John McDowell and a run on the pound.

[ManOfSussex]

absolutely. however politicians dont normally announce "we're war-gaming our policies being rejected", because they have faith in their policy. its not that they are war-gaming thats odd, its the fact they are telling people about this particular one that is. if they were playing through consequence of policy as you suggest, the obvious reaction might be to change policy, but it isn't. hence an alternative conclusion.

Perhaps. What McDonnell actually said was this:

What if there is a run on the pound? What happens if there is this concept of capital flight? I don’t think there will be but you never know so we’ve got to scenario-plan for that. People want to know we are ready and they want to know we have got a response to anything that could happen. If we can demonstrate that, that will calm things down.

New Labour in 1997 had various scenario planning models too. It would be prudent for any opposition looking to win power and initiate a change of office to do the same. Labour acknowledge they need to provide assurance on their policies - policies some see as different, some see as very radical, but these are radical times we live in now. New Labour has been very unwell for some time, was moved to intensive care after the Brexit vote last year and the life support machine was switched off after the general election this year. Perhaps Labour will win the next election whenever it comes, perhaps they wont - if they do it was Conservative, Brexit voters such as yourself, that didn't do what that nice Mr Cameron asked, that also contributed to making it all happen.

 

[Brighton Mod]

Its the pretence of having a plan at all. Of course they have no plan or idea what to do if there is a 'run' on the pound, when asked about this Comedy Corbyn first said that he wanted an economy of investment and in the next sentence said he would be taxing big business and those who earn the most. Both the previous would the very people to invest, what an absolute fool, every time I hear him speak and actually say nothing he impress's me less.

 

[GreersElbow]

25 years ago was Black Wednesday remind me who was in government then

Wasn't that more to do with our currency immediately coming under attack when we left the ERM? It was just that we were too slow to raise interest rates, and when we did they were too little to stop the attack. There's also the element of not having enough foreign reserves to buy the £ in order to maintain a value.

Black Wednesday would have happened to any government choosing to float the £

 

[alfredmizen]

Wasn't that more to do with our currency immediately coming under attack when we left the ERM? It was just that we were too slow to raise interest rates, and when we did they were too little to stop the attack. There's also the element of not having enough foreign reserves to buy the £ in order to maintain a value.

Black Wednesday would have happened to any government choosing to float the £

I dont think you could have got that more wrong if you'd tried, black Wednesday happened because we were attempting to keep sterling within certain bands against the deutschmark, soros and other currency speculators surmised correctly that sterling was too weak to maintain these levels , so we're selling sterling at a rate of (purely a guess)2.40 , they thought that the BofE wouldn't be able to maintain support for sterling at this level , and that they would have to let it collapse , the BofE maintained a permanent bid all day of 2.40 and bought bilions upon billions at that level before eventually having to.let go whereupon it collapsed to around 1.98 (another wild guess I can't remember the real levels) whereupon they bought back their sterling and trousered the 42 pfennig profit.

 

[wellquickwoody]

Plus he's (John McDonnell) very approachable

He is an evasionist of the very worst fxxking kind, media, people, honesty, facts, whatever way you look at it

 

[The Birdman]

Quite obviously there will be a run on the pound if labour get in, lots of rich foreign investors in the City will bale out if they feel they won't be able to carry on screwing the country.

Also a lot of our rich footballers and singers etc will try and find ways of moving money out of the country and the brain drain will start again leaving the whole country poorer.i am an old fart and I remember these times in the past. When the money tree runs out and tax is over 50% this country will be totally broke. We should stop putting this country down.

 

[GreersElbow]

I dont think you could have got that more wrong if you'd tried

Am I? Because your summary below pretty much expands on my point about the currency coming under attack

,

black Wednesday happened because we were attempting to keep sterling within certain bands against the deutschmark, soros and other currency speculators surmised correctly that sterling was too weak to maintain these levels

As such, shorted the £

so we're selling sterling at a rate of (purely a guess)2.40 , they thought that the BofE wouldn't be able to maintain support for sterling at this level , and that they would have to let it collapse , the BofE maintained a permanent bid all day of 2.40 and bought bilions upon billions at that level before eventually having to.let go whereupon it collapsed to around 1.98

because we ran out of reserves....

People were selling the £ because they did not have confidence in it, as you stated - it could not keep within the band it was aiming for. Speculators begun shorting and herd mentality followed suit.

Currency speculators are looking for interest rates, if the Treasury raised interest rates, investors would be inclined to buy the currency and by laws of supply and demand, maintain a desired exchange rate.

 

[The Merry Prankster]

He is an evasionist of the very worst fxxking kind, media, people, honesty, facts, whatever way you look at it

I've had a couple of chats with him and found the opposite. Although I approached him in the spirit of genuine enquiry rather than one of hostility or trying to catch him out. Still, I expect you know best.

 

[vegster]

Also a lot of our rich footballers and singers etc will try and find ways of moving money out of the country and the brain drain will start again leaving the whole country poorer.i am an old fart and I remember these times in the past. When the money tree runs out and tax is over 50% this country will be totally broke. We should stop putting this country down.

I think that Labour are not going after high earners for more Income Tax more corporate and also giving people onerous hours contracts and those classified as " Self Employed " in order to avoid paying sick pay/NI etc.

Besides, I can't see this country getting much worse than it is now anyway.

 

[alfredmizen]

I think that Labour are not going after high earners for more Income Tax more corporate and also giving people onerous hours contracts and those classified as " Self Employed " in order to avoid paying sick pay/NI etc.

Besides, I can't see this country getting much worse than it is now anyway.

vegster , any chance you could answer post 38 on this thread mate ?

 

[alfredmizen]

Am I? Because your summary below pretty much expands on my point about the currency coming under attack

,

As such, shorted the £

because we ran out of reserves....

People were selling the £ because they did not have confidence in it, as you stated - it could not keep within the band it was aiming for. Speculators begun shorting and herd mentality followed suit.

Currency speculators are looking for interest rates, if the Treasury raised interest rates, investors would be inclined to buy the currency and by laws of supply and demand, maintain a desired exchange rate.

are you wrong ? Yes, yes you are , you said that the currency came under attack when we left the ERM , it didn't it came under attack to GET us to leave the ERM , a huge fundamental difference , and your point about us running out of reserves is quite simply laughable , it really is , as for currency speculators looking for interest rates , by its very nature an economy with high interest rates will be attempting to dampen things down , this certainly wasn't the case in 1992 , we did raise to 15%on the day but that still didn't work , mate , you're wrong , I was an FX trader for a Japanese bank for 5 years , you're wrong , simple as.

 

[alfredmizen]

I think that Labour are not going after high earners for more Income Tax more corporate and also giving people onerous hours contracts and those classified as " Self Employed " in order to avoid paying sick pay/NI etc.

Besides, I can't see this country getting much worse than it is now anyway.

You obviously have memory loss as well as the ability to ignore difficult questions if you can't remember the 70s and the winter of discontent and claim that you can't see the country getting much worse.

 

[GreersElbow]

are you wrong ? Yes, yes you are , you said that the currency came under attack when we left the ERM , it didn't it came under attack to GET us to leave the ERM ,

I never said it came under attack to force us to leave. Go back to the original post.

a huge fundamental difference , and your point about us running out of reserves is quite simply laughable

Am I? What were we selling to buy the £ to try and keep it at the desired level? https://www.theguardian.com/business/2012/sep/13/black-wednesday-20-years-pound-erm "Knowing Britain had a paucity of foreign currency reserves to sell, speculators such as Soros confidently moved in for the kill."

"whereas the weak country would have to draw down its foreign currency reserves..." http://aei.pitt.edu/7014/1/sevilla_christina.pdf

,

it really is , as for currency speculators looking for interest rates , by its very nature an economy with high interest rates will be attempting to dampen things down , this certainly wasn't the case in 1992 , we did raise to 15%on the day but that still didn't work

BECAUSE IT WASN'T HIGH ENOUGH. I don't think you even understand what you're trying to argue.,

mate , you're wrong

Wrong about what? You don't even know what you're arguing about
,

I was an FX trader for a Japanese bank for 5 years

Still means sweet **** all, I deal daily in FX in my job.

you're wrong , simple as.

You've created an argument yourself, refer back to the first section.

What I was wrong about, was the timing - I said that this happened after we left the ERM (Not forced to leave) when as a matter of fact, the event lead us to leaving the ERM.

 

[alfredmizen]

I never said it came under attack to force us to leave. Go back to the original post.

Am I? What were we selling to buy the £ to try and keep it at the desired level? https://www.theguardian.com/business/2012/sep/13/black-wednesday-20-years-pound-erm "Knowing Britain had a paucity of foreign currency reserves to sell, speculators such as Soros confidently moved in for the kill."

"whereas the weak country would have to draw down its foreign currency reserves..." http://aei.pitt.edu/7014/1/sevilla_christina.pdf

, BECAUSE IT WASN'T HIGH ENOUGH. I don't think you even understand what you're trying to argue., Wrong about what? You don't even know what you're arguing about
, Still means sweet **** all, I deal daily in FX in my job.

You've created an argument yourself, refer back to the first section.

What I was wrong about, was the timing - I said that this happened after we left the ERM (Not forced to leave) when as a matter of fact, the event lead us to leaving the ERM.

I didn't say you said it came under attack to force us to leave the ERM , I quoted you directly , you said it came under attack WHEN we left the ERM , the rest of your post is just an attempt at confusion , wow , you deal in FX daily in your job , that must make you a REAL expert , you ever have to trade the CAD ?

 

[wellquickwoody]

I've had a couple of chats with him and found the opposite. Although I approached him in the spirit of genuine enquiry rather than one of hostility or trying to catch him out. Still, I expect you know best.

Correct

 

[cunning fergus]

Perhaps. What McDonnell actually said was this:



New Labour in 1997 had various scenario planning models too. It would be prudent for any opposition looking to win power and initiate a change of office to do the same. Labour acknowledge they need to provide assurance on their policies - policies some see as different, some see as very radical, but these are radical times we live in now. New Labour has been very unwell for some time, was moved to intensive care after the Brexit vote last year and the life support machine was switched off after the general election this year. Perhaps Labour will win the next election whenever it comes, perhaps they wont - if they do it was Conservative, Brexit voters such as yourself, that didn't do what that nice Mr Cameron asked, that also contributed to making it all happen.

To some extent you are right that Brexit would be a driver for Labour under Corbyn gaining power, however it will largely be the young voters (previously disinterested in politics) that will get him over the line.

This will be a cohort that are broadly against Brexit, yet as we know will be voting for a party led by an individual who has no intention of remaining in the EU. Labour’s political objectives are virulently anti corporatist and that is why they are rightly stress testing scenarios such as capital flight.

Policies relating to nationalisation, corporate tax, abolishing PFI, restrictions on robotics and increasing workers rights are contrary to the political direction of the EU.

These young and dumb don’t get it because Labour is speaking about Brexit with a fork tongue, if they understood that we can’t re-nationalise utilities, rail and mail whilst in the EU then they might get it, but they don’t.

Hopefully Corbyn will get in before they do understand it.