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Whats The Uks Biggest Risk At The Mo - 2016?

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I would say the large current account and budget deficit.

Followed by the still oversized finance sector.

Then Id put Brexit.

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I would say the large current account and budget deficit.

Followed by the still oversized finance sector.

Then Id put Brexit.

+1

The EU is hell bent on self destruction. Every measure they take to solve Europes difficulties only exaserbates the original problem. It seems that our leaders are all suffering groupthink insanity.

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I'd say the secondary effects of brexit - EU turmoil and more importantly overcompensating for brexit with insanely loose central bank policies pushing debt bubbles to new highs and a major sterling correction following this.

Edited by Si1

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+1

The EU is hell bent on self destruction. Every measure they take to solve Europes difficulties only exaserbates the original problem. It seems that our leaders are all suffering groupthink insanity.

It's founded in fears of a factionist war-torn past, so legitimate in that respect. Edited by Si1

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I would say the large current account and budget deficit.

Followed by the still oversized finance sector.

Then Id put Brexit.

The government is borrowing more than 5% of gdp so that the country can grow at less than half that. The UK has the third highest deficit in the EU (higher than Greece). The idea that Brexit is a bigger threat is completely absurd.

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The government is borrowing more than 5% of gdp so that the country can grow at less than half that. The UK has the third highest deficit in the EU (higher than Greece). The idea that Brexit is a bigger threat is completely absurd.

Historically, the defecit is not particularly high nor is the debt. The Brexit risk is that both the deficit and the debt will become higher.

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The real risk is if we don't leave the EU, and Carney said so.

Actually Carney said there was a risk if we leave and a risk if we stay in, he covers all bases. Worth every penny of his sallary.

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I would say the large current account and budget deficit.

Followed by the still oversized finance sector.

Then Id put Brexit.

Short term: Brexit. By short term, I mean nearest risk that could manifest. The damage would be long term.

Medium term: consumer debt

Longer term: govt debt

I'm not so worried about a large financial sector. It makes money. It's in international demand. The City is a classic case of successful business clustering - the financial equivalent of Silicon Valley.

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I would say the large current account and budget deficit.

Followed by the still oversized finance sector.

Then Id put Brexit.

Growing numbers of people with less to spend and unable to borrow....falling demand mainly due to can't pay won't pay and refuses to pay....... Falling values rising prices, means little investment because who will be left to pay the price/debt?....

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EU GDP $18.5 tn (2014 actual)

China GDP $13.9 tn (2016 estimate)

I think the difference is the EU is a bit of basket case economically ie the ECB has been fighting deflation for years and will probably continue to do so for quite a while, China economy is v.important globally.

Disclaimer, amateur economist at large :ph34r:

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I think the difference is the EU is a bit of basket case economically ie the ECB has been fighting deflation for years and will probably continue to do so for quite a while, China economy is v.important globally.

Disclaimer, amateur economist at large :ph34r:

I think deflation is an issue throughout the developed economies not just the EU. The Chinese economy is historically dependant upon the EU and other western economies buying their stuff.

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What probability do you put on this and any timescales?

Thanks

85%

<12 months

I love it that it's derided as unimportant.

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I think deflation is an issue throughout the developed economies not just the EU. The Chinese economy is historically dependant upon the EU and other western economies buying their stuff.

If/when Yuan devals (20-40%) this will launch a (are you ready for metaphor of the year?) Poseidon Adventure-sized tidal wave of deflation on the West.

Effect on shares, corp bonds, property, industrial commodities?

Effect on quality govt bonds?

Edited by Killer Bunny

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Short term: Brexit. By short term, I mean nearest risk that could manifest. The damage would be long term.

Medium term: consumer debt

Longer term: govt debt

I'm not so worried about a large financial sector. It makes money. It's in international demand. The City is a classic case of successful business clustering - the financial equivalent of Silicon Valley.

More like the financial equivalent of the Mafia but with fewer scruples.

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If/when Yuan devals (20-40%) this will launch a (are you ready for metaphor of the year?) Poseidon Adventure-sized tidal wave of deflation on the West.

Effect on shares, corp bonds, property, industrial commodities?

Effect on quality govt bonds?

Genuine question - how do they devalue the Yuan - isn't China desperately doing everything it can to keep the Yuan artificially low already. And now they are enforcing currency controls to stop Yuan leaving the country doesnt this increase its value even more?

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Genuine question - how do they devalue the Yuan - isn't China desperately doing everything it can to keep the Yuan artificially low already. And now they are enforcing currency controls to stop Yuan leaving the country doesnt this increase its value even more?

i believe central banks just do what they want :wacko: like last August when the yuan was devalued for 3 days in a row http://www.theguardian.com/business/2015/aug/14/china-halts-yuan-devaluation-with-slight-official-rise-against-us-dollar

I seem to recall the DAX having a massive dump during that period as well....

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check this out https://en.wikipedia.org/wiki/Currency_war

quote

"A €60bn per month quantitative easing programme was launched in January 2015 by the European Central Bank. While lowering the value of the Euro was not part of the programme's official objectives, there was much speculation that the new Q.E. represents an escalation of currency war, especially from analysts working in the FX markets. David Woo for example, a managing director at Bank of America Merrill Lynch, stated there was a "growing consensus" among market participants that states are indeed engaging in a stealthy currency war. A Financial Times editorial however claimed that rhetoric about currency war was once again misguided.[97][98]

In August 2015, China devalued the yuan by just under 3%, partially due to a weakening export figures of -8.3% in the previous month.[99] The drop in export is caused by the loss of competitiveness against other major export countries including Japan and Germany, where the currency had been drastically devalued during the previous quantitative easing operations. It sparked a new round of devaluation among Asian currencies, including the Vietnam dong and the Kazakhstan tenge"

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Whats The Uks Biggest Risk At The Mo - 2016?

Assuming that means to the economy - because the biggest risk to the entity called the UK and the past culture of the people associated with the UK currently seems to be the eu (and its penchant for yet another treaty).

Defence seems better outside of the eu (or at least certainly no worse) because being partly dependent on decisions made by an organisation like NATO seems to be a more reliable situation than being dependent on a hotch potch of nations (the eu) who for instance couldn't agree on a balanced decision on Greece's bailout/bailin etc problems and who all had a pretty negative say resulting in the feeble outcome in the "negotiations" with the UK for the UK referendum. Imagine what it would be like trying to get them all to agree on effective joint action and effective support to defend an individual eu nation.

Then if it's the economy one currently has to ask which part of the economy. The average person or the "1%".

One has to suspect that the eu is going to be best for the 1% and their high density population, congestion, cheap labour, massive debt, money printing and decisions made elsewhere and outside of the UK etc policies.

Leaving the eu the average person is going to stand a chance of balancing things up a bit economically rather than the relentless decline in relative living standards in the UK compared to other countries some inside and some outside the eu - all as already evidenced by the UK's unbalanced economy, the increasing congestion, the relative decline in the GDP per Capita figures over the years along with the increasingly crazy house prices etc all under the eu.

Edited by billybong

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Genuine question - how do they devalue the Yuan They sell it or buy something else.

- isn't China desperately doing everything it can to keep the Yuan artificially low already. No. God no. It rose for 20 years.

And now they are enforcing currency controls to stop Yuan leaving the country doesnt this increase its value even more? If just 5% of the population took out $50k China would have zero reserves.. So, no.

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  • The Prime Minister stated that there were three Brexit options available to the UK:   65 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


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