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Euro v £ at parity


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Likewise those people who ALBF despises and who bought their houses in enclaves or in remote rural location will be rubbing their hands and saying how their property has increased in value by nearly one quarter since the brexit vote was announced.
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Oh but they have (at least in the minds of those who worry/exude about such things).

Whatever it was worth back in June (whether real or in the imagination) it will realise just about 25% more in pounds today than would have done back then. And the Euro value - the true value to you and me - will not have moved one centime.
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[quote user="mint"]Paul, the politicians, Mark Carney, the business world all know that Brexit means  a weaker pound.  So, nothing really new to digest as such.

Might just have to learn to live with it.



You have been reading too many idiot journalists!

The present Pound - Euro exchange rate, is simply a prototypical speculation on Forex markets; mainly since ALL economic and financial metrics are indicative of a reverse reality.


Core Eurostate unemployment is almost DOUBLE UK's figures: (EU - 9.6%: UK 5.4%):

Youth Unemployment: See Here:

Italy: Most banks are on the edge of insolvency. The state has failed to collect in excess of One Year's Tax Revenues!

Germany: Deutsche Bank (the largest German Bank) is in serious liquidity troubles and its stock value has more than halved. Merkel refuses utterly to bail it out.

EU States: GDP versus Debt. See here:

Even the mighty Germany's Government Debt is now approaching Britain's!

Furthermore, the cost of Merkel's folly de grandeur over allowing 1 million migrants is backfiring, badly and rapidly.

Germany will spend in excess of $100 billion in associated migrant costs; as a very conservative estimate. Which translates into ever higher taxes on log suffering German taxpayers and a big hike in Sovereign Debt (Government borrowing).

As posted earlier, one of the primary architects of the Euro now admits its core problems and flaws.

However, this is an excellent further analysis of Otmar Issing's statement.

See here:

Despite Project Fear, the twin cheer leaders being Dave and Gideon ( Twee Georgie), the ensuing metrics went directly opposing, their, Carney's, the OECD and IMF forecasts of doom and collapse of the UK economy! FTSE went up to new highs; Inwards Investment continued, even a major FRENCH bank - Soc Gen, will invest in Britain! See here.

See here:

The IMF, not ably led by the tangerine-faced French lawyer (what the hell does she actually know about finance and banking?) Christine Lagarde, emerges very badly indeed in the whole financial meltdown and particularly concerning the Euro mechanism.

See here:

In its founding charter, from the Bretton Woods, new Jersey, conference in 1944, the IMF had a core tenet of destroying currency speculation, by IMF coordinating a defence against currency speculation by joining central banks together to jointly attack speculators, through the mechanism of hoovering up massive tranches of attacked currency and dumping on the market in order the speculators "lost their shirts".

Of recent, this, they have singularly failed to do.

It is yet another exemplar of why the IMF is no longer fit for purpose.

Thus, do not frettle pettles!

The forex (foreign exchange) markets will son settle and the Pound-Euro recover to sensible exchange level territory.

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[quote user="mint"][quote user="woolybanana"]But, surely, the Scotch will benefit.[/quote]

the sticky tape or the whisky?[8-)]


Oh I love this, Mint!

As a Scots friend instructed me at Grammar School - all those dim distant years ago, sigh [:(] -

"Scotch is Whisky. People are Scottish or Scots!"

P.S. 3M had not at that archaic time invented the clear adhesive tape!

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Always amuses me, some of the countries with large debts giving money to those with small debts. Perhaps Gluey you could explain why that is sensible. Most financial advice I have read is that if you have the money pay off your debts.
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[quote user="woolybanana"]Gluey, you last message but one; please rewrite the first (four line) paragraph in words that the average Brexit supporter can stand - and Norman.

Remember that most of us here are old and sozzled and generally don;t understand some of your lovely sounding words!!![/quote]

OK Old Yellow long curved one.

I believe you mean this one?

[quote]The present Pound - Euro exchange rate, is simply a prototypical speculation on Forex markets; mainly since ALL economic and financial metrics are indicative of a reverse reality.[/quote]

Speculators: these are now huge banks and financial institutions who each day trade vast chunks of currencies at small profits using computer buy-sell systems.

The origins of the Foreign Exchange Market were where genuine importers and exporters needed to exchange a foreign currency in payment for goods they had sold as exports or needed to pay for imports. In other words a genuine exchange of value.

Today, the majority of exchange trades are by gamblers, who then screw up the real honest true value equation: plus, of course, the major banks who have been found guilty of rigging the market.

See Here:

"All economic metrics": metrics in this sense are the various items used as measurement by economists and analysts to assess risk and the forecast probability.

The main risk exposure in forex gambling or forex investment are loss of capital value, when the capital is changed back into the investor's home currency.

At times, for example, interest rates can be higher in a foreign currency, than one's own and it can be profitable to change say Pounds into Dollars and gain a higher rate of return. A capital loss can clearly wipe out all interest earnings and more.

"Indicative of a reverse reality". The driving down of Sterling against the Euro flies in the face of all economic indicators; i.e. employment, GDP, national debts of Eurozone states etc.

Clear now?

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[quote user="PaulT"]Always amuses me, some of the countries with large debts giving money to those with small debts. Perhaps Gluey you could explain why that is sensible. Most financial advice I have read is that if you have the money pay off your debts.[/quote]

It is far from sensible, Paul. Point of fact it is insanity!

The sheer desperation of the ECB and Draghi is well illustrated by the ECB's hoovering up bundles of junk debt instruments (bonds). See Here:

Core problem, today, with the Western World is debt. Governments, politicians and people, have become addicted to debt, readily provided by banks which themselves are on the edge of insolvency.

It has become a case of follow my leader; banks have themselves been creating fresh new money like fun. This is called Credit Money Creation; which has been uncontrolled by central banks.

Now the core problem with Fiat Money ( Money which has no real intrinsic value and the backing of, e.g. bullion) is this falls outside of the ambit of central bank controls. A primary and critical function of central banks is to carefully monitor money supply against GDP. When money supply outstrips GDP (expressed as real value related production, such as work supplied, goods created and sold etc), then real i.e. "Monetary Inflation" follows, inevitably.

Commercial banks today, instead of taking in capital to lend on, source their main financing from the now global Interbank Money Markets, on a day-by-day basis. This allows banks to grow at dizzying rate. All is fine until one fine day, they are unable to roll-over the debt with fresh lending. Which is precisely what happened to the American bank Continental Illinois in the 1980s. Luckily, the Federal Reserve were able to prevent the contagion spreading.

See here:

See Here:

Paul Volcker, the head of the Federal Reserve warned that the Ultimate Domino Effect was bound to happen  sooner or later. This is when lenders refuse to continue to refresh debt and demand repayment in full. This process can spread rapidly and major banks collapse, insolvent, one after the other.

It nearly happened in 2007/08 over the sub prime debacle: it could soon happen again with the ECB...

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