Comments on: When does devaluation become a Sterling crisis?

By: Peter McClough

Peter McClough — Wed, 10 Sep 2008 14:10:17 +0000

You are a brave man to face England again! On my last passage through Stansted airport a few years ago I was stopped and told my bum bag counted as a piece of hand baggage and would have to be checked in. As it contained money and dox I protested strongly and a member of the security police said "I can have you arrested on the spot–" for protesting! Hence I was forced to comply! Not a friendly country to visit or to stay in!
There's a saying here going around – "The English are controlled because they like to be controlled". (words left out-ed) God help us! Give me the corruption of Spain any day rather than the subtle corruption in high places in England threatening to turn that country into a third world republic. How many pounds to the Zim dollar now?
Peter

By: mike stallard

mike stallard — Tue, 09 Sep 2008 17:40:22 +0000

We sold up in 2004. We had a Franquista casa in Lo Pagan, Murcia.
I regret that we took legal advice when we bought and lots of cash sort of went across the table.When we sold, sort of lots of cash went into the local bank too.
Complementario? No lo se.
Even then, in just a couple of years, a lovely village by the side of the mar manure turned into a concrete mess full of empty houses. YUK!
I suspect that (!VV Zapatero!) Spanish Socialism in getting like our own dear Trots.

By: Peter McClough

Peter McClough — Tue, 09 Sep 2008 08:57:13 +0000

Totally wrong! When were you in Spain last? Today, if you declare less than 80% of what the state decides is the correct value, the state has the right to buy the property at the declared price. If you declare more than 80% but less than the tax man's opinion as to value (even qualified lawyers cannot reliably ascertain the correct declaration value – and I speak from first hand experience!), you risk a complementario or in plane English a fine for underdeclaration. If you sell at a loss (as you will in today's market) the capital loss will not be recognised and you are fined. Full documentary evidence of payments is not considered sufficient as it is always assumed that there is a black element. Over declaration is often needed but the headache is trying to pursuade a foreign buyer to accept this as in England I believe they always declare the actual transfer value less legal costs(?).
Peter

By: mike stallard

mike stallard — Tue, 09 Sep 2008 07:18:21 +0000

Yes but when you buy, you only declare half the price!

By: Peter McClough

Peter McClough — Mon, 08 Sep 2008 20:34:47 +0000

After many years living in Spain, I look back at England through the TV and occasionally local papers. As a victim of the collapse of the English pound I deeply regret having assets in England and worse still illiquid property based assets included. Many say that I should have firesaled the English assets last year and saved 20% of my life savings. The only thing that keeps the English pound alive is national pride and it is important that they realise that they are now just a small island nation off the north west coast of Europe – not a world power. Currencies gain or lose value according to supply and demand and internationally the pound is being shunned by all. Regulation of financial services is a stanglehood on small financial firms but give a free rein to the big institutions. The current crisis has come about because of the greed and irresponsibility of big institutions initially in America. Moving to property, I have never been able to understand why people in England worry about a mere 10% fall in values when over here, property is selling at 50% of last year's value! England has the lowest transfer taxes in the world and I believe these have been abolished on property under £200,000(?). No wonder one could buy on Monday and sell on Thursday at a profit in the good days. Here we pay 10-12% transfer costs on every sale and if you make a loss, the tax man will not believe you and you will be fined!

By: Paul Craythorne

Paul Craythorne — Thu, 04 Sep 2008 20:59:21 +0000

I have over 3000 euros in a euro account with a major UK bank.

This is earning me no interest.

As the £ is falling against the euro should I now convert a large proportion of these euros to Sterling and place the money in my high interest Sterling account?

Reply: Under the law I am not allowed to offer investment advice from this site.

By: Adrian P

Adrian P — Wed, 03 Sep 2008 22:29:59 +0000

Boom and Bust are deliberately caused, ther Banks offer lower interest rates to het people hooked on thin air credit and worthless fiat paper money.
Then, when enough have been hooked, they raise the rates, hauling in the assets of those who have over extended themselves.

All those assets, homes, buisness, cars etc, all created out of thin air.
http://www.youtube.com/watch?v=XRLPG_HplrA

By: Patriotic Thinking

Patriotic Thinking — Tue, 02 Sep 2008 23:01:41 +0000

When all is said and done, a falling currency is merely a symptom of a weak economy. From here on in, the currency level should be understood as a prime indicator of our competitiveness. The only problem is as you say: floating exchange rates allow governments far too much wiggle room. You must keep banging on about this in the MSM. Only that way will the public begin to understand the implications of what is happening.

By: figurewizard

figurewizard — Tue, 02 Sep 2008 21:37:52 +0000

In almost exactly a year the pound has devalued against the dollar by 13% and there is as yet no signal from the markets that it will stop there. Unless the Bank of England follows its brief and starts to raise rates to defend it inflation will become a chronic feature of the economy. This must eventually lead to a substantial increase in wage demands, most especially from the public sector as the standard of living continues to fall. Factor in a housing market, which is more or less all that has accounted for economic growth over the last seven years and is now collapsing, together with a fractured and incompetent Labour government and the 1970s look set to make a comeback from the beginning of next year at the latest.

By: mikestallard

mikestallard — Tue, 02 Sep 2008 17:48:55 +0000

It only seems a couple of days ago that we were discussing much vaguer things like reducing the government's incontinent waste and expense, whether or not we should put inflation control before bank rates and so on.
Now we are getting down to the nitty gritty of how to stave off an immediate crisis caused, frankly, by complete incompetence by a divided and broke government.

I want to return to the original blog, if I may.

APL says, quite rightly, "Why not simply allow the market to evaluate the performance of an economy and assign a value to the currency of that economic zone accordingly. Currencies will float or sink according to the performance of the economy."

The government ought to be working full tilt to achieve this objective in this hour of "sterling crisis". It's the economy, stupid.
They ought to be doing, urgently, things that put the economy together again.
Like cutting waste on silly quangos. Like changing bureaucrats into people who are making the economy stronger instead of weaker. Like getting people back to work even if it means cutting the welfare. Like cutting taxes for people who are getting us the money from abroad. Like encouraging production and foreign earnings. Like giving the MBE to people who win us production abroad. There are a lot of things that a competent government could be aiming at achieving.

Instead they are answering the original question of whether this is a Sterling Crisis in the Sunny Jim Callaghan way:
"Sterling Crisis? What Crisis?"