Inflation, Inflation, Inflation...

wotsthat

CLAPTON wrote: »

rubbish
I have posted dozens of posts pre brexit about the current a/c deficit, about the increasing dividend outflows abroad, about the sale of UK assets and about the rise of borrowing.

You've pointedly asked people what they think the correct value of sterling is. The implication is the value of sterling is always correct. Yet here you are backing up someone who is doing the same thing - the only difference is they're confirming YOUR bias so that's OK.

CLAPTON wrote: »

of course that was before many 'remainers' redefined economics into 'good' economics that somehow showed the EU is a good light (and showed hard to the UK) and 'jewish' economics that was is in the text books

!!!!!!?

CLAPTON

wotsthat wrote: »

You've pointedly asked people what they think the correct value of sterling is. The implication is the value of sterling is always correct. Yet here you are backing up someone who is doing the same thing - the only difference is they're confirming YOUR bias so that's OK.

the implication is that there isn't really a 'correct' value but one based large currrent a/c deficit, on heavy borrowing, selling assets, accelerating future outflows of profits/dividends is unlikely to be stable in the future.
Which way the rate will go is likely to depends whether you believe in 'jewish ' science or 'Lysenko's'

wotsthat

CLAPTON wrote: »

the implication is that there isn't really a 'correct' value but one based large currrent a/c deficit, on heavy borrowing, selling assets, accelerating future outflows of profits/dividends is unlikely to be stable in the future.
Which way the rate will go is likely to depends whether you believe in 'jewish ' science or 'Lysenko's'

How can you be sure sterling wasn't already valued to correct current a/c deficit, borrowing etc. and the post Brexit vote plummet was a recognition that an economically damaging decision was made?

Maybe you're correct or maybe you're just using the fall in sterling to confirm your 'belief' system. Bit of both I'd suggest.

CLAPTON

wotsthat wrote: »

How can you be sure sterling wasn't already valued to correct current a/c deficit, borrowing etc. and the post Brexit vote plummet was a recognition that an economically damaging decision was made?

Maybe you're correct or maybe you're just using the fall in sterling to confirm your 'belief' system. Bit of both I'd suggest.

my 'belief' system is based on fairly standard economic theory that predates brexit: its found in all economic text books

I posted numerous times prior to brexit and sterling fall warning about the current a/c deficit.
I fully accept that brexit was the straw that precipitated the fall, but the underlying cause was our large current a/c deficit and the consequences already outlined.

michaels

Portfolio theory would suggest that a currency will trade at a level at which the risk adjusted expected returns in a base currency (usd) are equal regardless of where an investment is made.

For example the Brexit vote resulted in a change in expectations on UK interest rates (lower for longer) thus a USD investor would need to expect GBP to appreciate against the dollar in future in order to address lower expected govrt bond yields compared to the US which led to a step adjustment in GBP.

EG if UK bond yields are predicted to be 1% below US yields for the next 5 years and then the same the expectation is that the exchange rate now will fall to a level where it is expected to appreciate by 5% over the same period thus eqalising returns from holding either currency.

michaels

I notice uk gilt yields are rising quickly. If you haven't locked into that cheap mortgage fix it would appear that now would be the moment to do so.

Of course longer gilt yields reflect market expectations for future interest rates and one reason for expecting higher interest rates is the expectation of higher inflation....

HAMISH_MCTAVISH

Apple has increased the prices of its laptop and desktop computers in the UK by hundreds of pounds. One analyst said consumers should expect further price increases. "Apple has to recalibrate prices after significant currency fluctuations, and since the EU referendum, UK prices are out of sync with the dollar," said Patrick O'Brien, analyst at the Verdict Retail consultancy.

"Apple has taken the hit up until now. While price increases won't look good to the consumer, it's difficult to blame Apple. "Once you strip out UK sales tax (VAT) and the currency conversion, the new UK prices could still be viewed as fair."

http://www.bbc.co.uk/news/technology-37799235

Apple isn't the first - and won't be the last.

People will pay for collectively voting Brexit - hundreds of pounds more per computer in this case.

chucknorris

HAMISH_MCTAVISH wrote: »

http://www.bbc.co.uk/news/technology-37799235

Apple isn't the first - and won't be the last.

People will pay for collectively voting Brexit - hundreds of pounds more per computer in this case.

Really doesn't matter to me Hamish, if I have to pay say an extra £5k per annum to have what I already had, I won't miss it, but just maybe some of those that voted Brexit will? Not my problem though, I voted remain anyway, so they can't blame me.

My main concern was London house prices, but I have now pulled the trigger, I'm starting to sell, so I'm hoping I won't take too much of a hit, it doesn't look like I will so far, but time will tell.

Thrugelmir

wotsthat wrote: »

How can you be sure sterling wasn't already valued to correct current a/c deficit, borrowing etc. and the post Brexit vote plummet was a recognition that an economically damaging decision was made?

How does the market know "an economically damaging decision was made". At the moment nothing has materially changed. Markets move as much on sentiment as fact. As are looking into the future. The UK's issues have been bubbling under for a while. Any trigger could have caused the same shift. Just happened to be the vote.

sabretoothtigger

A sentiment speculatively damaging decision was made. How much of an economy depends on ideas and feelings or more on actions and worth to the labour of the people is going to be interesting to see.
We leave EU, a political agreement and remain in europe and probably always will.
I could understand the fuss more if we shared the Euro but we already disagreed with alot of the EU fiscal direction and so its not that different, it'll probably be a slower departure then most fear. The biggest change right now is we are not proceeding with the EU, its ages till we leave or anything different is in actual play.

Continental tectonic drift is slow we wont be mid atlantic for a while yet