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The plan to bounce us into the Euro gathers pace!
Comments
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opinions4u wrote: »But the markets would notice.
Remember the success of the Exchange Rate Mechanism?
Mmmm ... worked a treat!
But the pound wouldn't be on the markets because the pound wouldn't exist any more, except as a rather odd denomination of Euro cash (although the way things have been going lately, maybe not so odd...).Je suis Charlie.0 -
It was strong in the sense of stable. They did this by tending to keep it on the low side, so the markets were always trying to push it up. They kept it down by keeping interest rates low, which had great benefit for industry, leading to an economy which avoided recession, giving the perception of strength in the currency, based on a sound economy. It was always a good place to keep cash, because they never let the currency go too high and hence there was little risk of a currency crash. Compare with Sterling.the Germans kept the DM strong for decades
After the uprising of the 17th June The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee Stating that the people
Had forfeited the confidence of the government And could win it back only
By redoubled efforts. Would it not be easier In that case for the government
To dissolve the people
And elect another?0 -
Exactly the point. The UK decided to enter unilaterally, without agreement from the other partners. And of course we were doing our old trick of letting Sterling go too high. Of course, the speculators saw the weakness and set out to break the ERM to make a profit. Didn't they do well? I don't blame the speculators, I blame our own government, doing the usual trick of overvaluing sterling. This was not an ERM problem, it was just another example of Sterling being mismanaged.opinions4u wrote: »But the markets would notice.
Remember the success of the Exchange Rate Mechanism?
Mmmm ... worked a treat!After the uprising of the 17th June The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee Stating that the people
Had forfeited the confidence of the government And could win it back only
By redoubled efforts. Would it not be easier In that case for the government
To dissolve the people
And elect another?0 -
the DM was one of the strongest currencies in the world. For decades after the hyper-inflation in Germany in the 1920's, Germans were fearful of inflation, and the Bundesank kept the DM on the high side to prevent inflation returning0
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Which only demonstrates something if you think that the dollar is a totally stable currency. Most of what was happening there was the dollar losing value.After the uprising of the 17th June The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee Stating that the people
Had forfeited the confidence of the government And could win it back only
By redoubled efforts. Would it not be easier In that case for the government
To dissolve the people
And elect another?0 -
A strong currency is not a highly valued currency. Strength is based on being able to rely on its value. The Germans always achieved this with the DM by regulating the currency down and letting the markets push it up. Consistently.the DM was one of the strongest currencies in the world. For decades after the hyper-inflation in Germany in the 1920's, Germans were fearful of inflation, and the Bundesank kept the DM on the high side to prevent inflation returning
In the UK, we have tended to regulate sterling up and register total surprise when markets disagree and regulate it down. Interspersed with periods of applying the German model, which exacerbates the problem.After the uprising of the 17th June The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee Stating that the people
Had forfeited the confidence of the government And could win it back only
By redoubled efforts. Would it not be easier In that case for the government
To dissolve the people
And elect another?0 -
DM v French Franc
http://fx.sauder.ubc.ca/cgi/fxplot?b=DEM&c=FRF&rd=*&fd=1&fm=1&fy=1971&ld=31&lm=12&ly=2008&y=daily&q=volume&f=png&a=lin&m=0&x=
and is a similar pattern against £ - the DM was trending upwards against FF, $ and £ for decades - ie a strong currency whose value you could rely on0 -
The biggest currencies are the most stable. The one's not so affected by an extra several billion moving here or there because it's only a fraction of the trade that takes place in them daily.
Sterling as a relatively small currency is vulnerable.
Not true and the bigger they come, the harder they fall.0
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