Brexit now = CETA +/-?

[Dave Rice]

So, please tell me, just what is the Brexiteers plan for the future of the country?

Not some airy fairy sunny uplands crap, detail is what is required now. And what will the ramifications of those plans be? Again, detail. How long will it take to put these plans into action? Who is actually be doing the planning? Last weeks economic expert reckoned that the country would be better off with a fall in the pound. He also thought that we’d be better off if Sterling rose. So no downside economically then?

Will Steve need an international driving licence next summer, will his insurance be valid? What about medical treatment? Will he need a visa? Should be be buying his Euros now? That what we mere mortals need to know just to plan our next holiday.

[The VFM Addict]

Dave Rice wrote:

So, please tell me, just what is the Brexiteers plan for the future of the country? Not some airy fairy sunny uplands crap, detail is what is required now. And what will the ramifications of those plans be? Again, detail. How long will it take to put these plans into action? Who is actually be doing the planning? Last weeks economic expert reckoned that the country would be better off with a fall in the pound. He also thought that we’d be better off if Sterling rose. So no downside economically then? Will Steve need an international driving licence next summer, will his insurance be valid? What about medical treatment? Will he need a visa? Should be be buying his Euros now? That what we mere mortals need to know just to plan our next holiday.

I share your criticisms of what May has done.   No clear plan.   Pathetic negotiation skills, etc.  The only logical route was to go ‘No Deal’ from the day Art50 was triggered and then negotiate back from that if the EU wanted a deal.    This half-in, half-out, let the EU take the lead approach is what has caused the chaos not the Leave Vote.   Actually the ERG has published its plan.   So its there to see if you want.

The simple approach for ‘mortals’ is to get an International Driving Permit; its £5.50 from selected Post Office branches.    As for whether or not to buy Euro’s now; that has always been a question long before Brexit because currency markets have always been in a state of constant flux.    Moving on, strangely, even while we were an EU member the advice was still to get Medical Insurance when travelling so nothing has changed there either.     The only new unknown is whether or not Visas will be required.   I can’t answer that for certain but I suspect it is remote given that many non-EU countries have Visa-free access to EU states.    The reality for all ‘mortals’ is that the world is always changing and mortals must face up to such and not expect things to stay the same forever.

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During the Covid-19 Epidemic I will be wearing a mask and goggles while posting so that if I become infected I won't spread it to you.

[Dave Rice]

Please can you provide a link to the ERG plan? There is a plan for keeping the Irish border open. Well I say a plan but it’s based on fantasy.

I have no problems adapting to change, I have had two instantly physically life changing incidents to deal with. I have lived with disability for the last 37 years. I also have to live with the fact that the establishment doesn’t see me as disabled enough to warrant the help I need even though my doctors disagree with them. I have seen those goal posts move further and further away. So I don’t need any patronisation about dealing with change, what I need are proper facts about what that change will be so I can deal with them appropriately.

It’s seems it’s like a religion, you must have faith and not ask awkward questions.

[Wheels-Of-Fire]

Oop he’s at it again, head for the shelters, the sky is about to fall again (Cant’t be much of it left by now though). In a triumph of Ideological self-placement  Philip Hammond has lept on the latest IMF predictions of doom. When was the last time he did that ? Oh yes, every time. Can anyone remember the last time they were right about our economy ?

[The Duke]

I’ve not contacted my insurer for about 4 weeks. I wonder if they yet have any idea on how car insurance is going to be handled. Already got my int car licence.

Still don’t think we will leave though .

[JayCeeDee]

The VFM Addict wrote:

Dave Rice wrote:

Will Steve need an international driving licence next summer, will his insurance be valid? What about medical treatment? Will he need a visa? Should be be buying his Euros now? That what we mere mortals need to know just to plan our next holiday.

The simple approach for ‘mortals’ is to get an International Driving Permit; its £5.50 from selected Post Office branches. As for whether or not to buy Euro’s now; that has always been a question long before Brexit because currency markets have always been in a state of constant flux. Moving on, strangely, even while we were an EU member the advice was still to get Medical Insurance when travelling so nothing has changed there either. The only new unknown is whether or not Visas will be required. I can’t answer that for certain but I suspect it is remote given that many non-EU countries have Visa-free access to EU states. The reality for all ‘mortals’ is that the world is always changing and mortals must face up to such and not expect things to stay the same forever.

 

That doesn’t anwer Steve’s issue with Insurance. It’s not Medical Insurance, as you say, that’s always recommended, but the new equivalent of the old “Green Card cover”. Not even the brokers that he’s asked know whether he’ll need to buy extra to cover it from March 30th next year, or who’ll supply it.

 

Edit – started posting this 2 hours ago and got distacted. Steve’s added more between then and now.

[Ed P]

Graham, it does not matter whether the IMF are ‘right’. There are far too many different pundits saying that a Hard Brexit will be a disaster.

The numbers of voices matter as it becomes a self-fulfilling prophecy as far as financial markets are concerned, they will bet on a £1=1$ outcome with all the negatives on cost of living that will bring. Currency is 100% based on confidence – if the confidence is not there the pound in your pocket will not even buy a potato.

Even if long term a Hard Brexit by some miracle is good for the Fractured Kingdom of Britain, it will take years of penury to work our way out of the hole.

[Wheels-Of-Fire]

And if our chancellor thinks the same then it is a very good reason for him to keep his gob shut ! He really is willing to undermine our position just to keep his EU dream alive.

[Dave Rice]

I heard a good rebuttal of the no-one can know forecasting. I cannot predict the outcome of the Premiership fixtures on Saturday, if I did I’d be down Ladbrokes now. But what I can do is look at the league and especially with past performance in mind have a good stab at it. Will West Ham beat Chelsea? I suspect I will be more pessimistic than BL.

Everyone knew that Osbornes predictions of gloom were as ridiculous as the over optimistic ones on the other side. Ignore the extremes, common sense tells you that we will lose, it’s just a question of buy how much. We are going to have to run quickly just to catch up with what we have, never mind improve on it. It will be super easy to piss off the supply chain businesses.

We are losing already, I’ve just had another CCTV price rise to pass on due to the performance of sterling. Laptops are up by about 10% too.

[The VFM Addict]

Dave Rice wrote:

I heard a good rebuttal of the no-one can know forecasting. I cannot predict the outcome of the Premiership fixtures on Saturday, if I did I’d be down Ladbrokes now. But what I can do is look at the league and especially with past performance in mind have a good stab at it. Will West Ham beat Chelsea? I suspect I will be more pessimistic than BL. Everyone knew that Osbornes predictions of gloom were as ridiculous as the over optimistic ones on the other side. Ignore the extremes, common sense tells you that we will lose, it’s just a question of buy how much. We are going to have to run quickly just to catch up with what we have, never mind improve on it. It will be super easy to piss off the supply chain businesses. We are losing already, I’ve just had another CCTV price rise to pass on due to the performance of sterling. Laptops are up by about 10% too.

Can’t argue that you’ve had price increases due to the performance of sterling.   I’m not sure you can put that all down to Brexit and am totally certain that even if it were all down to Brexit it would still be a tiny swing.    Tell me, Dave, do you put the fall in sterling from 1974 to 1985 a drop from around $2.40 to $1.07 down to us joining the EEC (as the EU was then) in 1974?   Either way joining the EEC in 1974 certainly did sterling no favours.   August 1992 we were back up to $1.99 and six months later by Feb 1993 we were back down to $1.42.    So Maastricht also appears not to have helped sterling.  Take a look here and run your mouse over the chart to see the rates at each point.

The reality is that swings since the Brexit vote are tiny compared to most historical swings, especially the massive drop we suffered in the first ten years of joining the EEC.   $2.40 to $1.07 is a big drop.   The drop we’ve seen since the Brexit is nothing given that before the vote most economists were saying that sterling was about 13% to 15% overvalued and no-one was even expecting a Leave result.    I say again look here it puts the swing since the Brexit vote into perspective.

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During the Covid-19 Epidemic I will be wearing a mask and goggles while posting so that if I become infected I won't spread it to you.

[The Duke]

But what we lost in the past has zero bearing on today. All these swings are based on either rebalancing of the pound or uncertainty, or a run on the pound.

We could see a run in the pound if things get more uncertain, however depending if fears overblown (or not), it will end up where it ends up, by re balancing itself. The question is, where is that? No one can know that, cos of the uncertainty factor and that human arnt rational beings, we just cant predict such things long term.

It will drop, the question is will it rebound. And if so how long. I recon well be lucky to be on an 1:1 with the dollar come 24months  time. In 12 months we will be about 1:0.9,and about the same with the euro.

I very much dount the pound will be better than it has been of late, which is hardly stellar.

But as I said, we just can’t forecast for the longterm. We could find out it’s great out of trh EU and we are back to the highs of 1:2 on thr usd but I very much doubt either. That ship long sailed.

[Dave Rice]

Let’s just remind ourselves it was an immediate large drop, not the normal movements you get from economics at work. It was totally due to the reaction to the vote and it has not recovered. If the Govt screws up the deal it will fall again. It is hard to see what policies proposed by the Brexiteers will see it rise.

Perversely the FTSE 100 does well because the large corporate there are more linked to the dollar. However that increase in wealth only goes to the few, not the many. Like Jacob Rees-Mogg and the other ERG millionaires and not those in the North East or other areas in need.

[Ed P]

Exchange rates are a complex subject, but mainly they are based on future performance expectations for the UK as quite a large percentage of exchange rate transactions will be forward cover for foreign currency purchases and sales.

In the absence of real support for a Hard Brexit traders think that Sterling is under-valued present. It all depends on the Political Conferences at the moment. Both Labour and Conservatives have the potential to swing the market in either direction. If Corbyn throws his hat in the ring for a second referendum it could result in a huge gain for Sterling, while an unlikely win for the BoJo/Mogg fundamentalists could cause a melt-down.

[Wheels-Of-Fire]

Anyone remember the ERM ? The speculators had a field day with that one. Another attempt to link sterling to Europe that saw the pound fall through the floor. Mr G Brown spent Billions in public money trying to prop up his Euro dream and the speculators kept taking it until he ran out of cash.

[Ed P]

That was ‘leverage’ in action. Market speculators only have to put down a fractional amount of their gamble, the rest only becoming due on settlement day. It was in this manner that people such as George Soros made their killing wheras the Tories led by John Major cost the country £37Billion by gambling the wealth of the country on not raising the Bank’s base rate from 10 to 15% in order not to lose the forthcoming election to TBLiar.

[Wheels-Of-Fire]

I may be mis remembering this but wasn’t sterling decoupled from the pound in your pocket at one point during the 1970s ?

[Dave Rice]

It’s the same thing, are you thinking of devaluation? That happened in 1967.

[Wheels-Of-Fire]

No I thought it was something about the pound being so dodgy at the time that the government guaranteed sterling on the foreign exchange markets but didnt do the same for the cash in your pocket. A lot of fuss was made at the time about having pounds sterling. Was there any other kind ?

[The VFM Addict]

I know a few folks will baulk at the site this article appeared on but nonetheless it is an interesting consideration of Thatcher’s position on Free Trade and the EU.

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During the Covid-19 Epidemic I will be wearing a mask and goggles while posting so that if I become infected I won't spread it to you.

[Ed P]

I’m afraid VFM that all this talk of trade omits the one major factor. You have to have a product that people want to buy. Germany has about four times the export trade to China that we do,

In 2016 Germany exported $1.25T, making it the 3rd largest exporter in the world, and I seem to remember that Germany is in the EU!

We would be a lot better off if the Rees Moggs of the Tory party invested in Britain instead of off-shore.

 

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