KIRK AND CO Posted December 31, 2010 Share Posted December 31, 2010 Right tho kirk isnt it?chris is forever saying he hopes the £ drops even more,yet OTHER members keep on ENDLESSLY about it:no:,im only telling the truth:cute: i am with you on this one Link to comment Share on other sites More sharing options...
Guest chris955 Posted December 31, 2010 Share Posted December 31, 2010 No, you misunderstood what I said. I meant people going on endlessly about the exchange rate, the country being bankrupt etc. Like you do about wanting it to be $=£ because it would suit you yer mean?:radar: Link to comment Share on other sites More sharing options...
sgperry Posted December 31, 2010 Share Posted December 31, 2010 Pablo raises a good question though - what if the pound dropped to say $1.20, what impact would it have on the UK (forget on ex pats, migrants and so on, I think we've done that one to death!) I know it would make things cheaper to export - assuming the UK had a strong market for whatever they export these days - but what other impact would it have? Oh, and it would make it expensive for UK folks to travel o/s on holidays, I guess, plus cheap holidays for people going to the UK. I'm no economist so like Pablo, am interested in hearing what other impact it would have. If its good for the pound, how is it good - and does that mean that the UK should be hoping for a pound = $5 or even less ??? Link to comment Share on other sites More sharing options...
Guest chris955 Posted December 31, 2010 Share Posted December 31, 2010 As the 6th largest manufacturing nation in the world exports are vitally important to the economy so a low pound is very important from that point of view. Conversely obviously it isn't good for imports but it doesn't seem to have affected fuel prices dramatically especially when compared to this country where you would imagine the strength of the $ would have meant cheaper fuel. Link to comment Share on other sites More sharing options...
Guest Guest31881 Posted December 31, 2010 Share Posted December 31, 2010 As the 6th largest manufacturing nation in the world exports are vitally important to the economy so a low pound is very important from that point of view. Conversely obviously it isn't good for imports but it doesn't seem to have affected fuel prices dramatically especially when compared to this country where you would imagine the strength of the $ would have meant cheaper fuel. Sorry have I missed something, i thought this was a thread about the value of the £ and how it effected the economy, But I see you have managed to turn it into a UK V Australia thread again. Link to comment Share on other sites More sharing options...
Guest chris955 Posted December 31, 2010 Share Posted December 31, 2010 Well I suppose you could misinterpret it like that if you were so inclined. I was merely making the point that in one country with a low currency the price of fuel hasn't risen any faster than in a country with a high value currency so the actual effects of the exchange rate is hard to fathom. I'm not sure how you make it UK versus Australia because of one simple comment but whatever. Link to comment Share on other sites More sharing options...
fleabo Posted December 31, 2010 Share Posted December 31, 2010 Yes you are spot on, the strong currency is viewed as a fantastic thing for the country when in fact the total opposite is the truth of the matter. As you say the UK Government will be in no hurry to see the value of the pound rise. It doesn't help when some members on here keep on endlessly about the country being bankrupt and being no good for the country etc. Yes, a strong currency is not necessarily a good thing (but it is much better than a currency that is weak). Happy New Year. Link to comment Share on other sites More sharing options...
fleabo Posted December 31, 2010 Share Posted December 31, 2010 A weak currency is deliberate - the UK government would be happy if it were at parity - it is the standard technique to boost exports and lift a country from recession... What do they care if a few poms wanting to migrate to Oz suffer a bit!! The UK Government no longer has any control over the FOREX rate. Interest rates and QE have both been red-lined. They have no more tools left in their box of tricks and are now in 'hope and pray' mode - that the private sector can pull the country out of the mire it is been placed in (by poor governance and incompetent bankers). Its about time they started a war with someone, or started mining again. Happy New Year. Link to comment Share on other sites More sharing options...
pablo Posted December 31, 2010 Share Posted December 31, 2010 Basically Pabster - when a currency is so weak that every other country is buying their exports and its inhabitants only buy locally prices rise as people get wealthier and this liquid cash finds its home in property and other assets driving up their prices. Interest rates then have to go up to prevent these assets becoming bubbles - with a constant amount of buying required in order to prevent a collapse. Compulsory items that have to be imported such as fuel must also be factored in as this prevents prices falling to rock bottom as there is no point producing if there is no financial benefit ( factor in loan interest, cost of making people redundant, sunk costs in assets etc) ...Once interest rates have risen to remove some cash from the money supply and slow an economy down the value of said currency will rise anyway as investors buy into it. See me after the lesson for extra homework. Sounds threatening that!:wink:AHhhhhhh finance,i tell yer....................................lost?! :mad: Link to comment Share on other sites More sharing options...
Guest chris955 Posted December 31, 2010 Share Posted December 31, 2010 Well yes there are good and bad points about a weak or strong currency. Yes, a strong currency is not necessarily a good thing (but it is much better than a currency that is weak). Happy New Year. Link to comment Share on other sites More sharing options...
Parley Posted January 6, 2011 Author Share Posted January 6, 2011 The pound is starting the new year on a upward path over the last few days, up to $1.55 Link to comment Share on other sites More sharing options...
Life on easy street Posted January 6, 2011 Share Posted January 6, 2011 Pablo raises a good question though - what if the pound dropped to say $1.20, what impact would it have on the UK (forget on ex pats, migrants and so on, I think we've done that one to death!) I know it would make things cheaper to export - assuming the UK had a strong market for whatever they export these days - but what other impact would it have? Oh, and it would make it expensive for UK folks to travel o/s on holidays, I guess, plus cheap holidays for people going to the UK. I'm no economist so like Pablo, am interested in hearing what other impact it would have. If its good for the pound, how is it good - and does that mean that the UK should be hoping for a pound = $5 or even less ??? The only way it would go that low is if the U.K government implemented more quantitative easing. The risk is it could trigger massive inflation / stagflation Example the 1970,s and inflate the U.K debts away. Link to comment Share on other sites More sharing options...
Guest chris955 Posted January 6, 2011 Share Posted January 6, 2011 That's right there is next to no chance of more quantitative easing. I think it will sit around where it is at the moment, maybe drop a bit and in the months to come will start to climb as the improving UK economy kicks in. Link to comment Share on other sites More sharing options...
fleabo Posted January 2, 2012 Share Posted January 2, 2012 Happy New Year! Who got closest? Link to comment Share on other sites More sharing options...
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