Tag Archives: Euro

Re-Moaners and Trump’eters

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Re-Moaners and Trump’eters respective terms for Remain campaigners in Brexit and Donald J Trump supporters

Another few weeks drift past and yet the same issues which seem to have been in the news all year, remain.

The US never-ending election still has over 3 weeks to run and just when you think the behaviour and approach of both camps can’t get any worse, they manage to achieve it. If it’s not sexual abuse allegations, it’s more leaked emails. I pity the American voter. I thought our choice this side of the Atlantic was pretty bad, but the candidates there look appalling.

I watched the clip of Gary Johnson who is apparently also standing as a Libertarian Party candidate – I mean really? Over five years into a civil war in Syria and this man who wants to be President of the most powerful nation on earth, does not know what Aleppo is.

At least Trump and Clinton have managed to answer some questions on the subject. It’s not unusual for foreign affairs (not the sexual kind) to play little part in a US election, but one might have expected that confrontations with Russia over Syria, Ukraine and Crimea, to have some impact. Likewise, relations with China over the Spratley Islands rather than ridiculous notions of simplistic arguments over manufacturing jobs in the US should have some policy. It remains completely unreported what either candidate’s plans for North Korea are. Better not ask Trump, but his rhetoric can’t be worse than the accusations from US Security services that NK was behind the Sony attack.

What still amazes many commentators, is that Trump is still popular with large swathes of the US electorate despite all the gaffes. It demonstrates how unpopular Clinton is, but more importantly, how upset many American voters are with the established political class which Clinton embodies.  Here we have some of the parallels with the UK EU debate, despite the referendum.

Although there is an element of the moaning bad loser side in some of the pronouncements from what was the remain side, many did set out the risks to the economy an no-vote would bring. Several senior economists have stated that the currency changes that we have seen since end of June were a long overdue correction to Sterling’s position just exasperated by the vote for exit and on-going uncertainty of what that means. In the percentages shown everything is referred to the currency position post 23rd June, failing as usual to mention that Sterling’s value had risen significantly in the lead up to the vote.

The Euro’s value over 5 years from here shows a different story than the headlines might have you believe. On 19th Oct 2011 the exchange rate was 1.14 and it closed on 14th Oct 2016 at 1.11. In particular, the rise of the pound in 2015 and the lead up to the vote is dramatic. US Dollar to Sterling is a significant fall over the same period 1.57 to 1.21 and the comments on reserve currencies should be concerning, but at the same time interest rates have been signalled upwards in the US, and stay the same or lower in the UK. That does not help Sterling investors. By the way, Euro to US Dollar has gone down from 1.37 to 1.11 in the same time period.

I have picked an arbitrary period but some of us can remember much better and worse Pound to Dollar rates. It reached a low of 1.05 in February 1985 after the ERM fiasco, and was as high as 2.11 in November 2007 as sub-prime crashed the dollar

What do we learn from that brief history? Currencies fluctuate, sometimes by a lot, and thousands of traders around the world make money doing that.

Final discussion for today is on Credit Rating Agencies and their comments. Yes the same folks that branded those sub-prime investment funds as AAA, are doing all their warnings on where the pound might go next. All the discussion is based on what the UK might do as if what might happen in the Euro, (How is Greece by the way and Italy, Portugal, Spain?) will have no impact. Remember Euro zone and other EU exports to the UK, exceed UK Exports to the EU – we both have a lot to lose if we are stupid and put in unnecessary tariffs. World trade will be damaged if Trump introduced tariffs to protect American jobs and cancels NAFTA. Likewise, what will be the impact on the dollar if Trump wins and implements that piece of rhetoric.

Guess what the pound might go up or down or sideways. Can we moan about currency traders instead?

For Oval Office satire try One Morning In The Office

Music and Musing – OK, The EU Referendum As Well

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My first creative writing outside school work was actually music lyrics. The words were my first artistic adventures and continued for many years. The few poems on this site are really lyrics for various songs that I have written over the years. Music still inspires me and has the power to move me like no other art form. I like to think I have a wide taste in genres from classical (including some opera) through to modern pop, although rap is a real effort whilst appreciating the skill of the lyricist.

I appreciate art, as in painting and sculpture, in the same way, but I do not find it moves me in the same way as music, likewise theatre. I did write a short story, Landscape, with art as the background attempting to convey my love of some paintings. Musical theatre does have that impact, whereas opera tends to get lost for me except the odd aria. Probably the language barrier but also the variations in the notes – a complaint I have with much Jazz.

The language barrier (not necessarily the artistic barrier – ignore the Eurovision song contest) of course applies to our European colleagues, the focus of much of the debate in the referendum. There is not just a language barrier but also a cultural and legal one. Many European countries have a legal system based on Roman/Napoleonic basis, (France and other codified legal systems) or are federated states (UK has devolved power to Scotland, Wales and Northern Ireland but not England) as opposed to common law based on precedent with juries. The EU is codified leading I believe, to many of the clashes we have seen with the ECJ and the slow but creeping codification of the UK’s laws driven from the EU – a background driver for the sovereignty debate i.e. where UK precedent can be overruled by a codified European Court causing a codified change to UK law.

I remain undecided. I have written before about my concern with population growth. This issue is mixed up with immigration, asylum and the crisis facing the world (not just the EU) The increase in the world’s population is staggering

Population
World population

As is the UK’s from Migration watch but using ONS numbers

UK Pop
UK population Migration Watch

The future projections which are based on net migration levels plus the impact of the new population having children must be addressed. Regardless of what happens in the referendum, and associated immigration policy, the increases of the last ten years will have a major impact on schools, housing, healthcare, etc. for generations. More cars, more use of public transport, and it takes years to get infrastructure in place to cope from London airport runways to sewer mains.

I grew up at a time when the net birth rate was thought to be falling below 2, i.e. population decline. This has now reversed and we have added a massive increase in life expectancy which impacts the same things plus pensions but with a disproportionate impact on health and social care.

As with many undecided I am annoyed with the quality and tone of the debate making it very hard to decipher fact from fiction or forecasts or the real risks in either choice.

The In campaigners fail to talk about the impact of ever closer union (yes UK may have an opt out) when EU policy is pursued. Especially the efforts of Eurozone countries to support the currency. We will be outside (we already are) that decision process. i.e. if EU funds are used to support an in-crisis Eurozone country ahead of a non Eurozone country purely to help stabilise the Eurozone and prevent another crisis. I have just returned from Greece – that crisis has not gone away. The impact on the UK and the financial systems is there regardless of membership status. Outside the Eurozone the UK has zero ability to influence policy in or out. The only way we could would be to stay in and join the Euro! That is something that has been ruled out by most euro campaigners, which seems illogical if we really want to be at the table and have a say on the future of the EU.

The Out campaigners fail to address the risk and the economic forecasts, ignoring many supposedly qualified commentators. Albeit, being lectured by American bankers (Merrill Lynch) and other big businesses does not go down well. Of course economic forecasters are well known for their accuracy; from the IMF to the Treasury we can clearly believe everything they say. Growth rates, employment rates, financial products. That is sarcasm by the way, in case anyone thought that I think economic forecasting has a better success rate than weather forecasting beyond the next 24 hours.

The pleas from foreign leaders feel forced and in some cases (USA) hypocritical. Of course the USA wants the UK in the EU. It means there is some check from the UK on various EU proposals on trade, data and competition so that USA interests are protected.

For EU leaders, if you are so desperate for the UK to remain, Mrs Merkel, why did you not offer a better reform package to the UK when Cameron was running around Europe before the referendum was announced? Actually, why haven’t you reformed the EU thus making the changes needed before a referendum was called?

I cannot abstain. I believe in voting, there should be more of it. I just do not know what is the best decision, for me, my family, the generations to come and my country. I do believe that the EU would be a worse institution without the UK in it but would the UK be worse? I do not just mean economically, but worse in a generic sense. Would the UK be a worse place to live or better?  If someone can give me a clear answer to that and address the population growth issue (not just the immigration issue) I would be grateful.

Whatever the outcome of the vote, I can still write words and occasionally music. The paintings will remain in the galleries. Life will go on. The world will not stop and the 6.5 billion people who live outside the EU (with or without the UK) will continue to have their lives. The population will continue to increase, and the poor and scared will desperately seek a better life wherever that may be.