Brexit and the Consequences

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Old Oct 20, 2017, 6:55pm   #4001
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Old Oct 20, 2017, 8:28pm   #4002
 
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Originally Posted by FXX View Post
Hi Atilla

France and Germany will gain and the UK will lose! Obviously you didn't get enough fresh air!

Total exports to the UK for 2016 from the EU

Germany 88bln
France 35bln
..
..

Some sectors will be more affected than others but one thing is for sure, the biggest hitters are not items that can easily be switched out for EU equivalents.

On a scale of 1 to 10 where 10 is catastrophic I would place Brexit impact as a 4 on a no deal.


Brad
Lots of numbers to digest there and it boils down to that one argument Brexiters cling to. We have deficit in trade with EU and WTO will hurt them more than us and somehow collecting extra revenue give the UK an advantage. This is a fallacy of an assumption and a very simplistic one to make because:

The man who buys BMW, Merc or Audi or the French and Italian cars will continue to do so. In fact Metropolitan police prefers to buy the more expensive BMW cars because they are more reliable and cost of ownership outweigh the higher price.

As mentioned before the other one that we'll be able to source stuff cheaper from else where, ignores key point that suppliers prefer to compete on product differentiation not on price and thus prices will rise in proportion to currency fluctuations to maintain current price parities.

Underlying business economics is too much in depth analysis and difficult to compute and put forward to mass public the simple cartoon type single points, which resonate well. You have gone into some lengths pulling out those numbers.

If you are genuinely interested in the analysis look at UK export and import numbers post WWII to UK joining EU 1972 and then compare change in trends.


It will be of academic interest to watch carefully what happens to UK trade & BoP should it fall out of EU due to tory incompetence. Hope that EU will fall apart is just wishful thinking. On the contrary deterioration of the UK trade numbers will only further strengthen France and Germany. The stakes are very high indeed.


As for rating the damage to UK industry, I'd say a hard brexit with WTO rules will be a 6-7 out of 10 over a 20 year period.
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Old Oct 20, 2017, 8:36pm   #4003
 
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It appears that the UK's chief export will be rose-colored glasses.
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Old Oct 20, 2017, 10:00pm   #4004
 
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Originally Posted by dbphoenix View Post
It appears that the UK's chief export will be rose-colored glasses.
Yes indeed, objective business analysis has gone out the window replaced with hte media circus's biased politicians bull **** which the public slurps up if it matches their level of intellect.

I believe Parliament has the best civil servants and access to brains in the world. Instead we are led by blabber mouthed buffoons pursuing political ambition and money above national interest. That goes for TM too. In or out no one knows what she believes. Plays angles to keep herself in power.
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Old Oct 20, 2017, 10:53pm   #4005
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Originally Posted by Atilla View Post
Lots of numbers to digest there and it boils down to that one argument Brexiters cling to. We have deficit in trade with EU and WTO will hurt them more than us and somehow collecting extra revenue give the UK an advantage. This is a fallacy of an assumption and a very simplistic one to make because:

The man who buys BMW, Merc or Audi or the French and Italian cars will continue to do so. In fact Metropolitan police prefers to buy the more expensive BMW cars because they are more reliable and cost of ownership outweighed higher price.

As mentioned before the other one that we'll be able to source stuff cheaper from else where, ignores key point that suppliers prefer to compete on product differentiation not on price and thus prices will rise in proportion to currency fluctuations to maintain current price parities.

Underlying business economics is too much in depth analysis and difficult to compute and put forward to mass public the simple cartoon type single points resonate well. You have gone into some lengths pulling out those numbers.

If you are genuinely interested in the analysis look at UK export and import numbers post WWII to UK joining EU 1972 and then compare change in trends.


It will be of academic interest to watch carefully what happens to UK trade & BoP should it fall out of EU due to tory incompetence. Hope that EU will fall apart is just wishful thinking. On the contrary deterioration of the UK trade numbers will only further strengthen France and Germany. The stakes are very high indeed.


As for rating the damage to UK industry, I'd say a hard brexit with WTO rules will be a 6-7 out of 10 over a 20 year period.

Assumptions are on both sides of the argument, not just leavers. You for example are assuming Germany and France will be better off but you can't offer any evidence to support that claim. The same can be said for suppliers who are in the hands of the buyers who choose price over differentiation for most common goods. Lidl is a perfect example of this where their only differentiation is price and their success speaks for itself. Differentiation on the supplier side only becomes important when dealing in luxury goods.

There are 195 countries in the world and 127 are operating a trade deficit. It's normal and thanks to countries like Japan, China, India and a number of others, it isn't going to go away.

Looking at trade numbers after WW2 is not going to provide support to the eu debate. It was the golden recovery globally and the only reason the UK didn't come out stronger and was forced to join the EU was because of debt, inflation, and the socialist agenda that crippled our economy. If we had proper leadership we probably would never have joined the EU and today you would probably be debating how bad the EU is and how glad you are not part of it.

We dont need to be part of the block to enjoy prosperity. Much of the best technology emerged from the UK yet we are constantly being talked down like we will fall off a cliff if we leave. If the EU is so good then why did they fail to recognise the flaws in their system. They invented the euro and showcased it as the solution to prosperity.

Taking Spain as an example. 9 years after they slipped into crisis they are still struggling. They have broken the current account deficit convergence criteria and have to decide if they raise taxes or cut costs at a time when they need to be spending on growth. They are forced to do this as part of the requirements that were poorly thought out.

An economy that goes through a recession typically leans on mechanisms to aid recovery such as currency devaluation and interest rates. In a currency union you can't do that. The EU is on the verge of raising rates but Spain needs to keep them down. The mechanisms to deal with crisis are transformed into mechanisms that deepen crisis. Germany dealt with this using internal devaluation through wage reductions but this hasn't worked in other countries that have a weaker manufacturing base. Internal devaluations don't work so the euro zone is never going to enjoy the sort of growth that could be possible and it will always leave members exposed to crisis.

The next phase of this eu project will be its undoing. They seem to believe their issues can be solved by deeper integration. This worked in the USA where everyone speaks the same language with no differences in culture across states. If someone from New York moves to Texas then he/she won't be perceived as an immigrant but rather an American. You can't get this in the eu so integration is much harder and makes the locals uneasy. If a USA state has a budget crisis then the federal system can loan money to assist recovery. The EU doesn't have this mechanism so countries have to lend from the IMF with very strict conditions that make it even more difficult to recover.

The rise of the right across Europe is going to be unstoppable as deeper integration removes more control and immigration alters a country's identity. Brexit, Germany has a coalition with far right, France got close to far right power, Austria now has a far right leader. The list goes on as the unease of what's happening grows. Southern Europe is going to be a problem aswell as they seem to be feeling the brunt of African migration and stale growth. Why would anyone want to remain in a sinking ship is beyond my compression.

We have set the scene for the next major crisis following 10 years of cheap money. Stock markets globally are at all time highs and there is still a lot of bad debt around. Personal debt is off the scale and any significant bump in interest rates is going to set in motion another deleveraging cycle except this time countries have no money for bailouts and a major bank going down will ignite a bomb. The last place we want to be is in the EU when this happens because we will be the ones that has to bail out poor EU countries.

Brad
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Old Oct 20, 2017, 11:07pm   #4006
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Quote:
Originally Posted by FXX View Post
Assumptions are on both sides of the argument, not just leavers. You for example are assuming Germany and France will be better off but you can't offer any evidence to support that claim. The same can be said for suppliers who are in the hands of the buyers who choose price over differentiation for most common goods. Lidl is a perfect example of this where their only differentiation is price and their success speaks for itself. Differentiation on the supplier side only becomes important when dealing in luxury goods.

There are 195 countries in the world and 127 are operating a trade deficit. It's normal and thanks to countries like Japan, China, India and a number of others, it isn't going to go away.

Looking at trade numbers after WW2 is not going to provide support to the eu debate. It was the golden recovery globally and the only reason the UK didn't come out stronger and was forced to join the EU was because of debt, inflation, and the socialist agenda that crippled our economy. If we had proper leadership we probably would never have joined the EU and today you would probably be debating how bad the EU is and how glad you are not part of it.

We dont need to be part of the block to enjoy prosperity. Much of the best technology emerged from the UK yet we are constantly being talked down like we will fall off a cliff if we leave. If the EU is so good then why did they fail to recognise the flaws in their system. They invented the euro and showcased it as the solution to prosperity.

Taking Spain as an example. 9 years after they slipped into crisis they are still struggling. They have broken the current account deficit convergence criteria and have to decide if they raise taxes or cut costs at a time when they need to be spending on growth. They are forced to do this as part of the requirements that were poorly thought out.

An economy that goes through a recession typically leans on mechanisms to aid recovery such as currency devaluation and interest rates. In a currency union you can't do that. The EU is on the verge of raising rates but Spain needs to keep them down. The mechanisms to deal with crisis are transformed into mechanisms that deepen crisis. Germany dealt with this using internal devaluation through wage reductions but this hasn't worked in other countries that have a weaker manufacturing base. Internal devaluations don't work so the euro zone is never going to enjoy the sort of growth that could be possible and it will always leave members exposed to crisis.

The next phase of this eu project will be its undoing. They seem to believe their issues can be solved by deeper integration. This worked in the USA where everyone speaks the same language with no differences in culture across states. If someone from New York moves to Texas then he/she won't be perceived as an immigrant but rather an American. You can't get this in the eu so integration is much harder and makes the locals uneasy. If a USA state has a budget crisis then the federal system can loan money to assist recovery. The EU doesn't have this mechanism so countries have to lend from the IMF with very strict conditions that make it even more difficult to recover.

The rise of the right across Europe is going to be unstoppable as deeper integration removes more control and immigration alters a country's identity. Brexit, Germany has a coalition with far right, France got close to far right power, Austria now has a far right leader. The list goes on as the unease of what's happening grows. Southern Europe is going to be a problem aswell as they seem to be feeling the brunt of African migration and stale growth. Why would anyone want to remain in a sinking ship is beyond my compression.

We have set the scene for the next major crisis following 10 years of cheap money. Stock markets globally are at all time highs and there is still a lot of bad debt around. Personal debt is off the scale and any significant bump in interest rates is going to set in motion another deleveraging cycle except this time countries have no money for bailouts and a major bank going down will ignite a bomb. The last place we want to be is in the EU when this happens because we will be the ones that has to bail out poor EU countries.

Brad
Thanks Brad, we have been trying to re-educate Atilla and the other remoaners for the longest time. No harm in persisting I suppose, but don't expect a conversion anytime soon
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Old Oct 21, 2017, 7:08am   #4007
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I reckon all those kids have more sense than you. They know whats coming.. Another thing, they are young enough to be able to vote with their feet, later on.
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Old Oct 21, 2017, 10:22am   #4008
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It appears that the UK's chief export will be rose-colored glasses.
. . . and the EU's chief export will be blinkers.
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