News/ Info Sterling may be in trouble, but the euro's no safe haven

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TeamPlayer

Yellow Belt
The steep falls in the pound over the past few days are worrying for those of us who fear we could be heading for a full-blown sterling crisis. They have also given fresh ammunition to those who believe Gordon Brown should swallow his annoyance at the Germans and seek sanctuary in the single European currency. Nicolas Sarkozy is apparently contrived that we will join up, boosting the power of the eurozone - and, presumably, Sarko's ego.

With sterling heading towards parity with the euro, it's easy to see why proponents of membership, who have been awfully quiet until recently, have regained a voice. Unfortunately, it's much harder to believe it really is a panacea, even in the highly unlikely event that Brown would brave a caning from the electorate on the issue. The bigger question, with rioting on the streets of Athens, is whether the European currency bloc can hold together in the face of the crisis, the first major test it has faced in its short 10-year lifetime.

The credit crunch has exploded some of the mythology behind Brown's cold-shouldering of the single currency. He can no longer boast about the inherent superiority of the Anglo-American capitalist model over European social markets; our light-touch regulation does not now seem obviously better than the supposedly dead hand of bureaucracy there.

If we had a proper manufacturing industry, like the Germans, we might be better off; in hindsight it was foolish to rely on financial services, the over-inflated housing market and shopping.

Yet it is not clear that being part of the euro club would in itself have left us any less exposed; it definitely didn't help the Republic of Ireland, it didn't stop the excesses in the Spanish housing market, it hasn't stopped extraordinarily high youth unemployment in Greece, or the long-standing lack of competitiveness in Italy. Arguably, the housing bubble might have been even worse if we had been in, as we would have been unable to calibrate an interest rate response of our own. In the crunch, the European Central Bank has been slower to move on interest rates and is much less transparent than the Bank of England, since it is under no obligation to issue details of its decisions for 30 years - we get the minutes from Threadneedle Street within weeks.

Guardian
 

Webmasterserve

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The last time where was an opinion poll on UK joining Euro I think the was about 70% against it, I still thing quite a lot of people (including me) are against joining the Eurozone.
 

TeamPlayer

Yellow Belt
One thing though is that there'd be no exhorbitant charges like commissions when exchanging currency to go abroad (at least to the other Eurozone countries).
 

Webmasterserve

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You have a point there but for now rational reason, I still prefer that we have the Pounds.
Its boring for have the same currency as the rest of Europe :)

One thing though is that there'd be no exhorbitant charges like commissions when exchanging currency to go abroad (at least to the other Eurozone countries).
 

JLHC

Yellow Belt
I think that the UK must abandon Pounds if they want to survive this economy crisis. The Pounds's value is dropping everyday and it will definitely be on par with Euro one day.

There is no use in keeping Pounds just to maintain the English ego. Globalisation is affecting every country and if no changes are made, the UK may be heading for self-destruction.
 
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Webmasterserve

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I am confident we will not abandon Pounds, the current PM does not like it, I think the next PM even like it less.
I'm not quite sure globalisation is good thing either. Who does it benefit? The rich getting richer?
 

JLHC

Yellow Belt
We cannot stop globalisation. It doesn't matter who benefits as it is unstoppable. Even China is opening up so rapidly.

Of course unless the country plan to close their doors like North Korea? ;)
 
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Webmasterserve

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Perhaps there is a good side to globalisation, I am not fully convinced, maybe I am too skeptical.
What usually come to my mind when you talk about globalisation is that we in UK and other western countries get to buy things cheaply while people in China, India etc work their backside off for little money ... so that we can enjoy cheaper things here. All the crap job we don't want to do are "outsourced" to countries where things are cheaper (Mostly because they have lower labour welfare standatds etc).

I am sure there are good sides to globalisation, maybe I choose to see the nagative sides only.
 

JLHC

Yellow Belt
Well, at least these labors in the poor countries are able to earn a "little money". At least job markets are created and more job opportunities can be filled by the locals. If it is not because of globalisation, many people in poor nations may have died of hunger by now.
 
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Webmasterserve

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Ummm,
I will probably argue that necessity is the mother of invention, perhaps if not for globalisation, people in poorer nation would find a solution to their problems; develop their own drought resistant corn instead of buying from Monsanto.

Promote their own indigenous goods and services instead of buying ready made from developed countries etc etc.

I'm not saying globalisation is a complete menace, just saying at the moment, it benefits the developed countries much more than it benefits poor countries and some aspects of it is COMPLETELY CRAZY one example that come to mind is that a produce (can't quite rember what produce) that was grown is UK is flown to Kenya to be packaged and then returned to UK to be sold, it was cheaper to fly it to Kenya, have it proceed and then flown back to UK to be sold...... I think the is mad and damaging to the enviroment as well.




Well, at least these labors in the poor countries are able to earn a "little money". At least job markets are created and more job opportunities can be filled by the locals. If it is not because of globalisation, many people in poor nations may have died of hunger by now.
 

TeamPlayer

Yellow Belt
The plummeting pound will not be propped up by government intervention, ministers declared yesterday, as it emerged that they will simply hope Britain's beleaguered currency stabilises as broader measures to stimulate the economy begin to take effect.

Sterling has fallen to a series of record lows against the euro in recent days, and looks set to reach parity with the single European currency for the first time. Its fall has hit holidaymakers as well as the thousands of Britons living on the Continent, who have seen the value of pensions and savings plummet.

But ministers have made it clear no help will be forthcoming to stabilise sterling. The Europe minister, Caroline Flint, confirmed the value of the pound was not a "first-order issue" and Yvette Cooper, Chief Secretary to the Treasury, said bolstering the currency had never been the Government's aim.

Senior government figures are wary of mistakes made in the lead-up to Black Wednesday in 1992, when attempts by John Major's government to prop up the pound failed and led to a bill thought to be more than £3bn.

Independent
 
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