Milti:
Robin, in your opinion , had the result of the referendum been the other way would these " speculators" have driven the pound up ? Or at least the pound would not have been where it now is ?
I don’t know the answer to that .......... because it is speculative and subjective! But you did ask ........
If you look at the trends going back before even the decision for referendum was made, the trend has gone both ways over time. It fell to a new average of around 1.15 immediately after the referendum but that was not because we had left the EU it was because of the opinions and overconfident indications from certain prominent people, who were speculating what they thought would happen immediately after a leave vote. The speculators reacted to the doom-and-gloom predictions ......... which, as we know, never happened. But the damage to Sterling was done!
I see currency speculation as the equivalent of accusing a man of being a Paedophile because someone else suggested they were based on their opinion. The victim gets pilloried based on speculation he is something that cannot and has not yet been proved but he has shown very few signs of being one, according to his mates at the rugby club!
Britain appears to have a strong and healthy economy with low unemployment so based on economic trend the outlook appears healthy. But this has not stopped the doom merchants from loudly peddling their gloomy predictions. THAT is what is hitting the pound in your pocket .......... not economics and not Brexit itself.
I say ‘
appears’ because I don’t actually agree with that for the simple reason that 80% of the UK economy is based on finance and banking and the service sector with a mere shadow of its former manufacturing left ..... and IMO that is a system just heading for a disaster! Russia, China, Iran, many countries in SE Asia, Sth America and Africa are ditching the dollar based banking system and trading in sovereign currencies and also selling off US Bonds to buy gold. The price of gold has been controlled by the US for decades but they appear to have lost the absolute control they have had up to now.
So the UK has to do a lot to recover manufacturing industry and create jobs that in turn create wealth, not just swell the bank accounts of the few or inflate asset prices and stock market values ..... all of which are based on
SPECULATION not wealth creation. That means new economic thinking. I almost choke on the thought but in certain instances, not all, I tend to agree with Paphitis' optimism ....... but he only gets 1 out of 10 for his presentation.
China already realised the need for changes a couple of decades ago or even longer, and this is why their economy is a threat to the US and the west in general. The Chinese government owns 80% of the banks, virtually controls the others and owns its Central Bank. They can directly fund research and development, entrepreneurs, start up ventures, the building of factories and infrastructure and the social system .......... without debt or inflation and with no interest to pay to private investors. A collapse of a particular project or factory does not mean massive job losses, they divert the labour and resources elsewhere and by buying bonds in their own industries, effectively subsidise their operation.
IMO: The UK should take a seriously look at changing the banking and financial systems to operate more on the lines of the Chinese economy ..... and it is not structurally that difficult to do, could almost happen overnight and the public would not see any immediate difference! In the longer term, like China, the benefits would become obvious.
That’s my take.
