A typical discussion between someone who understands a bit of economics and a kipper

Consider a typical kipper statement, copied straight from ukip HQ #brexit propaganda lies and watch the ensuing economic argument thoroughly smashed to bits. The argument started about an article in the Financial Times stating quite bravely that the UK, contrary to popular beliefs, might have done quite well out of joining the Euro zone when it was first launched in 1999. In fact Britain might have been a manufacturing powerhouse like Germany, profitably exporting quality industrial goods as well as London being no.1 in financial services globally? Please bear in mind that in Q2 2015 Britain’s current account deficit has taken another turn for the worse, just as kippers were predicting UK trading with the rest of the world was about to break even….

balance of trade

kipper: “In the Financial Times article it states that membership would have served the UK well in 2009 during that time but what about now when other member nations such as Greece and the former eastern bloc are pulling the currency into a longer term spiral? In terms of any trade deficit we can trade all over the world for goods, the trade under EU law doesn’t change even if we leave, our currency stayed strong in vital years of decline in the eurozone meaning we could trade in other parts of the world, we are not and should not be reliant on the EU for trade, there’s a whole world to do business with.”

So far a perfect kipper answer. Could be copied straight out of the #ukip #brexit handbook. Now watch my demolition job.

“My dear kipper friend: You say the euro is in “spiral decline”? So below are the historical Euro Dollar rates from the launch of the Euro in 1999 till today. Where’s the “spiral decline”? The exchange rate is still 30 dollar cents above its lowest point reached shortly after launching the Euro?  Like the UK punters saying the Euro was finished then, you’re obviously just engaged in wishfull thinking?

You mention “our currency (GBP) remained strong.” Don’t you realise that a strong Pound is hammering British exports? Do you not see how bad the balance of payments chart above looks? Now imagine global banks leaving the City in droves after the #brexit you crave: The UK’s credit ratings would plunge and Britain would have to devalue Sterling sharply or go bust.

Like most kippers who haven’t got a clue about economics, you confuse buying lots of stuff in places like China with global trade, but real trade means you buy as much as you sell abroad, so your current account remains balanced. What kippers don’t realise is that your Tory government has been selling the family silver for years to keep your dismally performing low productivity economy afloat. It’s just they euphemistically call it FDI (Foreign Direct Investment). Please [name withheld] stick to talking about things you understand.

eurodollar

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About lasancmt

Passionate about Identity Management Disgusted at #ukip and #brexit
This entry was posted in #brexit, EU, EURO, UKIP and tagged , , , , , , . Bookmark the permalink.

One Response to A typical discussion between someone who understands a bit of economics and a kipper

  1. lasancmt says:

    Here is an October 2015update.Sometomes it seems to me I am the only blogger worrying about ‘the other deficit’ but then the ‘Economist’ reassured me I am in very distinguished company

    http://www.economist.com/news/britain/21674792-how-worrying-britains-large-current-account-deficit-other-deficit

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