Exchange rates

[Avarus]

An interesting and readable article on exchange rates and why falling rates ar not always a bad thing. The article is about the euro but applies equally to sterling. It shows the problems of the euro which locks together totally different economies within the eurozone:

http://www.forbes.com/sites/timworstall ... 3202876891

[Citizen7]

Thanks, good article.

[Nimrod103]

UBS thinks that Sterling has bottomed and is about to bounce back:

http://www.telegraph.co.uk/business/201 ... vestments/

Sterling's fall has been, perhaps, the one potent criticism of Brexit. However, in my view Sterling's drop was much more to do with fundamentals (i.e our dreadful deficit), and the referendum vote was just the trigger. Several times in the past, we have protected our country from economic shock by means of a devaluation, most notably when we left the ERM in 1992. Properly managed it will be our escape route again.

[NeilW]

"Whilst our deficit is bad"

It is neither good, not bad. It just is - being as it is the result of the net saving desires of the non-government sector.

The chancellor has no direct influence over the *total* tax take - that is determined by private sector activity. He only has jurisdiction over the distribution of charges. At least if he wants to maintain an economy operating at maximum capacity. You can of course do 'austerity' and cause a recession.

"our debt, despite being apparently large, is acceptable. "

There is no such thing as government debt. As you can see we can wipe it all out with a push of a button at the Bank of England computer. The 'debt' is just a way of paying welfare to rich people - largely private pensions in payment. Outside of the EU there is no need for it at all. We can just use the Ways and Means Account to provide the 'in credit' account balanced required by the net savings desires of the non-government sector.

The payment of interest on these savings balances - what people call the 'debt' and the 'deficit' - is a political choice. Nothing more.