Ukip And The Bnp

[Sebrof]

I think it is pretty clear that the UK is a better optimal currency area than the Euro area.

 

I had not heard of 'optimal currency areas' before. Very interesting. Thanks for passing on the notion.

 

I wonder whether, in time, groups of people in similar industries could claim to be like optimal currency (sort of virtual) regions - just as much as if they were gathered around some particular national / geographical emblem or location. People in similar industries with similar interests may have more in economic common than other people who happen live in the same country.

 

From my perspective, exchange rates (therefore national interest rates) and different national tax regulations add to the cost and uncertainty of selling stuff. One big currency for everyone and proper double tax agreements across the board is the way to go IMO.

 

Of course, having only one currency in the United States has been disastrous. It's no doubt why they are one of the poorest countries in the world.

 

S

[Cambon]

Cambon - you are talking rubbish.

 

I wish I was, in the case of much of it, but unfortunately, I am not. It is so.

[La_Dolce_Vita]

The collapse of confidence in the banking sector was caused by the threat of nationalisation, not the financial crisis (although the banks are partly responsible). Everyone started to pull their money out of banks (Feb 09) and caused the biggest, steepest drop in the uk banking sector ever. HSBC was not affected as badly being foreign owned.

 

But the financial crisis, which I think the banks had a large responsibility in causing, preceded this 'pulling out of money' to which you refer.

 

Just finding your perspective on things hard to understand. Do you not see the ploughing of public monies into the banks as a necessary step? Do you believe it had little to do with the crisis?

[Cambon]

Of course, having only one currency in the United States has been disastrous. It's no doubt why they are one of the poorest countries in the world.

 

S

That is actually a very good example of how one currency does not work. The economic divide between rich areas (large US cities) and poor areas (agricultural mid-west and much of the deep south) is vast.

[Cambon]

But the financial crisis, which I think the banks had a large responsibility in causing, preceded this 'pulling out of money' to which you refer.

 

Just finding your perspective on things hard to understand. Do you not see the ploughing of public monies into the banks as a necessary step? Do you believe it had little to do with the crisis?

 

The financial crisis has been caused by the combination of a wide variety of things. Amongst many other things, the bush administration literally legislated the sub-prime issue in the usa, that had knock on effects for banking world wide. The UK's regulators failing to control the uk banks caused subsequently caused the banking crisis, but that is just a part of the problem.

 

In the uk, Gordon Brown's unrealistic low inflation combined with low interest rates caused the housing bubble. This and the drying up of credit caused the current negative equity situation (which is still unfolding but makes the 90s situation look tame).

 

The drying up of credit also stopped banks from lending to businesses causing some to close, some to lay people off, all of which pushes up unemployment, puts pressure on people's ability to pay off mortgages and loans. The current legal position on bankruptcy and voluntry insolvancey is laughable. When the money is written off, who picks up the tab? The bank of course, putting even more pressure on them.

 

The above hardly scratches the surface of the problems, but to say it is all the bank's fault is totally and utterly wrong.

[La_Dolce_Vita]

What I can gather from all that you say is that you believe that governments are largely or almost responsible for the problems with finance over the past few years. Am I wrong?

Yet such an analysis would seem to be a view I have never heard. The blame has been largely focused on the lack of regulation and inevitabilities of problems when markets are 'liberalised' - such as credit bubbles.

 

What I don't understand, is why you believe that nationalisation is wrong. After the public has ploughed money into the banks to keep them going or smooth out serious issues, why should this ownership not remain?

[Sebrof]

Of course, having only one currency in the United States has been disastrous. It's no doubt why they are one of the poorest countries in the world.

 

S

That is actually a very good example of how one currency does not work. The economic divide between rich areas (large US cities) and poor areas (agricultural mid-west and much of the deep south) is vast.

 

And you think that if the rural areas had their own currencies, they would be rich like the cities?

 

A difficult thesis to support, methinks.

 

S

[Sebrof]

What I can gather from all that you say is that you believe that governments are largely or almost responsible for the problems with finance over the past few years. Am I wrong?

Yet such an analysis would seem to be a view I have never heard. The blame has been largely focused on the lack of regulation and inevitabilities of problems when markets are 'liberalised' - such as credit bubbles.

 

Oh come on. Most informed people blame a combination of poor regulation (ie: government) and incompetent and greedy bankers.

 

Alsitair Darling is ludicrously trying to claim that regulation was not a factor. Why? Because he and the PM were in charge of regulation.

 

G

[Cambon]

Of course, having only one currency in the United States has been disastrous. It's no doubt why they are one of the poorest countries in the world.

 

S

That is actually a very good example of how one currency does not work. The economic divide between rich areas (large US cities) and poor areas (agricultural mid-west and much of the deep south) is vast.

 

And you think that if the rural areas had their own currencies, they would be rich like the cities?

 

A difficult thesis to support, methinks.

 

S

Not at all. However, the economic divide would be much worse if the USA was not a republic. Because it is a republic, each state sets it's own taxes and laws (to a certain extent), which helps to offset the problem. If the US was like the UK where everything is centrally taxed and legislated, it would break up (like the USSR did).

[Sebrof]

Of course, having only one currency in the United States has been disastrous. It's no doubt why they are one of the poorest countries in the world.

 

S

That is actually a very good example of how one currency does not work. The economic divide between rich areas (large US cities) and poor areas (agricultural mid-west and much of the deep south) is vast.

 

And you think that if the rural areas had their own currencies, they would be rich like the cities?

 

A difficult thesis to support, methinks.

 

S

Not at all. However, the economic divide would be much worse if the USA was not a republic. Because it is a republic, each state sets it's own taxes and laws (to a certain extent), which helps to offset the problem. If the US was like the UK where everything is centrally taxed and legislated, it would break up (like the USSR did).

 

I don't think the sales tax really makes that much difference. And it changes so rarely that you can hardly suggest it is used to regulate the economies of the individual states.

 

The breakup of the USSR had very little to do with a single currency. Nothing at all, in fact.

 

S

[Cambon]

What I can gather from all that you say is that you believe that governments are largely or almost responsible for the problems with finance over the past few years. Am I wrong?

No. They are largely responsible.

Yet such an analysis would seem to be a view I have never heard. The blame has been largely focused on the lack of regulation and inevitabilities of problems when markets are 'liberalised' - such as credit bubbles.

Governments control the regulations. In the case of the US, Bush's government legislated that banks had to lend to people who would never be able to pay the money back. In the land of the free everyone should have the opportunity to own their own home.

What I don't understand, is why you believe that nationalisation is wrong. After the public has ploughed money into the banks to keep them going or smooth out serious issues, why should this ownership not remain?

I don't necessarily believe that. However, part of the reason that the banks are in debt is because of the public defaulting on debt repayment. It could be argued that the public are partially bailing themselves out!

[Cambon]

I don't think the sales tax really makes that much difference. And it changes so rarely that you can hardly suggest it is used to regulate the economies of the individual states.

 

Sales tax is nothing to do with it. Their income is taxed both centrally and by the individual state. In simple terms, a very similar situation to IOM, except we call them "rates". If you chose to live in Douglas, it costs you more than if you live in Port St. Mary. So over here, since living in a specific area is by choice, they don't call it a tax. (Don't get me started on that or we will be on the TV tax before you know it!)

[Ringwraith]

I thought that the banking crisis was engineered by the regulations dreamt up and imposed by the Bank of International Settlements under the Basel I and Basel II agreements.

[La_Dolce_Vita]

I don't necessarily believe that. However, part of the reason that the banks are in debt is because of the public defaulting on debt repayment. It could be argued that the public are partially bailing themselves out!

 

But those who defaulted are largely or almost wholly those who really had little chance of paying the monies back in the first place. And given the abilities of the finance sector to make evaluations on people's abilities to handle credit they did not lend responsibily.

 

And though MANY people did default, not EVERYONE did, not everyone had credit.

 

(Happily) I don't have any in-depth understanding of finance and the workings of the finance sector, but what seems pretty clear to me is that the general public has bore the brunt of this massive fuck-up that the banks, and as you say the government, are to blame for.

 

Well frankly, if ordinary people have had to take the hit then let them maintain what ownership has come from bailing out the banks. If risk is going to spread around and the bucks stops with everyone, then don't let the profits of these banks be kept in private hands.

[Sebrof]

I thought that the banking crisis was engineered by the regulations dreamt up and imposed by the Bank of International Settlements under the Basel I and Basel II agreements.

 

No.

 

S