my post gives a good example of why brexit is good
https://steemit.com/brexit/@cryp/post-brexit-pound-value-drop-is-actually-good
RE: What does the Brexit really mean? For the rest of us.
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What does the Brexit really mean? For the rest of us.
Well ok, your premise is that the dollar value drop of GBP was good because it causes Americans to buy UK made products.
You can devalue your currency without leaving the EU, you just print more of it.
China does this all the time and it's one reason why they have become the manufacturing capital of the world.
When a country does this, it harms the people who hold rely on that currency to feed themselves and their families and strictly favors the businesses that are doing foreign trade. It mostly harms businesses that are bringing local products to a local market. Although it can help them in the long term, because this does make foreign imports a tad more expensive.
China softens the blow to their citizens, by having an internal and an external currency. The external currency when devalued does not flood the local market. It is instead sent to the US where they buy "future dollars" via the process of holding treasury bonds. This is where we get the myth, that we owe some debt to China we can never repay.
Sure we can, we just issue Tbills with a negative interest rate, and convert existing bonds at maturity.
Yes there will be less dollars, but each one will be far more valuable.
This undoes some of the damage to our own economy that the we have allowed the chinese to do to us by devaluing their currency, while still technically having a "preferred trading partner" status, despite china buying essentially no US made goods.
We can only do that while the US Dollar remains the world's reserve currency though.
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my premise is not to flood the UK market as the cause of devaluation. but just that the EXTERNAL markets are devalued. again not flooding the local markets. so it has nothing to do with 'printing more' nor should it. britains ecomomy actually improved with the dollar devaluation and that had nothing to do with 'printing more'. which is what my article stated.
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No you misread what I'm saying.
I realize that you view the GBP dropping against the dollar on the external markets as a good thing.
I don't disagree with that.
I also acknowledge that you are correct that it was not the result of printing more money.
My point was that currencies go up and down in value. The world responded to the UK leaving, by devaluing the currency. This is in part because the world viewed the UK involvement in the European Common Market as a very important part of the longterm value of the GBP.
People who "hold money to make money" have no priced in UK sans EU (hopefully), and the UK can move forward with whatever.
Totally agree on this.
However, if the UK just wanted to make it's exports more attractive, they could have just devalued their currency on their own. Nations have the right to determine how much of their currency they choose to circulate, and in a truly open, global and free economy. This is how sovereign nations control the wealth of their citizens. For good or evil. Printing and burning cash, are what nations do once they adopt a central banking system.
It's not so much what they do that is the problem, but who is in control of those systems and what are their motives?
Perhaps a better way to put it is as a simple question.
Does the Crown own the Bank of England, or does the Bank of England own the Crown?
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The Bank of England was nationalised in 1947 - it's owned by the British taxpayer and is accountable to Parliament, and the Treasury appoints all the top personnel.
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