Me burying my head in the sand?
You just haven't got a clue. Or you are hoping that everyone else hasn't got a clue? I work for an American company. I own American shares. It has always been a volatile exchange rate. In 2009 it went as low as $1.36. Not much above where it is now. But in 2008 it was $2.03 and 2007 was $2.10 So it lost over 1/3 in two years. This was caused by the ones that were supposedly backing the remain side.
And you say that I am unaware on how quickly it has dropped below $1.50 It hasn't been $1.50 or above since last year. As I have constantly said it was already in decline before the vote. The vote didn't help. But the drop hasn't been as dramatic as you would like everyone to believe. And it is only 6c lower than in 2009.
It's okI work for a small independent British manufacturer who exports outside of the EU, specifically the Gulf states and here's the problem. As a country we no longer process raw materials in components. We buy it all in. Just today one of the major components that we have to buy in from outside the UK because it's simply not processed and manufactured in the UK anymore so has to imported went up 5%. We're expecting other raw materials to follow suit so it really is going to be swings and roundabouts. Only in the meantime as consumers everything from food to fuel is going to go up so from where I'm sitting the export thing is going to be offset by the cost of importing, so no gain and then it's going to cost me more to get to work, feed my family and probably heat and light my house this winter.
It isn't opinions that I showed you. It is cold hard facts. No bullshit from the remain side. No bullshit from the out side.Here's the thing astute. If you're right I'll say few and breath a sigh of relief. However if I'm right and in six months I'm still right you'll still be in denial. It's a trait that's becoming more and more obvious in certain sections of those who voted out and you clearly fit that bill. As grendull once said to you is your posters name supposed to be ironic?
It was the remain side that said if we voted leave inflation would have to go up. Now you are trying to blame the leave side for wanting inflation.It's ok
Dave,Nige and Boris are the new Union leaders, desperate for us all to get a rise,get a little inflation going,then finally Interest rates can jump and take those extras off us again.
I thought the States were a tad out of step last year raising their rate when no one else would
It was the remain side that said if we voted leave inflation would have to go up. Now you are trying to blame the leave side for wanting inflation.
How childish has this got to go just because some didn't get the result they wanted
The £ isn't weak. It just isn't as strong as the $. And that has been the case for years now.It is a fact that exporters profit from a weak pound. But.... As Grendel says it will probably be short term. We Import the raw materials or components to make the goods we export- our production costs will go up. If we stop the free movement of labour our wage costs will also go up. If..... it is such a bonus having a weak pound, we could and should have done this before brexit. In which currency do we pay our national debt interest in? The leave side don't want any hear about the down side of brexit- but, it doesn't mean it will all be rosy outside the EU. People hailing it being an historic victory of the little guy are going to be disappointed. The tory party will drift to the right and the labour party is fighting itself. Who is going to help the low paid workers if prices so rise?
The £ isn't weak. It just isn't as strong as the $.
It is a fact that exporters profit from a weak pound. But.... As Grendel says it will probably be short term. We Import the raw materials or components to make the goods we export- our production costs will go up. If we stop the free movement of labour our wage costs will also go up. If..... it is such a bonus having a weak pound, we could and should have done this before brexit. In which currency do we pay our national debt interest in? The leave side don't want any hear about the down side of brexit- but, it doesn't mean it will all be rosy outside the EU. People hailing it being an historic victory of the little guy are going to be disappointed. The tory party will drift to the right and the labour party is fighting itself. Who is going to help the low paid workers if prices so rise?
You've posted some gems in the past, but this is an absolute corker!
Again. If you look at the data you'll see that over the last 30 years the pounds natural position against the dollar is between 150-160..
At least he contributes more than snide one liners though. It seems to be your trait.
People want to get into gold so their money is safe. Investing in property like office blocks is quite a high risk investment. So it takes longer to sell these types of properties. So they suspend this type of investment to stop it from crashing in times of uncertainty. We have the Tories that are voting for a new leader. Labour have a leader they don't want that the Tories helped to vote in. And how about article 50?Companies already withdrawing billions from the UK plus realty estate fonds being forced to sell property, as they can't sell out those pulling their money. I'm petty sure this will be explained here in a sense way, too.
Its funny you went back only 30 years Tony, for as you know 31 years ago the pounds position against the dollar was at its worst 1.05, (it was falling to that low level before that) and as you have stated it took an aggressive economic stance from Reagan to get it on the rise again.
People want to get into gold so their money is safe. Investing in property like office blocks is quite a high risk investment. So it takes longer to sell these types of properties. So they suspend this type of investment to stop it from crashing in times of uncertainty. We have the Tories that are voting for a new leader. Labour have a leader they don't want that the Tories helped to vote in. And how about article 50?
So yes there is a lot of uncertainty that needs to be sorted out.
Who said that it was a good sign?People get into Gold when all else is failing as it's a safe bet. It's not a good sign.
You just can't get your head around what is going on. Those voting leave said that it would happen. Cameron hasn't helped things so far. All he has done is added to the uncertainty. Short term pain for long term gain. And the short term pain makes our goods cheaper.It's not me who goes back 31 years it's the article I've linked. Try reading it. It clearly points out that last time the pound was this low against the dollar it was because the dollar was strong not that the pound was weak. The complete opposite and what many are in denial about is that right now the pound is down because the pound is weak, not because the dollar is strong. The dollars position on the world stage has remained much the same over the past 2 weeks, it's the pound that has fell not the dollar that has risen and the pound is consistently falling against all currency not just the dollar over the last 2 weeks and is predicted to fall further still.
You just can't get your head around what is going on. Those voting leave said that it would happen. Cameron hasn't helped things so far. All he has done is added to the uncertainty. Short term pain for long term gain. And the short term pain makes our goods cheaper.
Read this crap you have put. So your items are going to cost more but the exchange rate will make them cheaper you say. Your normal contradictions I see.
Our production costs are going up because raw material costs are going up due to the extra cost of importing raw materials. Keeping up so far? This means our pounds sterling sale price has to go up to cover rising costs. Still keeping up? Therefore any assumed benefit of being a UK manufacturer who's main business is export (specifically to the Gulf states at the company I work for) because the pound is more attractive on exports is lost because the price we sell our goods for HAS to go up because our build cost is now front-loaded because the cost of importing raw materials to build our goods have gone up due to the weakness of the pound. Simply enough for you? It's very basic economics. If it cost you £1.00 to build something and you sell it for £1.50 if costs suddenly go up to £1.50 you can no longer sell it for £1.50. It's not a good business model, a business only works if it's making profit. If you then put your price up to £2.00 to maintain your £0.50 profit that enables your business to run at a profit any supposed gain of the pound against the dollar on exports are lost.
Our production costs are going up because raw material costs are going up due to the extra cost of importing raw materials. Keeping up so far? This means our pounds sterling sale price has to go up to cover rising costs. Still keeping up? Therefore any assumed benefit of being a UK manufacturer who's main business is export (specifically to the Gulf states at the company I work for) because the pound is more attractive on exports is lost because the price we sell our goods for HAS to go up because our build cost is now front-loaded because the cost of importing raw materials to build our goods have gone up due to the weakness of the pound. Simply enough for you? It's very basic economics. If it cost you £1.00 to build something and you sell it for £1.50 if costs suddenly go up to £1.50 you can no longer sell it for £1.50. It's not a good business model, a business only works if it's making profit. If you then put your price up to £2.00 to maintain your £0.50 profit that enables your business to run at a profit any supposed gain of the pound against the dollar on exports are lost.
Surely your finance department has a base B Plan FX that it basis it's market by market profitability doesn't it?
But if the buyers are getting more £ for their $ then in real terms an increase in their purchase price is nullified by the better (for them) exchange rate isn't it?
So there's no gain for exports then is there. Like I'm trying to point out. The big problem is that imports are going to get more expensive and the British manufacturing industry relies heavily on the import of raw materials. If raw materials go up yes fine we can put our prices up but we have to pay more in the first place. That has a negative effect on something called cashflow. If all of a sudden you need to find an extra 5% to purchase the raw materials before you can turn them into something to sell where does that extra money come from? The banks? Hardly know for lending new money since the last recession are they let alone since brexit. Why do you think the BOE is making statements left right and centre, trying to give assurances not only to the market's but also the banks to encourage the banks to keep lending?
BOE are relaxing rules to make it easier for banks to lend to business's so it should help with the short term problem that may exist.
There may be no gain for exports but its certainly not as bad as its being painted by the press and indeed by you Tony. Short term there may be a slight effect on the cashflow but within a few weeks/months depending on how the invoices are paid there should be no real difference. BOE are relaxing rules to make it easier for banks to lend to business's so it should help with the short term problem that may exist. Don't panic. The worlds still turning.
So there's no gain for exports then is there. Like I'm trying to point out. The big problem is that imports are going to get more expensive and the British manufacturing industry relies heavily on the import of raw materials. If raw materials go up yes fine we can put our prices up but we have to pay more in the first place. That has a negative effect on something called cashflow. If all of a sudden you need to find an extra 5% to purchase the raw materials before you can turn them into something to sell where does that extra money come from? The banks? Hardly know for lending new money since the last recession are they let alone since brexit. Why do you think the BOE is making statements left right and centre, trying to give assurances not only to the market's but also the banks to encourage the banks to keep lending?
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