Discussion
StevieBee said:
The EU is principally an economic institution and by dint of the fact that Germany is the most populous EU nation, it holds the greatest number of Euros and therefore has more influence than, say, Italy.
For a similar reason the US Dollar is the international currency as there are more Dollars knocking around than any other currency.
It's a little vague and abstract and others more versed in this may explain it better than I
The status of the US Dollar as the global currency isn't anything to do with how much exists, it's all about the structures that backstop the currency and the political decisions that were made during WW2 to create a financial world system that would become the basis for finance when WW2 ended. This agreement, known as the Bretton Woods System created the IMF and what became the world bank. Part of the agreement was that the US dollar would be the reference currency because they held 2/3 of the worlds gold reserves at the time. The pegging of this system to the US dollar and that being based on a Gold Standard led to the cold war, because Russia wouldn't agree to this.For a similar reason the US Dollar is the international currency as there are more Dollars knocking around than any other currency.
It's a little vague and abstract and others more versed in this may explain it better than I
This all worked fairly well until Nixon got into power and decided to kill the peg of the US dollar to gold reserves, blowing up the gold standard. This led to floating currencies and a large number of countries decided at that time they wanted to still peg themselves to the US Dollar, so that became the world reserve currency. At the same time as Nixon blew up the system, the GBP became a fully floating currency.
It may surprise a lot of people, but prior to the GBP and USD being the world reserve currencies, in the 19th century it was the Dutch Gilder that was used because of the global dominance of the Dutch east India company.
What we are seeing now boosting the USD is that the Eurozone area is in a trade surplus position to the rest of the world and that excess money isn't being invested in Europe, it's being shipped into the USD because the EURO isn't seen as a safe bet. The same thing is happening with China, where huge sums of money are being shipped out of China because the Chinese don't trust their government to not one day just turn round and steal their money.
This is also driving the global property boom in the world cities, because the Chinese consider investing their money into property they will never see is safer than one day losing it all when the Government decides to grab it. The wealthy Chinese are putting their money in countries where they see stability not only financially, but politically. This is why the Eurozone is utterly screwed, because it's not a stable political or financial system so they wont invest into it. It's why London property sored because the GBP and the British political system is seen as fundamentally stable. Currently, the UK, USA and AUS have put capital controls in place to stop the Chinese buying up everything in sight.
Unfortunately for most of Europe, the EU have created a currency that isn't a real currency when you get to the structures behind it. It's fundamentally unstable and was created with treaty rules that don't allow it to function as a proper currency, it's going to take a huge event in Europe to fix it, which will mean it will fragment into at least two currencies, maybe more. That's going to send Europe into a massive deflation and a lot of pain will happen. whist the systems sort themselves out.
The only way the USD will weaken significantly, is if foreign investors see it as no longer stable politically. It's got absolutely nothing to do with how the US economy itself performs. This is bad news for US companies that want to export, because their currency is too expensive and there is nothing they can do about it, even if the economy crashes, the USD will stay high. War with China will sort that problem out.
Edited by anonymous-user on Tuesday 16th May 20:29
jsf said:
StevieBee said:
The EU is principally an economic institution and by dint of the fact that Germany is the most populous EU nation, it holds the greatest number of Euros and therefore has more influence than, say, Italy.
For a similar reason the US Dollar is the international currency as there are more Dollars knocking around than any other currency.
It's a little vague and abstract and others more versed in this may explain it better than I
The status of the US Dollar as the global currency isn't anything to do with how much exists, it's all about the structures that backstop the currency and the political decisions that were made during WW2 to create a financial world system that would become the basis for finance when WW2 ended. This agreement, known as the Bretton Woods System created the IMF and what became the world bank. Part of the agreement was that the US dollar would be the reference currency because they held 2/3 of the worlds gold reserves at the time. The pegging of this system to the US dollar and that being based on a Gold Standard led to the cold war, because Russia wouldn't agree to this.For a similar reason the US Dollar is the international currency as there are more Dollars knocking around than any other currency.
It's a little vague and abstract and others more versed in this may explain it better than I
This all worked fairly well until Nixon got into power and decided to kill the peg of the US dollar to gold reserves, blowing up the gold standard. This led to floating currencies and a large number of countries decided at that time they wanted to still peg themselves to the US Dollar, so that became the world reserve currency. At the same time as Nixon blew up the system, the GBP became a fully floating currency.
It may surprise a lot of people, but prior to the GBP and USD being the world reserve currencies, in the 19th century it was the Dutch Gilder that was used because of the global dominance of the Dutch east India company.
What we are seeing now boosting the USD is that the Eurozone area is in a trade surplus position to the rest of the world and that excess money isn't being invested in Europe, it's being shipped into the USD because the EURO isn't seen as a safe bet. The same thing is happening with China, where huge sums of money are being shipped out of China because the Chinese don't trust their government to not one day just turn round and steal their money.
This is also driving the global property boom in the world cities, because the Chinese consider investing their money into property they will never see is safer than one day losing it all when the Government decides to grab it. The wealthy Chinese are putting their money in countries where they see stability not only financially, but politically. This is why the Eurozone is utterly screwed, because it's not a stable political or financial system so they wont invest into it. It's why London property sored because the GBP and the British political system is seen as fundamentally stable. Currently, the UK, USA and AUS have put capital controls in place to stop the Chinese buying up everything in sight.
Unfortunately for most of Europe, the EU have created a currency that isn't a real currency when you get to the structures behind it. It's fundamentally unstable and was created with treaty rules that don't allow it to function as a proper currency, it's going to take a huge event in Europe to fix it, which will mean it will fragment into at least two currencies, maybe more. That's going to send Europe into a massive deflation and a lot of pain will happen. whist the systems sort themselves out.
The only way the USD will weaken significantly, is if foreign investors see it as no longer stable politically. It's got absolutely nothing to do with how the US economy itself performs. This is bad news for US companies that want to export, because their currency is too expensive and there is nothing they can do about it, even if the economy crashes, the USD will stay high. War with China will sort that problem out.
Edited by jsf on Tuesday 16th May 20:29
How nice to be corrected with considered detail and without first being called a t
t! .....you're in danger of giving PH a bad name!
The dollar is also stored by states in reserve against oil, because oil is priced in dollars. Price oil in something else, states will sell dollars to buy the new hedge currency. The effect of selling half(?) the dollar value on Earth would be difficult to miss.
Saddam threatened to price in Euros.
Saddam threatened to price in Euros.
grumbledoak said:
The dollar is also stored by states in reserve against oil, because oil is priced in dollars. Price oil in something else, states will sell dollars to buy the new hedge currency. The effect of selling half(?) the dollar value on Earth would be difficult to miss.
Saddam threatened to price in Euros.
The dollar system is starting to crack now though. Russia are pricing oil in rubles, China have a yuan gold market. They are both developing parallel payments systems to not be dependent on SWIFT too...Saddam threatened to price in Euros.
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
amgmcqueen said:
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
Remember, she is up for re-election. Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
amgmcqueen said:
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
What else is she meant to say??Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
amgmcqueen said:
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
She's saying that we're going to be worse off as a result of Brexit. Lots ok Leavers said they didn't care, "it was worth it to get our country back"....Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
48% of British voters can't understand why Brexit happened either....
Disastrous said:
amgmcqueen said:
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
What else is she meant to say??Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
Ignoring the ridiculous nature of that comment when she's trying to appeal to German voters, not EU apparatchiks, how on earth does she even think that's achievable?
Sway said:
Disastrous said:
amgmcqueen said:
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
What else is she meant to say??Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
Ignoring the ridiculous nature of that comment when she's trying to appeal to German voters, not EU apparatchiks, how on earth does she even think that's achievable?
Bottom line is, the EU countries will need to be seen to be coming down hard on the UK. They would be derelict in their responsibility towards the EU if they didn't make it as hard as possible for anyone trying to leave it.
The European people are very offended, if that's the right term, by Britain voting out, so I'd expect that to play quite well.
Though as someone asked a few pages back, no, my German in-laws aren't high level EU economists so obviously you need to take that into account
Countdown said:
She's saying that we're going to be worse off as a result of Brexit. Lots ok Leavers said they didn't care, "it was worth it to get our country back"....
48% of British voters can't understand why Brexit happened either....
I think you meant to say '48% of British voters took much longer than others to appreciate the benefits of Brexit.48% of British voters can't understand why Brexit happened either....
Disastrous said:
Sway said:
Disastrous said:
amgmcqueen said:
http://www.msn.com/en-gb/money/news/angela-merkel-...
Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
What else is she meant to say??Has she been on the weed again? Does she even understand why Brexit happened?
Once again, staggering arrogance shown from the self-appointed Furher of Europe!
Ignoring the ridiculous nature of that comment when she's trying to appeal to German voters, not EU apparatchiks, how on earth does she even think that's achievable?
Bottom line is, the EU countries will need to be seen to be coming down hard on the UK. They would be derelict in their responsibility towards the EU if they didn't make it as hard as possible for anyone trying to leave it.
The European people are very offended, if that's the right term, by Britain voting out, so I'd expect that to play quite well.
Though as someone asked a few pages back, no, my German in-laws aren't high level EU economists so obviously you need to take that into account
I'm friends, and work with, lots of Europeans. The plural of anecdote isn't evidence, but I'm yet to see anything that even closely shows normal European Citizens are offended by Brexit. A couple are at most 'disappointed', most are indifferent, a couple envious.
This isn't a message to gain support from the German people, it's squarely aimed at the apparatchiks - who aren't her electorate.
This for me is one of the biggest issues with the EU - the national politicians have started putting 'the EU' above the interests of their own people...
fido said:
Latest YouGov poll says only 22% are against Brexit. Pretty much reflected in the election polls as well (if we assume this is essentially Referendum 2.0).
That would be a rather idiotic assumption. I will vote Tory as our MP is rather good, I'm in the exceptionally safe Tory area. I still think that Brexit is a very bad idea. Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff