency with the characteristic of an emerging market like Mexico?


BoA, however, adopts a longer-term perspective and considers that there are longer-term structural factors at play.

It has looked at transactions volumes and liquidity estimates from the triennial BIS FX market survey.

“Using turnover statistics from the BIS Triennial Survey alone, one would conclude that the depth of the GBP market should have provided some cover against volatile market moves. This has not been the case and, in our view, Brexit is likely to permanently alter the way in which investors view the pound."

"In summary, we believe GBP is in the process of evolving into a currency that resembles the underlying reality of the British economy: small and shrinking with a growing dual deficit problem similar to more liquid EM currencies.
 
Once again returning to the strength of GBP, what do you make of the assessment of the BoA that GBP is regressing to an unstable currency with the characteristic of an emerging market like Mexico?


BoA, however, adopts a longer-term perspective and considers that there are longer-term structural factors at play.

It has looked at transactions volumes and liquidity estimates from the triennial BIS FX market survey.

“Using turnover statistics from the BIS Triennial Survey alone, one would conclude that the depth of the GBP market should have provided some cover against volatile market moves. This has not been the case and, in our view, Brexit is likely to permanently alter the way in which investors view the pound."

"In summary, we believe GBP is in the process of evolving into a currency that resembles the underlying reality of the British economy: small and shrinking with a growing dual deficit problem similar to more liquid EM currencies.
Oops. Missed out the conclusion; allow me...

US Dollar also at risk
BoA concludes; “We remain defensive on the pound but to avoid USD exposure we believe investors should focus their attention on a lower GBP versus EUR, JPY and CHF."

The bank is, therefore, also negative on the US dollar even with the potential for defensive inflows if risk appetite deteriorates.

This implies that BoA has adopted a negative stance towards US dollar fundamentals with a particular focus on the budget and current account deficits.
That 3rd SPOTY beckons...
 

Matelot Spy

Clanker
Not enticing us away from paper money into precious metals, the very thought.
No not really, but Gold is at a near 30 year high and China and Russia are stockpiling it.

I myself have a number of US treasury bonds in my portfolio.

gold_30_year_o_usd_x.png


It just gives you food for thought in what Alasdair Macleod is saying. He may or may not be correct.
 
A spaff-gargling no mark is, I believe, the phrase that you were looking for.
Oddly, it wasn't.

There isn't much point in applying creativity to insult someone who took over two years to realise being labelled "Site Penis of the Year" actually does affect how people react to your posts.

Even normal insults are not going to register with him until 2022.
 
Oh dear; how sad, too bad.

'Cornwall Council has renewed its call for the government to provide £700m in funding to fill the gap left by EU funding post-Brexit.

'The figure would cover the loss the region will suffer over the next ten years due to the impact of leaving the European Union. Cornwall was granted Objective One status by the EU in 1999, meaning it was eligible for funding as one of the poorest regions in Europe.'


 
D

Deleted 72187

Guest
Oh dear; how sad, too bad.

'Cornwall Council has renewed its call for the government to provide £700m in funding to fill the gap left by EU funding post-Brexit.

'The figure would cover the loss the region will suffer over the next ten years due to the impact of leaving the European Union. Cornwall was granted Objective One status by the EU in 1999, meaning it was eligible for funding as one of the poorest regions in Europe.'


That's nothing.

The area of Edgbaston is apparently going to lose some 18% of of public loacal funds per anum over the duration of this parliament. Having recently purchased a 2 bed in this area its a bloody annoyance
 

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