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baypond

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Posts posted by baypond

  1. The problem for the Euro is that it is seen as an alternative reserve currency to the (weak) dollar. China has reserves now of over $2.2 trillion (built up to keep the CNY weaker than it would be). For China to keep reserves just in the dollar when the USA economy is in long term decline could be suicide financially, so they diversify, as do all China's trade partners.

    Here is the current cycle (and it is probably here to stay while China supports the world economy by importing massive ammounts of commodities):

    China buys commodities and at the same time has a massive trade surplus by utilising the cheap labour force to produce cheap good for re-export. Because of their trade surplus, they buy USD/CNY and then convert a significant portion in to Euros (by selling dollars). At the same time, all those exporters to China (Asia, Brazil etc) buy massive amounts of dollars against their own currencies to prevent their currencies from appreciating too far and causing competetive issues vis-a-vis their competitors. All these central banks are currently diversifying out of just dollars to Euros (along with some GBP,AUD etc). This means that while China continue to import, their partners will earn dollars, which they sell. The central banks buy these surplus dollars to protect their export economies, and buy EUROs to diversify. This vicious circle of EURO buying will not dimish until China stop importing, or to put it another way, EURO will continue to appreciate while the dollar is intrinsically weak.

    Simple isn't it.

  2. It always seems a shame to me that we on the forum spends so much time on the minutae of laws, taxes, insurance and rules of living in France, but very little advice is given on the dramatic changes in lifestyle that can result from living in France with earnings/assets in the UK. The simple fact is that no one can easily judge the long term path of exchange rates. If you intend to live in a country for 20 years, then look at a 20 year chart of EUR/GBP (GBP/DEM) and you will see that in any 20 year period you could have some very bad years and some very good years. And life is such that we will only hear when GBP weakens because most people either earn Euros (so we hear nothing) or earn in GBP in which case it is a disaster.

  3. [quote user="AnOther"]The problem is that there is a significant chance of inflation taking off and the only weapon to combat that in the UK's 'one trick pony' of an economy is the interest rate.

    But bring it on I say. I want a swift return to the double digit interest rates of 1989-92 to enhance my annuity prospects.

    [/quote]

    This thing about inflation and annuity prospects is a zero sum game isn't it? My understanding (which may be out of date) is that you can buy a flat annuity, or an inflation linked annuity.

    In a high inflation economy, it costs a massive amount to inflation link the annuity, and very much less to buy a non-inflation linked annuity. The problem is that if you do not inflation link with say inflation at 10%, within 5 years your monthly pension payments will be worth 50% less. In a low inflation world it is very cheap to buy an annuity that is inflation linked. So all in all it makes no difference to the REAL value of a pension.

  4. [quote user="frexpt"] The £ -> € exchange rate offered by the Portuguese bank on the eventual conversion will be preferential [/quote]

    Call me old fashioned, but how do you know? Does the eventual rate include commision or do they take a transfer fee?

  5. [quote user="P-D de Rouffignac"]

     

    But as others suggested, all this might be hard to contest and take time, money and aggravation. [/quote]

    We hear it time and time again. People rave about French law when buying homes, but the fact is that to rely on the courts to enforce law often seems almost impossible because of time, cost and where the sympathy of the courts lie.

  6. Proportionate representation doesn't work. It is ineffective and usually passes power intermittently to small parties that carry the balance of the seats.

    I think all politicians should have a pinocchio nose transplant, so that we can see when they are telling porky pies.

  7. [quote user="Quillan"]

    Pass legislation to make it illegal for the government to lend money to banks etc.

    [/quote]

    I think you will find banks lend far more to Government than the other way round!. Far better to say the Govt has to repay debt during boom times, so they can afford to borrow during bust.

    Revert back to the old opening times for pubs and clubs. Ban any alcoholic drink that has artificial colourings, thereby reducing the attractiveness of florescent alco pops. Reduce the sugar content of alco pops to make them less palatable for the young.

  8. [quote user="Owens88"]quote user="Quillan" Why should they be allowed to walk away after all the damage they have done. end quote

    I love the principle.

    Could we insist that the bankers who gambled using other people's money(while getting paid rather princely amounts themselves) stayed on (at a moderate remuneration) until they fixed things, then be shipped off to an island somewhere where they can indulge in mutual congratulation.

    I speak as a tax payer, a defrauded shareholder and a weary citizen feeling that as long as cronies are allowed to play games amongst themselves using my money then any personal endeavours are almost invalidated.[/quote]

    I speak as a banker, and trader in fact. I think that just as in football crowd trouble, the misbehaviour of a few, spoils the reputation of everyone. The cause and effect in banking is complicated, but essentially boils down to government not regulating banking properly (ie permitting self certification, 120% mortgages, 8xmultiples of earnings etc). The unfortunate fact in a competetive world, where banks were judged on their ability to make money, is that they ended up chasing lower and lower margins in more and more imaginitive (stupid) way, just to try and stay in the game. Unfortunately for governments, they havn't worked out that they have publicly listed banks that are an integral part of the financial wellbeing of an economy. If they want to create an industry that is non-competetive, which removes the salary pressures, then they need a nationalised bank responsible for all mortgage lending etc. But they can't do this because UK plc relies too heavily on the financial industry for taxes and growth. Chicken and egg.

    Governments and politicians have cleverly absolved themselves of all blame and placed it squarely and entirely on banks, when it should have been shared.

    The biggest political con of all is that the amount of money injected in to UK banks, is almost entirely due to their investments abroad, not the UK. This means that the UK taxpayer is in fact heavily bailing out the US and European taxpayer. Now that is something you don't read in the papers, because politicians can't admit it.

    Competition creates efficencies, but it also can encourage bad decision making and create a vicious circle of higher and higher salaries. Take a look at the cheating in sport recently, Briatore, Alonso going to Ferrari for $35 mio per year, Harlequins and bloodgate etc etc The £150,000 per week paid to footballers. The bad thing for government is that you can't have an economy without banks, but banks are companies that compete. That is the problem,

  9. Just think if Gordo hadn't sold the national gold reserves at multi decade lows, the country would be a few extra billion to the good. Just another great decision by the man who banished boom and bust.

    The man is delluded, but then most politicians seem to be.

    By the way - great announcement by Darling about bonuses. Everything he mentioned had already been put in place before or since the credit crisis......talk about pulling the wool over voters eyes, it is politics at it's very worst.

  10. We seemed to have an explosion of them this year. At any one time I think we could have walked round the patio and immediate area and seen maybe 40 or 50. They loved hunting around the lights, but also loved the tap that the hose was attached to where there was plenty of cover and moisture. They hibernate in the double glazed doors in the gully that runs between the top of the door and the frame.

  11. [IMG]http://i968.photobucket.com/albums/ae170/gilespage/DSC_0164.jpg[/IMG]

    [IMG]http://i968.photobucket.com/albums/ae170/gilespage/DSC_0462.jpg[/IMG]

    Chris, are they both stripeless? The stripe on the common tree frog seems to extend further down the body than both these two, although one certainly seems to have something. I have some video capture which I am sure shows some of the frogs with stripes extending down the whole body. The pictures were taken almost 2 years apart (top one in 2007).

  12. We are not empty nesters, with the older two being 21 and the younger two being 12 and 10. So maybe we will feel very vulnerable as the last of them leaves. However, we do feel that children need to go off and set up a life of their own. Our children have been very lucky with holidays and cars and every latest gadget. For the older ones it wasn't the best preparation for life with out our umbilical cord. However, we have always been extremely honest and told them that when education is done, that we will not support them financially.

    Last year my son opted out of university after the second year. We had a long chat before he took the final decision, and I explained that there would be no financial support, and he needed to find his own way. Of course there is a bed at home if he gets stuck, but he wanted to stay in his uni town. That was a year ago. This week we were talking on the phone and he actually thanked me for doing what we did. He says he now understands the real value of money, and the value of having a job and working hard. It was incredibly tough following through on our promise, but I feel very proud that he has now worked things out for himself. We are now going through the same process with our 21 year old daughter who is at home, but preparing to move in to with a friend at christmas. We cut her money too, and she didn't hang around long before getting a full time job. Afterall she now has car insurance, night clubbing etc to pay for.

    Personally I think we make it too easy for children to stay at home. They need to be kicked out sometimes - as nature intended!

  13. [quote user="Rob G"]So the question remains – in terms of forecasting what is going to happen to the £/€ rate, if we are going to need to convert quite a lot of € to £ in December, should we book a rate now, wait a while or not book one at all?

    (I realise this is purely a matter of subjective opinion, but I'd be very interested in the view of those who undoubtedly have a more informed view of likely currency fluctuations than I do.)

    Thanks,

    Rob

    [/quote]

    I know this sounds really really crass, but I am not allowed to comment or make any forecast or recommendation about currencies without posting a full disclaimer about it not being a recommmendation blah blah blah.

    Personally, I try to buy/sell at the time i make the purchase/sale decision. Because it is at this time that you have worked out affordability. I have worked in foreign exchange for more years than i care to admit, and broadly speaking, long term forecasting is a bit of a lottery, hence the reason most get it wrong!

    Giles

  14. [quote user="dragonrouge"]Hi baypond I now understand so a forward fix is simply a arithmetical process as to the differential be it positive or negative x 90 days forward or whatever that may be.

    I think I have it (perhaps) but certainly you undoubtedly know what it is all about.

    regards and sincere thanks[/quote]

    That is correct. It is purely arithmetical. Don't let any broker tell you otherwise. Currently GBP and EUR rates are almost exactly the same, hence no adjustment for periods up to about 6mths. After that you get some divergence of interest rates.

    Giles

  15. Hi draginrouge

    The biggest mistake journalists make is that they believe a future price for a currency pair, such as GBP/EUR is some kind of guess about where that currency pair will trade in the future. The fact is that GBP/EUR for delivery today vs a GBP/EUR transaction for delivery in the future is purely a function of GBP/EUR for delivery today +/- the interest differential between the currencies x the number of days. It has absolutely nothing to do with forecasting.

    The FT frequently gets this basic fact wrong.

    Giles

  16. If you need to have one issued (depends on age of car) get your certificate of conformity while the car is still in the UK. I waited until the car was in France, and had to bring all the documents back to a Renault garage in the UK. You can get them in France, but in the UK its easier to understand being all in English, plus the fact that you have to provide utility bills etc for where you are resident, and Renault UK didn't charge me!
  17. [quote user="AnOther"]If you spot this MG it's my friend and the car is fresh from a complete rebuild in UK after having written off in the Rally of Tunis about 3 years ago.

    [IMG]http://i127.photobucket.com/albums/p123/biskitboyo/MG-1.jpg[/IMG]
    [/quote]

    Beautiful car - which one was it? A friend of mine has a K3 replica (contemporary). I can't get enough of the smell of castrol R. Reminds me of my childhood watching the cars a Brands Hatch.

  18. [quote user="dragonrouge"]It would be an interesting exercise given the current rate of exchange to see what fx guys are quoting for a December fix![/quote]

    At current interest rate differentials, there is really no difference between spot (current) and forward rates. Certainly not one you should really notice. If they charge you for a forward price (apart from margin perhaps) then they shouldn't.

     

  19. It is a shame when more outspoken forum members dissappear. It dilutes the content. Why is it that the more outspoken people tend to leave in a huff though? They make comments because they want to have their argument heard, or to get a reaction, and then seem to be surprised when people come back at them. Usually the most outspoken people I have met in life, enjoy the controversy of making what most would consider an outlandish statement.

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