Brexit

Linton

dividendhero wrote: »

I do follow that point, but sterling has been declining against harder currencies like the Swiss Franc for decades, yes there's been ups & downs - but the trend is downwards.

If it was as simple as all the information already been baked into the price, then why do currencies like the Turkish Lira continually decline?

It is a balance between the situation now and the predicted situation at some time in the future and between currency speculation and the exchange of currencies for trade. Currency rates cannot become too out of kilter with the relative cost of goods and services. For example, if the Turkish Lira was too cheap now Turkey's exports would be extremely good value. $s, £s and Euros would flood into the country and be exchanged by the locals for Turkish Lira. This would push up the price of the Lira.


This doesnt work if there is little trade. I remember being in Ecuador ( which I believe produced sufficient oil for its own use and not a lot else) many years ago and calcuating that the cost of diesel at service stations was rather less than the global market cost of crude oil.

Alexland

dividendhero wrote: »

I do follow that point, but sterling has been declining against harder currencies like the Swiss Franc for decades, yes there's been ups & downs - but the trend is downwards.

If it was as simple as all the information already been baked into the price, then why do currencies like the Turkish Lira continually decline?

Markets only tend to price in the next 30 months or so. Even if we knew for sure the world was going to end in 5 years markets might not start pricing it for a few more years. That's why global warming and the predicted end of oil make very little difference to share prices, they are too far out.

Alex

Josquin

Thanks everyone.


Very interesting stuff.

Josquin

Hi





Any eaxamples of how that can be done?


cheers

eskbanker

Josquin wrote: »

Any eaxamples of how that can be done?

How what can be done?

It's not clear from your post who you were replying to, so if you want your posts to make sense then the best thing is to use the quote button (as I have here) to include some or all of the post being referred to, otherwise your post has no context....

Apodemus

eskbanker wrote: »

How what can be done?...

Clearly it was:

alexland wrote:

...the world is going to end in five years...

...and the answer is SpaceX shares!