Is the end nigh for the Euro? [vol. 3]
Discussion
DJRC said:
Welshbeef...it's a reasonably accurate observation yes. A huuuuge whinge in Italy is a slice of pizza. A standardish staple of Italian lunchtimes is/was a quarter slice of pizza and a drink. The average cost of that is now about 4 Euro. The Italians say that when they went over to the Euro the equivalent cost was basically 50p (I work with Italians who have lived in England previously) for the slice of pizza plus the drink. It basically came to just over 1 Euro for both in equivalent Lira. Come handover the cost was immediately 1.5 Euro. In a decade it's now at 4 Euro.
Horrendous!But irrelevant unless compared to the cost of living and wages, salaries and taxation.
Anyway, 4 euros is about 50p again today isn't it?
Welshbeef said:
Blib said:
A similar thing occurred here in the UK with decimalisation. Everything got rounded up. And then, a bit more up.
Another reason why UK joining the Euro would be a terrible idea ditto Scotland launching the Groat in an Indy Scotland. 
LongQ said:
DJRC said:
Welshbeef...it's a reasonably accurate observation yes. A huuuuge whinge in Italy is a slice of pizza. A standardish staple of Italian lunchtimes is/was a quarter slice of pizza and a drink. The average cost of that is now about 4 Euro. The Italians say that when they went over to the Euro the equivalent cost was basically 50p (I work with Italians who have lived in England previously) for the slice of pizza plus the drink. It basically came to just over 1 Euro for both in equivalent Lira. Come handover the cost was immediately 1.5 Euro. In a decade it's now at 4 Euro.
Horrendous!But irrelevant unless compared to the cost of living and wages, salaries and taxation.
Anyway, 4 euros is about 50p again today isn't it?
Blib said:
A similar thing occurred here in the UK with decimalisation. Everything got rounded up. And then, a bit more up.
Inflation was surging right across Europe/the world. There is no indication that decimalisation was the cause in UK. UK was simply very susceptible to the underlying causes,"Economists have shown that stagflation was prevalent among seven major economies from 1973 to 1982. After inflation rates began to fall in 1982, economists' focus shifted from the causes of stagflation to the "determinants of productivity growth and the effects of real wages on the demand for labor".
http://en.wikipedia.org/wiki/Stagflation
Claudia Skies said:
Blib said:
A similar thing occurred here in the UK with decimalisation. Everything got rounded up. And then, a bit more up.
Inflation was surging right across Europe/the world. There is no indication that decimalisation was the cause in UK. UK was simply very susceptible to the underlying causes.Claudia Skies said:
Inflation was surging right across Europe/the world. There is no indication that decimalisation was the cause in UK. UK was simply very susceptible to the underlying causes,
"Economists have shown that stagflation was prevalent among seven major economies from 1973 to 1982. After inflation rates began to fall in 1982, economists' focus shifted from the causes of stagflation to the "determinants of productivity growth and the effects of real wages on the demand for labor".
http://en.wikipedia.org/wiki/Stagflation
Did you live through it? I did.' Prices rose as the currency was switched. It was common knowledge. "Economists have shown that stagflation was prevalent among seven major economies from 1973 to 1982. After inflation rates began to fall in 1982, economists' focus shifted from the causes of stagflation to the "determinants of productivity growth and the effects of real wages on the demand for labor".
http://en.wikipedia.org/wiki/Stagflation
turbobloke said:
Claudia Skies said:
Blib said:
A similar thing occurred here in the UK with decimalisation. Everything got rounded up. And then, a bit more up.
Inflation was surging right across Europe/the world. There is no indication that decimalisation was the cause in UK. UK was simply very susceptible to the underlying causes.I remember being in Southern Spain around the time the Euro came in - Germans were flooding the place in brand new mercs trying to buy as many properties as possible with car. There was a vast amount of undeclared DM to get rid of quick before the change. If you were in Spanish property at that time you could have made a killing.
VxDuncan said:
I remember being in Southern Spain around the time the Euro came in - Germans were flooding the place in brand new mercs trying to buy as many properties as possible with car. There was a vast amount of undeclared DM to get rid of quick before the change. If you were in Spanish property at that time you could have made a killing.
and the banks just took them no questions askedBlib said:
Claudia Skies said:
Inflation was surging right across Europe/the world. There is no indication that decimalisation was the cause in UK. UK was simply very susceptible to the underlying causes,
"Economists have shown that stagflation was prevalent among seven major economies from 1973 to 1982. After inflation rates began to fall in 1982, economists' focus shifted from the causes of stagflation to the "determinants of productivity growth and the effects of real wages on the demand for labor".
http://en.wikipedia.org/wiki/Stagflation
Did you live through it? I did.' Prices rose as the currency was switched. It was common knowledge. "Economists have shown that stagflation was prevalent among seven major economies from 1973 to 1982. After inflation rates began to fall in 1982, economists' focus shifted from the causes of stagflation to the "determinants of productivity growth and the effects of real wages on the demand for labor".
http://en.wikipedia.org/wiki/Stagflation
turbobloke said:
Me too, and your take on it is correct.
It's an interesting issue.If a one-off price hike in many goods within the RPI or CPI (or any other measure) basket hits an economy, the immediate, likely trickle-down is:
- wage rises (possibly for some, not all)
- GDP rises
- Tax-take rises
- increased household spending (for those fortunate enough to benefit from the changes)
- increased government spending
Normally, this sort of thing would devalue a currency, but for nations within the EU the currency zone was large enough to mask the effects of such price hikes in limited parts of the overall monetary union, for a while at least.
turbobloke said:
Blib said:
Did you live through it? I did.' Prices rose as the currency was switched. It was common knowledge.
Me too, and your take on it is correct.B. Decimalisation took place nearly 50 years ago. How old are you guys?? Because unless you're over 70 today I reckon your knowledge about the economy at the time would be limited to the price of a Mars bar and the Beano!!!
"The other major concern was that shops were using decimalisation to put prices up. However, as John Hosker of the Consumers' Association makes clear, the rise in prices was quite possibly due to inflation, which was comparatively high at the time.
"JOHN HOSKER: The fact that retailers and others had to bear the cost of conversion of machinery, training of staff and other things unquestionably means, I think, that some element of this increase in cost has been passed on to consumers. But the problem is, peering through the general steam of inflation, it's very difficult to decide just how much of the current increases in prices is as a consequence of decimalisation."
Digga said:
turbobloke said:
Me too, and your take on it is correct.
It's an interesting issue.If a one-off price hike in many goods within the RPI or CPI (or any other measure) basket hits an economy, the immediate, likely trickle-down is:
- wage rises (possibly for some, not all)
- GDP rises
- Tax-take rises
- increased household spending (for those fortunate enough to benefit from the changes)
- increased government spending
Normally, this sort of thing would devalue a currency, but for nations within the EU the currency zone was large enough to mask the effects of such price hikes in limited parts of the overall monetary union, for a while at least.
Claudia Skies said:
turbobloke said:
Blib said:
Did you live through it? I did.' Prices rose as the currency was switched. It was common knowledge.
Me too, and your take on it is correct.B. Decimalisation took place nearly 50 years ago. How old are you guys?? Because unless you're over 70 today I reckon your knowledge about the economy at the time would be limited to the price of a Mars bar and the Beano!!!
"The other major concern was that shops were using decimalisation to put prices up. However, as John Hosker of the Consumers' Association makes clear, the rise in prices was quite possibly due to inflation, which was comparatively high at the time.
"JOHN HOSKER: The fact that retailers and others had to bear the cost of conversion of machinery, training of staff and other things unquestionably means, I think, that some element of this increase in cost has been passed on to consumers. But the problem is, peering through the general steam of inflation, it's very difficult to decide just how much of the current increases in prices is as a consequence of decimalisation."
Maybe, his descendants are on facebook?
Claudia Skies said:
A. This "common knowledge" has a classic "flat earth" element to it.
B. Decimalisation took place nearly 50 years ago. How old are you guys?? Because unless you're over 70 today I reckon your knowledge about the economy at the time would be limited to the price of a Mars bar and the Beano!!!
"The other major concern was that shops were using decimalisation to put prices up. However, as John Hosker of the Consumers' Association makes clear, the rise in prices was quite possibly due to inflation, which was comparatively high at the time.
Ok, I'll bite. B. Decimalisation took place nearly 50 years ago. How old are you guys?? Because unless you're over 70 today I reckon your knowledge about the economy at the time would be limited to the price of a Mars bar and the Beano!!!
"The other major concern was that shops were using decimalisation to put prices up. However, as John Hosker of the Consumers' Association makes clear, the rise in prices was quite possibly due to inflation, which was comparatively high at the time.
I was at university during the changeover so that puts me mid 60s. Like many others in that era I was self sufficient and so had a very good idea of the cost of food (and beer) and doing the conversion sums from old pennies to new pence. And because we were going from 240 pennies/GBP to 100 pence/GBP perhaps you can imagine how most things got rounded up to the nearest whole pence ?
That's not "flat earth" thinking, it's fact. It happened, and it happened overnight on some items. Inflation was higher than today but not that high.
And apart from being an old git, I'm probably better than you at maths as well if you're equating 44 years ago to 50
Blib said:
Looks like Hosker agrees with us.
Your selective bold is a feeble attempt to divert attention away from the main point.To believe that decimalisation caused, or played a significant part in, the runaway inflation of the 1970s suggests you old codgers are suffering from dementia!
Inflation was everywhere from 1969 and through the oil crises from 1973. It is pure coincidence that UK was decimalising at the same time.
"It began in 1969 with a president facing re-election. Nixon inherited a recession from Lyndon Johnson, who had simultaneously spent generously on the Great Society and the Vietnam War. Congress, despite some protests, went along with Nixon and continued to fund the war, and increased social welfare spending. In 1972, for example, both Congress and Nixon agreed to a big expansion of Social Security just in time for the elections.
"John Maynard Keynes was an influential British economist of the 1930s and 1940s. He had advocated revolutionary measures: governments should use countercyclical policies in hard times, running deficits in recessions and depressions. Before Keynes, governments in bad times had generally balanced budgets and waited for malinvestments to liquidate, allowing market forces to bring a recovery.
"Nixon's deficits were also making dollar-holders abroad nervous. There was a run on the dollar, which many foreigners and Americans thought was overvalued. Soon they were proved right. In 1971, Nixon broke the last link to gold, turning the American dollar into a fiat currency. The dollar was devalued, and millions of foreigners holding dollars, including Arab oil barons with tens of millions of petrodollars, saw the value of dollars slashed.
"In the winter of '72/ '73, Burns was soon worried about inflation. In 1973, it more than doubled to 8.8%. Later in the decade, it would go to 12%. By 1980, inflation was 14%. Was the United States about to become a Weimar Republic? Some actually thought that the great inflation was a good thing."
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