KG wrote:
The problem isn't with the Euro, but with Sterling which is a basket case currency, and made worse every time Gordon Brown opens his mouth. Britain is borrowing money at the sort of rates that if you or I were to do it, we would be heading for bankruptcy and it is lowering interest rates which causes a run on the pound.
None of this has anything whatsoever to do with Cyprus's decision to adopt the Euro. Cyprus previously had the Cyprus Pound which was independent of Sterling and the exchange rate against Sterling had risen and fallen over the years. The lowest level it reached would equate to a Sterling/Euro exchange rate of 1.025. We are still a long way from that. Nevertheless we are a long way also from the 20 year average which would equate to approximately 1.30.
Could the exchange rate hit parity with the Euro? Yes. Will it? My instincts say no as the disparity is hurting Eurozone members too. The only reason Brown is faffing around the world trying to get more responsible countries to lower their exchange rates is to try and protect the pound.
The problems are world wide, caused initially by greedy American bankers, but exacerbated in Britain by reckless borrowing on artificially inflated house prices. Giving tax breaks to the poor who will thus buy stuff (probably mainly imports) and lowering interest rates to encourage yet more borrowing are hardly solutions likely to have more than a momentary effect. The problems are deep seated and will take a few years to resolve.
Cyprus is a cash based society and not riddled with the same debt problems that afflict the UK. Its people will pull in their belts a couple of notches and weather the difficulties. And here in Cyprus it is not sun we want, during one of the mildest Novembers I can remember, but rain ... and lots of it.
None of this has anything whatsoever to do with Cyprus's decision to adopt the Euro. Cyprus previously had the Cyprus Pound which was independent of Sterling and the exchange rate against Sterling had risen and fallen over the years. The lowest level it reached would equate to a Sterling/Euro exchange rate of 1.025. We are still a long way from that. Nevertheless we are a long way also from the 20 year average which would equate to approximately 1.30.
Could the exchange rate hit parity with the Euro? Yes. Will it? My instincts say no as the disparity is hurting Eurozone members too. The only reason Brown is faffing around the world trying to get more responsible countries to lower their exchange rates is to try and protect the pound.
The problems are world wide, caused initially by greedy American bankers, but exacerbated in Britain by reckless borrowing on artificially inflated house prices. Giving tax breaks to the poor who will thus buy stuff (probably mainly imports) and lowering interest rates to encourage yet more borrowing are hardly solutions likely to have more than a momentary effect. The problems are deep seated and will take a few years to resolve.
Cyprus is a cash based society and not riddled with the same debt problems that afflict the UK. Its people will pull in their belts a couple of notches and weather the difficulties. And here in Cyprus it is not sun we want, during one of the mildest Novembers I can remember, but rain ... and lots of it.
where did this mass hysteria come from that it`s cyprus`s fault that all of a sudden stirling has gone down the toilet! "the masses are the asses" springs to mind 
