Brexiters should be 'Ashamed of the harm to come"

kabayiri

wotsthat wrote: »

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Yes but it's a bit rich to equate Brexit, in any way, with a cure for the obesity crisis.

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I can't see anything else changing our consumption patterns tbh.

They bang on about food education, as though that will fix things.

I think Brexit will clearly have negative impacts, but there will be some winners too.

CLAPTON

wotsthat wrote: »

The only inevitability of a trade deficit is it'll have to balance so we can eventually pay for our imports. Yes, economists point out trade deficits are associated with currency effects but I thought we didn't listen to them anymore.

The foreign account always balances : in the situation of deficit in the current account the balance is made up by borrrowing foreign currency and selling UK assets.

A devalued currency forces people to import less/ make exports more attractive. Buying less imports by choice (a patriotic duty) and exporting more (using available productivity gains) would have the same effect and you'd be guessing what the effect on currency would be.


The certainty of your position is very important to you but you don't know the trade deficit wasn't already priced into Sterling on 23rd June and the devaluation since then is a pricing in of economic damage. If anyone else suggests Sterling is too high/ low you tend to ask 'what is the correct price?'

the correct price depends upon objectives but a good starting point is a broad (over time) average that leads to a of zero deficit in the current account

If however one wants to accumulate assets for the future and/or you want to receive a positive flow of dividends in the future, either privately held or in a sovereign fund, then one needs to run a surplus.

It is reasonable to say that if the country is borrowing a lot of money then it can indeed spend more on current consumption just like a private individual can by borrowing to consume.

They aren't 'our' assets. Anyway I believe in the benefits of trade so any deal to sell an asset would usually be beneficial to both parties. It must be a good thing because there's currently a big sale on.

Indeed that is so: the private companies and individuals involved doubtless both see a benefit.

The impact of the collective decisions does of course affect the value of the pound both in the present and in the future.
If the level of the pound is not a matter of concern then all is well.

I think the UK is doing OK but uncertainty is the cause of many of these effects. The irony is by the time we get to the other side much more of 'our' business and industry will be in the hands of foreigners. That's Brexit - whatever happens must be a good thing.

the fall in the level of the pound was inevitable although the timing was not.
Whether the level of asset sales will increase is an interesting point and the answer is not entirely clear.

Do you have evidence for a rising level of asset sales?


As you know I don't believe that brexit brings only good things : the only people who do are fools and people like you can constantly proclaim it.

wotsthat

CLAPTON wrote: »

The foreign account always balances : in the situation of deficit in the current account the balance is made up by borrrowing foreign currency and selling UK assets.

the correct price depends upon objectives but a good starting point is a broad (over time) average that leads to a of zero deficit in the current account

If however one wants to accumulate assets for the future and/or you want to receive a positive flow of dividends in the future, either privately held or in a sovereign fund, then one needs to run a surplus.

It is reasonable to say that if the country is borrowing a lot of money then it can indeed spend more on current consumption just like a private individual can by borrowing to consume.

Indeed that is so: the private companies and individuals involved doubtless both see a benefit.

The impact of the collective decisions does of course affect the value of the pound both in the present and in the future.
If the level of the pound is not a matter of concern then all is well.

the fall in the level of the pound was inevitable although the timing was not.
Whether the level of asset sales will increase is an interesting point and the answer is not entirely clear.

Do you have evidence for a rising level of asset sales?

As you know I don't believe that brexit brings only good things : the only people who do are fools and people like you can constantly proclaim it.

i.e. a fall in Sterling isn't an inevitable result of trade deficit.

but thank you Sir Humphrey.

cogito

CLAPTON wrote: »

The foreign account always balances : in the situation of deficit in the current account the balance is made up by borrrowing foreign currency and selling UK assets.

Of course and it's a zero sum game so that the total deficit always equals the total surplus.


In the case of Euroland, Germany has illegally run up massive surpluses to the detriment of other countries in the Eurozone. In that situation, they made up the balance by lending it to countries like Greece at very low rates of interest because of course, being in the euro meant that Greece suddenly acquired AAA rating instead of BBB or lower which it had always had previously because of its record as a serial defaulter. This couldn't really go wrong, could it?


What Germany should of course do is to revalue its currency to reduce the surplus but of course it doesn't have its own currency so it can't. It could also make fiscal transfers to other EU countries which is effectively what happens in the USA but domestic politics don't allow this to happen either so the poorer countries continue to suffer because they are locked into a currency which does not allow them the option of devaluation.


In a nutshell, all that is wrong with the euro and why it will ultimately fail. The can can only be kicked so far.

Conrad

The devaluation is necessary and desirable. The pound is now near 'fair value' based on the real effective exchange rate used by the International Monetary Fund.

Central banks across the developed world are caught in a deflationary trap.

Herzlos

Conrad wrote: »

We have an obesity problem, most of us can always eat a little less if food costs are an issue

Apart from those near the bread line, or already relying on food banks.

Like I said before; you're well isolated from real issues following Brexit, so are happy to take the risk. Others aren't so fortunate.

Conrad

Herzlos wrote: »

Apart from those near the bread line, or already relying on food banks.

Like I said before; you're well isolated from real issues following Brexit, so are happy to take the risk. Others aren't so fortunate.

So you've assumed there were no risks, no uncertainty, no inflation if we vote remain. You've also not recognised the great benefits of devaluation for the entire nation


Utterly bizzare.

cells

Conrad wrote: »

In the near future you will come to slowly understand what this change was all about, and hopefully have a light bulb encounter

Everyone from Corbyn to Livingstone, Hammond to Boris recognises our economy was totally unbalanced and dangerously unhealthy, reliant on mass consumption of imports, and vast debt to fuel it.

Carry on in la la land, enjoy

totally empty statements

Our economy is not based on one thing and certainly not on 'mass consumption of imports'

More importantly just list the country/countries you think we will resemble in 10-20 years time. If our economy is so terrible and things so !!!! maybe you can point to the nations we will look like in the future so we can see if things are good/bad/roughly-the-same in those places

Filo25

Conrad wrote: »

So you've assumed there were no risks, no uncertainty, no inflation if we vote remain. You've also not recognised the great benefits of devaluation for the entire nation


Utterly bizzare.

Of course there would have been a lot of risks in the economy had we voted to Remain

I do think its utterly bizarre how many who voted Brexit are either unwilling to recognise or admit that adding a load of new risks and uncertainty on top an already unstable Global and British economic situation might not have been necessarily to the economic benefit of the nation.

There were clearly other non-economic reasons why people voted Brexit, and that was absolutely their right, but it gets boring reading the same nonsense all the time about Brexit only having economic upsides for us.

The issue I have with the heavy devaluation of Sterling isn't so much its impact but more its cause, a collapse in confidence in the UK's economic future, you can disagree with that as much as you like but that is an opinion clearly held by people with money at stake, who could care less about spinning political points to make a case, they just want to make money.

Will devaluation held the deficit? Quite probably albeit at the expense of making all of us either with Sterling savings or earning wages in Sterling a bit poorer. Giving us all a nominal paycut would achieve much the same impact and I doubt many of us would be rushing to volunteer for that for the greater good!

Conrad

Filo25 wrote: »

heavy devaluation of Sterling isn't so much its impact but more its cause, a collapse in confidence in the UK's economic future,

The markets expect us to employ measures to keep the pound lower as we venture back into the world as a nation fully in charge of ourselves, a global trader with need of a keen currency.


FTSE250 and other measures indicate sound investor expectations.


We will be safer than ever, and when I employ words such as 'nimble' & 'autonomous', it's because these qualities going forwards are central to our new place in the world and the prosperity we will scuplt