If we vote for Brexit what happens

mwpt

CLAPTON wrote: »

But how is the treatment of Greece 'progressive?

I'm going to continue to fight this meme whenever I see it and can be bothered.

Greece has primarily herself to blame for her situation. At all points she had choices to make and made them.

My great uncle's cousin in law's friend's father's nephew owed a mortgage and personal loans to several banks. He spent money in the good times and lived well because of it. But it wasn't real wealth and suddenly his job situation changed and he couldn't meet his debt repayments. The family loaned him money to "help out" with his situation, which went towards meeting his debt obligations to those banks. But this was a bit silly because he still didn't have a solid job and ended up owing both the banks and the family, and still could not meet these obligations.

In the end he did the right thing and declared bankruptcy and took the pain that was coming from his choices. It worked out best for everyone in the long run.

CLAPTON

Generali wrote: »

Traditionally economists think of a fall in the currency as looking like a J on its side: the trade deficit increases for a while as import prices increase and export prices fall. Then, in time, the change in prices is reflected in substitutions being found for imports and more exports being sold.

There is a ton of research to back up that view however, from memory, the research also says that the effect tends to be sort lived and in time countries end up at the status quo ante.

Regarding any post-Brexit trade, the big target for the Eurozone would be finance. Financial services is a huge earner both for the domestic economy and internationally. The trade surplus in financial services is north of £50,000,000,000 IIRC and a huge proportion of that trade will be to European countries. London is a world centre in a couple of services, notably FX, but is the European centre in almost all markets.

why do export prices decrease?
surely they are usually specified in foreign currency (i.e. local to the recipient) so there is no change from the buyers point of view : the result is, for equal volume of sales, the receipts in GBP are higher.
This does allow the prices to fall if the seller so desires to increase sales but that is not necessary to maintain equal volume of sales
Imports on the other hand become more expense in terms of GBPs and so encourage substitution.

michaels

CLAPTON wrote: »

why do export prices decrease?
surely they are usually specified in foreign currency (i.e. local to the recipient) so there is no change from the buyers point of view : the result is, for equal volume of sales, the receipts in GBP are higher.
This does allow the prices to fall if the seller so desires to increase sales but that is not necessary to maintain equal volume of sales
Imports on the other hand become more expense in terms of GBPs and so encourage substitution.

So UK exports are fixed in the currency of the market they are imported to but UK imports are fixed in the currency of the country they are exported from...doesn't make a whole lot of sense to me.

setmefree2

Moby wrote: »

I'm not confused or bitter. I'm clear in what I say and in what I believe. I dont believe Cameron is promoting UK interests. I believe his policy is motivated by the need to deal with internal tory divisions. He is both alienating other heads of state by doing this and actually damaging UK interests in the process and thats why I am angry. Many people have this view it doesn't make me bitter.

You're in denial.

This isn't about The Tories. You just don't seem to be able to get your head around the fact that a lot of people don't like the EU free movement of labour policy and the loss of sovereignty that also comes with membership.

I will vote Remain but I do believe it's time to let people have their say.

antrobus

CLAPTON wrote: »

why do export prices decrease?....

Because the exporters can cut them. Unless an exporter has a monopoly, or there is a cartel in operation, competition will tend to produce that result.

CLAPTON wrote: »

...surely they are usually specified in foreign currency (i.e. local to the recipient) so there is no change from the buyers point of view : the result is, for equal volume of sales, the receipts in GBP are higher..

By the same argument, the cost in GBP of imports will be higher. And since you started off with a deficit, imports are more than exports, the deficit will get bigger.

CLAPTON wrote: »

...This does allow the prices to fall if the seller so desires to increase sales but that is not necessary to maintain equal volume of sales Imports on the other hand become more expense in terms of GBPs and so encourage substitution.

Depends on the elasticity of demand.

mwpt

setmefree2 wrote: »

You're in denial.

Moby is doing what Labour and their supporters have being doing since before GE2015, and attacking the Tories on some misguided notion of "vileness". It may stir some people to hatred and therefore more likely to vote against the Tories, but it's not real policy to get people to vote for Labour. They should instead focus on being the better party through active politics rather than the reactive politics of stirring hate.

antrobus

michaels wrote: »

So UK exports are fixed in the currency of the market they are imported to but UK imports are fixed in the currency of the country they are exported from...doesn't make a whole lot of sense to me.

Not a lot, no.

In any case, if you are playing that game, it doesn't really matter all that much whether the contract is priced in your currency, or their currency, or some other currency altogether like USD, you have all sorts of FX derivatives available that enable you to reprice the contract into any currency that you fancy.

setmefree2

Moby wrote: »

Who else is delighted that the future of the UK has become a plaything for the political careers of a handful of jostling Tories?

I think that it very disingenuous to the many normal people in this country who are worried about a loss of sovereignty or too much immigration- they do have a point you know?

As I say, I will vote Remain, as I believe the economic damage to UK economy of leaving will be substantial. Also I don't have any problem living with other Europeans - I honestly can't understand what all the fuss is about - however, I accept that other people do have a problem with this.

I do believe that this debate goes much further than Conservative Party politics and that there are some genuinely upset people about, though as I say I don't actually feel like that myself.

antrobus

Moby wrote: »

....I believe his policy is motivated by the need to deal with internal tory divisions. ....

I call it 'doing a Wilson'.

CLAPTON

michaels wrote: »

So UK exports are fixed in the currency of the market they are imported to but UK imports are fixed in the currency of the country they are exported from...doesn't make a whole lot of sense to me.

yes I didn't say that very well
the export price in the local market can remain unchanged and the UK exporter increase profits and/or the UK export can reduce local prices to try to increase sales and still make higher profits

with imports the situation from a UK point of view is that the foreign exporter can maintain GBP prices by reducing his home country prices or he can increase GBP prices but accept a loss of sales

so to my mind there is no reason why the values or volume of sales in GBP should fall but there is a propensity for the volume of imports to fall.