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Guest mSparks

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Guest mSparks

I said, right at the start of this Euro rally, smells like we're joining the Euro.

Well, this morning, for approximately 5 minutes at the start of trading, GBP/EUR was quoted at parity (actually 9999,10002), couldn't believe my eyes or I'd of made a killing - back down now to 0.7ish).

wonder what that will do to house prices - could all the losses be soaked up by devaluing the pound and switching to the Euro?

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I said, right at the start of this Euro rally, smells like we're joining the Euro.

Well, this morning, for approximately 5 minutes at the start of trading, GBP/EUR was quoted at parity (actually 9999,10002), couldn't believe my eyes or I'd of made a killing - back down now to 0.7ish).

wonder what that will do to house prices - could all the losses be soaked up by devaluing the pound and switching to the Euro?

Interesting question. It would be inflationary - food prices would rocket - we import far too much for it to not have a major effect. And there'd be no more hopping across the channel to pick up cheap French properties. Also, what would it do to the euro-economies?

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Why do people STILL think that near-parity between sterling and the Euro will somehow make the UK join the Euro?

Why?

Spain joined the Euro at a rate of 166 Pesetas to the Euro.

France joined the Euro at a rate of 6 or 7 francs to the Euro.

If the UK government and the EU decide to take this step, they will not base their decision on the exchange rate at the time. Any more than all the other countries did when they decided to join.

Once more for the stupid: you don't have to have a 1:1 exchange rate to join a currency union.

Edited by kingsgate

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Well, this morning, for approximately 5 minutes at the start of trading, GBP/EUR was quoted at parity (actually 9999,10002), couldn't believe my eyes or I'd of made a killing - back down now to 0.7ish).

Not in any charts I've seen; it's been hovering around 0.78 for a whie.

What trading platform are you using? It sounds like a glitch/spike to me. I doubt any trade you made at that point would have been honoured.

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I said, right at the start of this Euro rally, smells like we're joining the Euro.

Well, this morning, for approximately 5 minutes at the start of trading, GBP/EUR was quoted at parity (actually 9999,10002), couldn't believe my eyes or I'd of made a killing - back down now to 0.7ish).

wonder what that will do to house prices - could all the losses be soaked up by devaluing the pound and switching to the Euro?

The rate has nothing to do with this and certainly wasn't one of the original convergence criteria I recall being discussed in the 1990s with the ERM.

Beside it wouldn't fix anything in terms in terms of debt. If all Pounds were converted to Euros at 1:1, then if you owe £100k and are paid £20k gross, the debt is still 5 times your income.

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I wish we would join the euro. Parity will provide the perfect opportunity. When it occurs, lock the pound /euro ratio at 1:1 and make the euro fully legal tender here alongside the pound. Re-designate sterling currency as nominal euros and phase them out. It would be so much cheaper and easier to do it that way than at any other time, where there would have to be changeover date set well in advance, the confusion of dual pricing and a big stock of coins and notes for the big day.

One for those who wrongly think we are stupid - no, parity isn't necessary for acountry to join the euro but makes the process a lot simpler.

The only problem would be if interest rates differ vastly between the two zones.

Edited by Sofa Spud

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Interesting question. It would be inflationary - food prices would rocket - we import far too much for it to not have a major effect. And there'd be no more hopping across the channel to pick up cheap French properties. Also, what would it do to the euro-economies?

They'll be hoping over to the uk to buy them lol.

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I wish we would join the euro. Parity will provide the perfect opportunity. When it occurs, lock the pound /euro ratio at 1:1 and make the euro fully legal tender here alongside the pound. Re-designate sterling currency as nominal euros and phase them out. It would be so much cheaper and easier to do it that way than at any other time, where there would have to be changeover date set well in advance, the confusion of dual pricing and a big stock of coins and notes for the big day.

One for those who wrongly think we are stupid - no, parity isn't necessary for acountry to join the euro but makes the process a lot simpler.

The only problem would be if interest rates differ vastly between the two zones.

Are you nuts? Why not just wish for a 30% across the board tax hike?

I hope we never join the Euro - never mind at 1:1. I'm rather hoping the whole ghastly experiment will blow apart before our politicians jump on the idea of joining at parity by way of imposing yet another stealth tax.

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My best guess is the pound will be at 1.10euros before we join and people that put the euro down need only look at it's value to know they are being stupid.

the petroldollar will continue to have a drag on the pound and i can see the fiat $ having a full blown meltdown

Q it's good for america to have such a low dollar to help exports ! what home grown exports are we talking about or do you mean the jap rubish they stick a badge on to say it's made in the good old USA.

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No way Gordon the control freak is going to let go of the ability to tinker with the monetary policy. Or anything for that matter, after all he knows best and we cannot be relied upon to make our decisions on how to live and what to spend our money on.

A big dose of devaluation was one of the labour parties old favourite policies as a short term fixed to its love of spending our money and bunging its unions and public sector workers. BoE is warning of downside risk to currency and clearly will do nothing to support it (spending cuts and higher interest rates? I don't think it going to happen), so I think that's where we are going all over again.

I think the interesting debate is the reverse = as the Italian labour market swings heavily into a higher mix of retirees on big guaranteed pensions, budget deficit balloons and with no dominant political party to force tough medicine on the population (read same for Spain in a slightly different mix of problems), it is a question of whether the Euro can hold together in the medium term.

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Guest mSparks
Why do people STILL think that near-parity between sterling and the Euro will somehow make the UK join the Euro?

Why?

Spain joined the Euro at a rate of 166 Pesetas to the Euro.

France joined the Euro at a rate of 6 or 7 francs to the Euro.

If the UK government and the EU decide to take this step, they will not base their decision on the exchange rate at the time. Any more than all the other countries did when they decided to join.

Once more for the stupid: you don't have to have a 1:1 exchange rate to join a currency union.

I never said that near parity was a requirement, I was saying near parity would greatly increase the chances of joining the Euro.

One of the 'biggies' will be "if we dont join now the pound will only become weaker, so its in our interest to join".

I was asking if this kind of devaluation could be used to save the banks (who have large Euro holdings afaik) from going bust, and as such be a viable option (and something that appears to being done right now).

It could also hide the true nominal falls, since we live in a global environment, this way our houses have already devalued 12% in the last five months in Euro terms (ignoring the nominal drops by the likes of Nationwide/Halifax).

Edited by mSparks

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I said, right at the start of this Euro rally, smells like we're joining the Euro.

Well, this morning, for approximately 5 minutes at the start of trading, GBP/EUR was quoted at parity (actually 9999,10002), couldn't believe my eyes or I'd of made a killing - back down now to 0.7ish).

wonder what that will do to house prices - could all the losses be soaked up by devaluing the pound and switching to the Euro?

sorry but I don't see how this has any bearing at all on whether we are joining the Euro. There is no logic to this at all.

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I believe that we do not meet the national debt requirements to join the Euro. With a rapidly rising CPI, this too would be a problem in all likelihood.

I think Brown would like us to join, but I *seriously* doubt that this will actually be viable.

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I believe that we do not meet the national debt requirements to join the Euro. With a rapidly rising CPI, this too would be a problem in all likelihood.

I think Brown would like us to join, but I *seriously* doubt that this will actually be viable.

exactly. Joining the Euro would be suicidal at the current time - look at what happened to Ireland, Spain, etc. The actual exchange rate is entirely irrelevant.

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I believe that we do not meet the national debt requirements to join the Euro. With a rapidly rising CPI, this too would be a problem in all likelihood.

I think Brown would like us to join, but I *seriously* doubt that this will actually be viable.

It is more likely that the Euro will break apart with Spain, Italy and Ireland being forced out, than that we would join it.

It is a fundamentally flawed plan to try and synchronise hugely diverse economies into one set interest rate and currency values.

This is becoming clear as house prices crash in Spain and Ireland.

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I said, right at the start of this Euro rally, smells like we're joining the Euro.

Well, this morning, for approximately 5 minutes at the start of trading, GBP/EUR was quoted at parity (actually 9999,10002), couldn't believe my eyes or I'd of made a killing - back down now to 0.7ish).

wonder what that will do to house prices - could all the losses be soaked up by devaluing the pound and switching to the Euro?

if theres parity it wont make a diff to uk homes.

even if you look at them in euros there still vastly overpriced.,

110k e- scatty house in burnley.

110k e- nice villa in france.

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It is more likely that the Euro will break apart with Spain, Italy and Ireland being forced out, than that we would join it.

It is a fundamentally flawed plan to try and synchronise hugely diverse economies into one set interest rate and currency values.

This is becoming clear as house prices crash in Spain and Ireland.

At long last a good argument for putting the euro down.

myself i think europe as a whole is still better placed then the UK to weather any storm and do remember who's currency is going down and where the bank was that had a run by depositors.

Cheap labour from the eastern block means europe is better off because they don't need to import the labour by opening the flood gates like the goverment has done during the past 30 years in the UK.

Forget about all the rules of entry for the UK ! if Brown and the other thugs won't give us a vote on adopting the european constitution then they are hell bent on joining and the EU will pretend everything is just fine and allow the books to be cooked when it comes to the 3% GDP rules just like they have done time and again.

it's not just British MP's that are bent you know.

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I agree that Europe as a whole is better placed to weather the storm.

They will be hurt by exports falling, but borrowing rates are lower, savings rates higher, and they have less dependency on services.

The RMBS and CMBS never really got to the same level in Europe, which is one big reason.

Instead they use Covered Bonds (for example Pfandbrief in Germany), which give access to liquidity, but keep the risk on the balance sheet of the originating bank, so they need to write decent business, as the hold the credit risk long term.

Sounds like a good plan? Alistair Darling belatedly thinks so!

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One for those who wrongly think we are stupid

There are none ;)

- no, parity isn't necessary for acountry to join the euro but makes the process a lot simpler.

Which is why, er lets see, which previous eurozone entrants waited for parity before joining? Ummm...

The only problem would be if interest rates differ vastly between the two zones.

Agreed -- as long as we don't count structural economic differences, the stage in the business cycle, inflationary expectations, public sector debt, or the need to contribute gold or hard-currency reserves to the ECB...

If we ever join the euro it will be at whatever rate is acceptable to both the British and Eurozone monetary authorities. To pull a particular figure out of the air as some kind of target is ridiculous, and it's astonishing that so many HPCers are seduced by the idea.

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I believe that we do not meet the national debt requirements to join the Euro. With a rapidly rising CPI, this too would be a problem in all likelihood.

I was just thinking this. They would have to take on our national debt, and the worse our economy is the less of a good bet we will be to the Euro, I imagine.

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pound worth too much, our exports are too expensive :(

pound worth too little, we cant buy anything in :(

Cant seem to win!

Unless you look at it the other way round I guess

pound worth too much, we can buy everything we need :)

pound worth too little, we can export and kick start our manufacturing :)

glass half empty, or half full? Or maybe, like goldilocks, it has to be juuuuust riiight!

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It is a fundamentally flawed plan to try and synchronise hugely diverse economies into one set interest rate and currency values.

Flawed plan or otherwise, I firmly believe this has been the covert intention of Brown and Blair.

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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