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Comment by walrus01 | Hacker News Reader

Maybe the economic ramifications of Brexit were not fully thought out before everyone decided to vote for it.

The Euro and Yen and almost all currencies are also down significantly vs the dollar, so I don’t think this is a Brexit thing. This is a strong US dollar thing as the world grapples with collateral shortages and a relative dollar shortage.

Edit: I highly recommend the podcast “Eurodollar University” on the subject.

In the last 60 days, the GBP has slid from 1.20 EUR to 1.09 EUR, fwiw. It definitely looks like something other than a strong dollar.

EUR sliding against USD as well, right?

Yes which implies the pound is sliding against the dollar significantly faster than the euro, at least the last 60 days.

So almost 10% drop relative to the Euro in addition to both of them falling against the dollar. I wonder what's behind that particular weakness for the pound.

The government just announced tax-cuts backed by borrowing, so likely to increase inflation even further.

But isn’t inflation usually an effect that happens after such an event, rather than something that’s being speculated on?

Unless large institutions decided to sell their pounds, but that has to be a huge supply of pounds to make such an impact.

People with money don’t wait for it to become worthless…

If you can reasonably expect something to be worth less in the future after new information emerges, wouldn't you sell it and buy something else?

Brexit plus a completely bonkers set of tax cuts. The UK will vastly increase borrowing, to give a tax cut to high income people. The markets are unimpressed.

I'll admit I thought this was the kind of thing that impressed the markets? (or at least the people who make the market turn the way it does)

On the other hand the USD is also nearing a really high value relative to CAD

Wow, finally someone that I find on a web forum also willing to utter the words "dollar shortage" during this time.

Big props to Jeff and Emil for their generous freely available teachings. I further recommend their paid subscription too. It's well worth it.

These times are easy to see coming if you had the right monetary lens on.

Ok, so what happens next then?

Continuing a globally rough pace of growth until economists wake up and remake the broken monetary plumbing system.

Cheers to that! I'm super hopeful that the next thing the economists do will totally smooth things out, for good this time.

The market is going to go down a little more, then way up.

But the GBP is down on all those currencies, too. Whatever other countries are experiencing, the U.K. is getting it double.

the almost comical resignation of several politicians at the time which resulted finally in the confidence of parliament resting on the shoulders of a an unaccountable buffoon certainly led me to assume the decision had all the ramifications of rolling a pinless grenade into a packed bus. the hubris that followed in not immediately or eventually working to overturn the mistake however has led me to conclude england intends to burn itself to the ground before it capitulates to admitting a mistake.

The latest crash in value is a direct result of two things last week -

The Bank of England monetary policy committee deciding on Thursday to show “restraint” in only putting the interest rate up by 0.5%, because they want to wait and see what the Chancellor’s “mini-budget” would bring on Friday.

That mini budget being a clusterfuck of unfunded tax giveaways to the already high-earning and wealthy.

So people are suspecting collusion between the government and Bank of England?

Personally I suspect incompetence on both sides, rather than collusion or any intent.

Of course it wasn’t thought out. It was a knee jerk reaction primarily based on gut feel about immigrants for the most part. Can’t lock yourself out in a globalized world and really can’t be a country (without basically having metaphorically medieval infrastructure) without globalization.

This was primarily driven by a 5% tax cut for the richest UK tax payers, totally unfunded.

It was annoying that you couldn't really figure those out because no one at the time knew what deal we'd get. Now we know I feel it would be democratic to ask the people - so this is the deal what do you think? But apparently that is impossible - you have to buy an unknown and be stuck with it for decades.

True. Considering Euro is going up against dollar after UK is ejected from EU.

Corona and poor energy policy + Putin war was not on the radar when the vote was made. It’s easy to be the smart one in hind sight.

Maybe this has nothing to do with Brexit, but more with energy prices and Tory tax cuts. As far as I know, not a single doomsaying Brexit prediction has come to pass.

Really? I have trouble spotting a doomsaying Brexit prediction that hasn't come to pass at this point.

Well, Scotland hasn’t left the UK (insert Homer Simpson “so far” gif here).

> Maybe this has nothing to do with Brexit, but more with energy prices and Tory tax cuts.

Most likely all of it. No decision is made in a vacuum, and all of them are compounding factor. In retrospect, the timing for Brexit was pretty bad (on top of it being a stupid idea badly implemented).

> As far as I know, not a single doomsaying Brexit prediction has come to pass.

Funny thing is, I have a hard time thinking of a prediction that did not materialise, from the fall in both imports and exports, the divergence in standards to ensure that trade will never be smooth again, the increase in red tape and bureaucracy, the government openly discussing tearing down the Good Friday agreement, the relaxing of environment protections, to the lorries queuing in Dover.

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