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Gareth

General Discussions on Brexit

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What a detailed and interesting explanation Jonno. The US Dollar was and still is the benchmark for world finance. Back in the day I remember well that all shipping/airfreight costs were structured around the US Dollar - at the time, and for a long time US$2.40 = £1.

I have been travelling around Europe for many years now and in the days before the Euro I never had an incling as to weather a litre of petrol or a loaf of bread was cheaper say in Belgium than France, Germany, Holland, Portugal, Italy, Austria or Switzerland. I had pockets with so much loose shrapnel of Francs, Marks, Lire, Pesetas etc... and mixed paper money quite a lot of which I still have lying around !

Now I know exactly what a Euro can buy in European countries.

 

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9 hours ago, hhvferry said:

The full article is a posting on worldeconomics.com - https://www.worldeconomics.com/GlobalPriceIndexes/WorldPriceIndex/WPI.efp

It would be more honest if sources were quoted by posters.

But, hmm, I must be a simpleton, because a lot of this economic stuff is going over my head. I did note, though, a mention of labour costs in the Economist article. That was something I put in my earlier post. I still don't understand it, though. It stands to reason that different countries in the Eurozone are going to have different prices for the same goods because of local taxation, pay rates, etc. In my simple mind, I don't see a problem with that, and indeed it allows each country to manage its own affairs - the much-vaunted sovereignty (which the present UK government quite rightly says we have always had, even during EU membership).

The graph here shows the pound-euro exchange rate over eighteen years. If we're talking "stress", this particular evidence would point to a pound which has gradually weakened to its present miserable state.

5a02d47ba50a6_pound-euroover18years.thumb.GIF.2bb323e6f498c64ef00ca30e814f6550.GIF

The graph starts at 4 Jan 1999 and ends today (08/11/2017). I have taken it from https://www.pounds2euro.com/Charts.

"The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743). Physical euro coins and banknotes entered into circulation on 1 January 2002." (https://en.wikipedia.org/wiki/Euro)

Now that's simple enough for me to understand!

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1 hour ago, Jardinier said:

It would be more honest if sources were quoted by posters.

But, hmm, I must be a simpleton, because a lot of this economic stuff is going over my head. I did note, though, a mention of labour costs in the Economist article. That was something I put in my earlier post. I still don't understand it, though. It stands to reason that different countries in the Eurozone are going to have different prices for the same goods because of local taxation, pay rates, etc. In my simple mind, I don't see a problem with that, and indeed it allows each country to manage its own affairs - the much-vaunted sovereignty (which the present UK government quite rightly says we have always had, even during EU membership).

The graph here shows the pound-euro exchange rate over eighteen years. If we're talking "stress", this particular evidence would point to a pound which has gradually weakened to its present miserable state.

5a02d47ba50a6_pound-euroover18years.thumb.GIF.2bb323e6f498c64ef00ca30e814f6550.GIF

The graph starts at 4 Jan 1999 and ends today (08/11/2017). I have taken it from https://www.pounds2euro.com/Charts.

"The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743). Physical euro coins and banknotes entered into circulation on 1 January 2002." (https://en.wikipedia.org/wiki/Euro)

Now that's simple enough for me to understand!

Honesty? I did say it was the WPI... I'd also argue that if you want something difficult to be read, reproduce it if it's in the public domain rather than post a link as many won't bother opening it which has been proven in the past on these pages... Horse to water etc. etc. Look at the engagement since the post, it did the trick didn't it.

Jardinier, your post highlights one of the fundamental faults of a single currency being used by separate nations, taxation. Single currency valuation actually means that individual nations can't manage their own affairs. It's why the Euro was the major enabler of the crash of 2009.

Eurozone EU members couldn't devalue to protect themselves, to remain competitive and it's the overriding reason why many nations now have an overvalued currency compared to their actual economic output and are struggling and why there is no longer a thriving competitive European market place hence the high levels of unemployment.

It's is the reason why free movement is the cornerstone of it all. Allowing individuals the ability to roam unhindered to saturate areas of high wealth and high employment papers over the cracks. It allows those with an undervalued currency to thrive even more leaving those nations with an overvalued currency to struggle even more as their countrymen leave in droves raising the cost of living for those that remain.

It's simple maths with a frightening snowball effect.

 

 

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As the UK government doesn't seem capable of producing reports on the possible Brexit options and consequences it is fortunate that the EU has done it's homework. The EU reports are very comprehensive and make interesting reading giving both pro's and con's of the alternative choices.

 

http://www.europarl.europa.eu/unitedkingdom/en/ukevents/brexit/brexitstudies.html

 

 

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