The Pound Sterling Is Becoming Toilet Paper!!

creeper1

Yet again the euro and pound sterling are reaching parity. What an unattractive investment the UK is. Analysts were predicting growth by now in the UK. It hasn't happened and it's not going to happen. As warned by Jim Rogers in January there is no hope for the UK.

This is despite the fact that many of the major European economies are now out of recession. And the euro, fortuately for Ireland, has been a good store of strenght. It is has kept it's value due to the wise policies of the ECB which remembers clearly what happened in the Weimer Republic in Germany before the second world war.

The bank of England is printing money like there is no tomorrow. What an idiotic policy. All those English a year ago thinking that they were rich a year ago now find themselves a dawm site poorer. When they go abroad they will soon feel that pain in their poket.

What is next for the UK? Hyperinflation that's what! And a currency better used as toilet paper than anything else!

Amhran Nua

creeper1 wrote: »

Yet again the euro and pound sterling are reaching parity.

Its great for their exports and domestic manufacturers though.

Sea Sharp

I doubt they're looking at hyper-inflation, but inflation yes. Give it 5 years and things will balance out. wages will go up in proportion to costs etc..

ei.sdraob

Amhran Nua wrote: »

Its great for their exports and domestic manufacturers though.

Yes thats right

make everyone 30% poorer thru printing money which is the ultimate stealth tax as it robs everyone

in order that few companies export more

:rolleyes:



i sure hope your party doesnt not advocate such sly and unfair transfer of wealth from everyone to few


and what does the UK have to show for printing 200billion pounds (actually they are too cheap to print that! they just added few zeros to certain bank accounts)

nothing... nada ....


their economy is still shrinking and exports are still falling, and the are planning to printy printy more

now compare that to Germany and France which are out of recession already

ednwireland

ei.sdraob wrote: »

Yes thats right

make everyone 30% poorer thru printing money which is the ultimate stealth tax as it robs everyone

a good old devaluation sorry fiscal easing back to recession and inflation for the UK methinks

SkepticOne

creeper1 wrote: »

Yet again the euro and pound sterling are reaching parity.

So the Euro is already toilet paper and sterling is now joining it.

ei.sdraob

ednwireland wrote: »

a good old devaluation sorry fiscal easing back to recession and inflation for the UK methinks

yeh tinkering with low rates is one of the reasons for this recession/depression

so what do they do? lower rates more and they are now essentially negative rates thanks to printing

leninbenjamin

seems the British haven't learned from this recession at all.

SkepticOne

Somehow I doubt they will be coming to Ireland to learn about economic management.

old boy

SkepticOne wrote: »

Somehow I doubt they will be coming to Ireland to learn about economic management.

they will be coming to find out how not to. i do not think the uk tresuary will be headhunting a certain lenihan b.

MrMicra

ei.sdraob wrote: »

Yes thats right

make everyone 30% poorer thru printing money which is the ultimate stealth tax as it robs everyone

in order that few companies export more

That's precisely right. The government has favoured wealth creators over wealth holders.
It is a logical and sensible policy and one which I wish was open to us in Ireland.
Essentially you get the deflationary hit over and done with in a year and can move forward from a lower base.

ei.sdraob

MrMicra wrote: »

That's precisely right. The government has favoured wealth creators over wealth holders.
It is a logical and sensible policy and one which I wish was open to us in Ireland.
Essentially you get the deflationary hit over and done with in a year and can move forward from a lower base.

you dont understand

DEVALUATION TAXES EVERYONE AND EVERYTHING

please read the above until it sinks in

in the UK the devaluation in last few years is equivalent to 30% tax on everything and everyone from the poorest to the richest
everything in the economy gets taxed in this stealthy manner and the wealth is stolen and redistributed to few companies who export or who have access to the newly printed money

devaluation penalizes the savers and the responsible parties! the lack of savings and abuse of credit is what got us here, more of the same wont help

that is grossly unfair, there is a reason why we have sliding scale taxation system, as a 30% tax would hit the poorest quartile alot harder than 30% on the richest quartile

SLUSK

MrMicra wrote: »

That's precisely right. The government has favoured wealth creators over wealth holders.
It is a logical and sensible policy and one which I wish was open to us in Ireland.
Essentially you get the deflationary hit over and done with in a year and can move forward from a lower base.

How many new investors do you think you will get into a country with a depreciating currency? Alot of wealth will leave the country and alot of jobs will be lost in the future because of loss of purchasing power.

I am not familiar of any country that has succesfully inflated itself to wealth. If inflation was a good idea Zimbabwe would be a rich country.

leninbenjamin

MrMicra wrote: »

It is a logical and sensible policy and one which I wish was open to us in Ireland. Essentially you get the deflationary hit over and done with in a year and can move forward from a lower base.

it doesn't solve anything. All it does is stave off an inevitable recession. The American's did this (or something similar) after 9/11 and that caused the sub prime thing that kicked the whole thing off globally.

harsea8

what has this got to do with Irish economy? Just looks like another chance for brit-bashing thread by the usual bigoted twats

ei.sdraob

harsea8 wrote: »

what has this got to do with Irish economy? Just looks like another chance for brit-bashing thread by the usual bigoted twats

some here think that if we here in Ireland still had the punt

we could have devalued/printed our way out of this mess

which is a fairly terrible idea whichever way you look at it, and looking at UK with a much larger economy its not helping there either

btw here in Ireland we dont say "twats"

harsea8

ei.sdraob wrote: »

some here think that if we here in Ireland still had the punt

we could have devalued/printed our way out of this mess

which is a fairly terrible idea whichever way you look at it, and looking at UK with a much larger economy its not helping there either

btw here in Ireland we dont say "twats"

if that was the OP reason for posting (which I seriously doubt) the fact is we don't have the punt, so we can't do this.....so ultimately this is a pointless discussion

and btw, I'm in Ireland and I use the word twat...does that somehow make my opinion less valid than you (who I assume uses traditionally irish swear words)

ei.sdraob

harsea8 wrote: »

if that was the OP reason for posting (which I seriously doubt) the fact is we don't have the punt, so we can't do this.....so ultimately this is a pointless discussion

yes its is a pointless discussion, the idea of knocking down the remaining pillar thats holding up what remains of the economy is plain daft

but i suppose some people have fantasies of the "olde days"

harsea8 wrote: »

and btw, I'm in Ireland and I use the word twat...does that somehow make my opinion less valid than you (who I assume uses traditionally irish swear words)

good! if you were from the UK it would have been "bloody twaaaatss"

SkepticOne

People seem to be holding up Ireland as an example to Britain of the effectiveness of currency union.

I've got a feeling that in Britain they are more likely to use Ireland as an illustration of why currency union is a bad idea.

ei.sdraob

SkepticOne wrote: »

People seem to be holding up Ireland as an example to Britain of the effectiveness of currency union.

I've got a feeling that in Britain they are more likely to use Ireland as an illustration of why currency union is a bad idea.

and they do

the ECB did have low rates (never mind that BOE's and FED's were lower and still lower)

which wasnt good for Ireland


but just because there is cheap money available doesnt mean a country cant use it wisely, countries like Germany invested wisely the cheap money during the boom years into renewables and are now a world leader

we instead build houses and shoebox apartments



a comparison can be made with overweight people, just because food is cheap in mcdonalds doesnt mean you have to eat the whole shop

SkepticOne

ei.sdraob wrote: »

but just because there is cheap money available doesnt mean a country cant use it wisely, countries like Germany invested wisely the cheap money during the boom years into renewables and are now a world leader

I think you may be confusing cause and effect here. Money was cheap in the eurozone because the Germans during that time, as well as a number of other countries, due to their economic slump, were saving rather than spending. Hight rates simply would not have been appropriate. It is not that they took advantage of low interest rates, they were part of the cause of low interest rates.

MrMicra

ei.sdraob wrote: »

you dont understand

DEVALUATION TAXES EVERYONE AND EVERYTHING

The tone of your response is rude and inappropriate. Please do not pretend to a level of education and intelligence that you do not posess.
I may not understand the effects of a devaluation (though I am certain that I understand those effects better than you) but I do understand how to use an apostrophe when using a contraction.

ei.sdraob wrote: »

you dont understand

DEVALUATION TAXES EVERYONE AND EVERYTHING

A devaluation is not a tax. It is the destruction of the stored wealth of a country in order ensure that the country can continue to produce wealth in the future.

ei.sdraob wrote: »

the wealth is stolen and redistributed to few companies who export or who have access to the newly printed money

The wealth is not stolen it is destroyed. It is destroyed in order to be recreated later.

ei.sdraob wrote: »

devaluation penalizes the savers and the responsible parties!

Quite correct.

ei.sdraob wrote: »

the lack of savings and abuse of credit is what got us here, more of the same wont help

A lack of saving and the abuse of credit are not the same thing.

ei.sdraob wrote: »

that is grossly unfair, there is a reason why we have sliding scale taxation system, as a 30% tax would hit the poorest quartile alot harder than 30% on the richest quartile

A devaluation is not a tax.

MrMicra

creeper1 wrote: »

It is has kept it's value due to the wise policies of the ECB which remembers clearly what happened in the Weimer Republic in Germany before the second world war.

If your grasp of economics is as good as your grasp of history you should go to work for the department of finance; the German hyperinflation was in 1923. It was certainly before the second world war.

ei.sdraob

MrMicra wrote: »

A devaluation is not a tax.

fine so

call it a robbery

either way it makes everyone poorer for the sake of a few

c montgomery

MrMicra wrote: »

The tone of your response is rude and inappropriate. Please do not pretend to a level of education and intelligence that you do not posess.

??????????????

Pot, kettle anyone!!!!!!!!

sceptre

Those of you who are getting personal with your fellow contributors will stop it now please. Kindly regard that as a non-negotiable instruction. You are aware of how to report posts to the moderators (little warning triangle) and those of who who chose to fling muck back should have been clicking on that instead.

ei.sdraob wrote: »

btw here in Ireland we dont say "twats"

I say it quite often. It's frequently politer than what I really want to say. Having said that, calling a fellow member on the politics forum a twat is a no-no.

thebman

We better hope the sterling doesn't become toiler paper, Britain is a large export market for Ireland, it would fook us up too.

ardmacha

We better hope the sterling doesn't become toiler paper, Britain is a large export market for Ireland, it would fook us up too.

True. While wiping your a**e with QEII has a certain appeal, an orderly currency market is essential in a divided country which trades much with Britain. But along with a general slow decline in Sterling there will be short term fluctuations that will be damaging.

johnnyskeleton

ei.sdraob wrote: »

you dont understand

DEVALUATION TAXES EVERYONE AND EVERYTHING

please read the above until it sinks in

in the UK the devaluation in last few years is equivalent to 30% tax on everything and everyone from the poorest to the richest

It's a subsidy to people who are net debtors as they now have to repay less (if their debt is held in sterling).

ei.sdraob

johnnyskeleton wrote: »

[/B]

It's a subsidy to people who are net debtors as they now have to repay less (if their debt is held in sterling).

yep

the people who are most reckless get of easy while the sensible savers get hit

johnnyskeleton

ei.sdraob wrote: »

yep

the people who are most reckless get of easy while the sensible savers get hit

That is the point though - it is not a tax on everybody but rather a transfer of wealth from the net paper currency asset holders (creditors) to the net debtors.

So while I personally think inflation is a terrible idea, I may be a minority in that view and it may be formed by my aversion to debt and preference for savings over consumption. But if the majority of people want to effect this transfer of wealth, and the government supports them, they can and will do it and moreover they will feel that it is a massive success.

I also disagree that the ECB is entirely sensible in this regard, and I suspect that they have engaged in a very low level form of quantative easing. For example, extending unlimited credit to banks which are bailed out by government bonds which themselves can be used to repay the original debts is a very creative way, in my opinion, of effecting an increase in the money supply without overtly printing money or directly injecting it into the economy.

As sterling and USD become weaker and the rest of the world seems like they are following suit the pressure on the ECB mounts to inflate in unison with the other countries.

One final point which I think is important is that the effects of quantitative easing may not be felt until recessions end. So a long period of recession/stagnation with deflation or price stability could be followed by a small upturn and a large (disporportionatly so) increase in inflation.