2stepfan said:
Going into the Euro would demonstrably have been bad for the British economy.
Says who? Bad for whom, exactly? [Are you just making this up as you please?]
2stepfan said:
The pound has gone up against the dollar in anticipation of interest rates going up, which will happen because inflation has just jumped, because over-heating house prices have driven a consumer spending boom because of a misplaced sense of wealth. Higher interest rates means more traders buy pounds means the pound strengthens in value against the dollar.
This is all very well at an undergrad, mainstream classical economic normative dogma level, but it just doesn't cut it in understanding current political economy. It is pure tautology.
First, inflation - which most certainly is
not the reason for the interest hike, just the long-standing pretext -- has not just "jumped", it is engineered to appear that way. And of course, even inflation figures are systematically re-rigged when convenient: consider the way Gordon Brown did so in December 2003 when he switched from the old RPI inflation index, which was looking dangerously high, to the CPI. [Just as with the re-classification of unemployment figures: the 2.6 million on "disability benefit" being excluded from unemployment measures].
For around a hundred years, since the U.S. took over from Britain the Empire role, Britain has consistently maintained as a fundamental matter of policy (and with U.S. agreement), actually without exception, an interest premium over U.S. rates [the origin of Britain's move from a manufacturing-based economy to a finance-based one, a policy aggressively pursued by every UK government since, accelerated during the Thatcher years], which allowed for the emergence of The City and guaranteed a share of monetary re-cycling from the rest of the world that might otherwise go to the U.S.
U.S. interest rates have been increasing steadily since 2003, when they were a historically low 1 percent, and are now over 5 per cent, with more increases imminent [despite the collapse of the property market] to fund its trade deficits [zooming up to 1 trillion], budgetary deficits [ditto], and national debt [8 trillion]. All of these increases are
always pre-matched by Britain to maintain its preferential premium. There's nothing mysterious about any of this, you just have to examine the actual policies and practices, along with the historical record, to ascertain all of this, though you first have to guillotine all of that inherited classical economic dogma, the normative fantasies daily broadcast by media and powerful interest groups.
Britain has had a "mis-placed sense of wealth for decades", nothing new being reported here: it totally depends on the virtual financial economy, including recurring "over-heated house prices". In fact, hiking rates will further guarantee an even bigger property crash.
2stepfan said:
It'll be down to 1.85 in three months
Again, are you just making this up as you go along? On what basis will it be "down" in three months? Based on all the forecasts I've seen, and - more fundamentally - global exchange-rate trends vis-a-vis the dollar and unchanged U.S. domestic and foreign policies, the pound sterling will be ABOVE 2 bucks in three months. I can guarantee this
[Just as the Euro, the Yen, the Swiss Franc and many other currencies will be above their current rates against the dollar].
The U.S. is heading for meltdown, as we've known since 2003 ...
3underscore said:
Please tell me more of this elite self-interest driven executive cabal. It sounds like a very fun interpretation of the BoE MPC (and actually wrong on many levels) that I would really like to hear about.
Aren't you even capable of doing your own research?
It's got nothing to do with "fun", whatever that irrational, conformist nonsense is; it is how that institution operates.
