(June 29, 2016 at 12:32 am)Aractus Wrote: Look I fundamentally disagree. The GBP was already considered grossly overvalued, and had been for quite some time. I'm not talking semantics, it dropped to 1984 levels - so a person who moved from UK to USA in 1984 and was paid in GBP would actually say the opposite to you as time went on, they would say "hey this exchange rate is great, I'm netting more money than I would have under the exchange rate when I moved here". My point is whether you're paid in Currency or Gold Bullion its value can and will change, that shouldn't be unexpected or feared. The AUD reached parity with the USD in 2010, and maintained parity to 2013. It now trades at 0.74 USD. If you were an Australian paid in AUD, living in USA, and you were paid a decent salary of $65,000, your net income after tax would be about A$51,000 and from 2010-2013 that have equalled USD 51,000 - but today it would equal USD 37,740. A net loss of over USD 13,000 annually. And that has nothing to do with political of financial instability in our country, it's purely market-based economics.

I'll note that the AUD was considered by most economists to be overvalued when it reached parity - and even when it reached 90 US cents. It's currently undervalued really, but the fact is the market value for it at present is 74 US cents. I think Brexit forced a swift market correction for the GBP, I'm not an economist though, but as far as I can tell the Brexit vote didn't cause the GBP to fall much below its real value. Most economists I've heard on this issue said "correction" not" fall". The Euro is overvalued as well, again in the opinion of the financial experts, so if it were to take a hit for a market correction that's not an unexpected outcome either. So in a nutshell all I'm saying is that according to financial experts, with or without Brexit the GBP would have fallen to this level at some point anyway.

Didn't I say "I don't care to get into a stupid semantics argument with you"? End result for me is the same: either way, I've lost money. So people in this thread who are saying that the money isn't "gone" and it'll "recover" are spreading bullshit. For me to recover the amount of money that I'd have lost, the pound would have to recover to more than the value it was at previously, and stay there.

(June 29, 2016 at 9:49 am)Tiberius Wrote: Didn't I say "I don't care to get into a stupid semantics argument with you"? End result for me is the same: either way, I've lost money. So people in this thread who are saying that the money isn't "gone" and it'll "recover" are spreading bullshit. For me to recover the amount of money that I'd have lost, the pound would have to recover to more than the value it was at previously, and stay there.

I didn't say you care, nor did I say that I'm unsympathetic to any hardship you & Shell may legitimately face in the immediate future. The only point I wanted to make was that Forex is volatile and that the GBP was already overvalued. I'm not at all suggesting the currency will "recover" to the state that I just said was overvalued any-time soon (that would be disingenuous). But I would point out the AUD has fallen more (albeit over 3 years) with no volatile influences on "our end". At the end of the day free markets are free and will move, it will benefit some and, as in your case, disbenefit others.

The value of money is completely metaphysical (arbitrary) anyway. It is in the eye of the beholder. It is literally minted at will by worldwide governments to be used as a trading commodity against other trading commodities. As I mentioned before it is my opinion and you can disagree that you have not lost any money, but in saying that I want to be respectful and I hope you understand I mean that from my philosophy and understanding of economics - which I freely admit isn't great. I kind of look at it as a human fallacy to believe that systems well outside of their individual controls should stay "stable". I hope Tib you will agree to disagree.

I don't think that's what Tibbers was saying though. He wasn't saying that systems should stay stable (he in fact specifically said that yes fluctuation in the market is obviously normal), he was just saying he can never get back money that he has already lost. What's gone is gone, you know?

Yes and I was saying he hasn't lost a single GBP. And he and I will have to agree to disagree on that.

(June 29, 2016 at 10:54 am)Aractus Wrote: I didn't say you care, nor did I say that I'm unsympathetic to any hardship you & Shell may legitimately face in the immediate future. The only point I wanted to make was that Forex is volatile and that the GBP was already overvalued. I'm not at all suggesting the currency will "recover" to the state that I just said was overvalued any-time soon (that would be disingenuous). But I would point out the AUD has fallen more (albeit over 3 years) with no volatile influences on "our end". At the end of the day free markets are free and will move, it will benefit some and, as in your case, disbenefit others.

The value of money is completely metaphysical (arbitrary) anyway. It is in the eye of the beholder. It is literally minted at will by worldwide governments to be used as a trading commodity against other trading commodities. As I mentioned before it is my opinion and you can disagree that you have not lost any money, but in saying that I want to be respectful and I hope you understand I mean that from my philosophy and understanding of economics - which I freely admit isn't great. I kind of look at it as a human fallacy to believe that systems well outside of their individual controls should stay "stable". I hope Tib you will agree to disagree.

...and my point was, whether it was overvalued or not, I lost money. This isn't some opinion that we can "agree to disagree" on. Next month, my paycheck...for the *exact* same amount of money I earned this month, will convert to less USD by a *substantial* amount.

If my end salary in dollars in less than it was last month, I've lost money. End of story.

Well I disagree. Your trading commodity is simply worth less than it was previously. The UK does not mint USD, you must trade your GBP with someone willing to trade their USD. Spare a thought for steelworks, which have lost much more than that in recent years.

You can't "convert money", that is a fallacy. You can only trade it.

(June 29, 2016 at 11:35 am)Aractus Wrote: Well I disagree. Your trading commodity is simply worth less than it was previously.

...and because it's worth less, when I trade it to a currency that I can use, I get less money in return.

Honestly, this argument is nothing but semantics over what "money" actually is. This is precisely the reason I didn't want to argue it. You telling me that by some definition I haven't actually "lost" anything does not help my actual situation; it doesn't change the fact that I have less money in my wallet, and it doesn't make me feel better about the situation.

Can we perhaps discuss something else now?

Money is worth whatever society deems it is worth.
Humans have no inherent concept of the worth of money.
That is why one currency can be worth a lot, while another can be pretty much worthless.

Some time ago, GBP could afford you X things... now, it can afford you less than X things.
For now, this change in worth of GBP is purely speculative, but it may become real.

The speculation is that, with the potential exit from the EU, products from the UK will find it more difficult to compete with products from the EU. Less international sales of British products, leads to less willingness to purchase GBP in order to purchase those British products.
Supply and demand then factor in... less demand for GBP, for the same supply, leads to lower value of GBP. Yes, in these currency markets, value is attributed to the currency, in spite of what it can afford you in reality.

Add to that the fact that the Bank of England has announced that it would inject a considerable amount of GBP in the economy, to try and keep it flowing, and you see supply increasing, thus diminishing further the value of GBP.

Of course, this value of GBP is only relative to the rest of the world's currencies. GBP's worth in British products should remain similar, although it should factor in the requirement of purchases from other countries in order to manufacture those products.
You've heard of the problem that no single person on Earth can build a pencil, right? Lots of products require elements from other places, which are now relatively more expensive, thus leading to an increase in the price of British products to the British people, using GBP.
These effects can snowball, but will usually tend to an equilibrium for the currency in question.


Simultaneously, the world goes on. Other events unfurl and affect this or that currency. It is a dynamic system, with some checks and balances put in place by the governments, the banks, the insurance companies, or whatever...
Most "Liberals" would let the market sort itself out, with no checks and balances... methinks that would be a bad idea, but I know not enough to really form an informed opinion. (Am I showing my bias due to my background in a socialist country? [actually socialist, not communist disguised as socialist like the USSR])


(PS: this is all BS I just made up!)

(June 29, 2016 at 11:50 am)Tiberius Wrote:

(June 29, 2016 at 11:35 am)Aractus Wrote: Well I disagree. Your trading commodity is simply worth less than it was previously.

...and because it's worth less, when I trade it to a currency that I can use, I get less money in return.

Honestly, this argument is nothing but semantics over what "money" actually is. This is precisely the reason I didn't want to argue it. You telling me that by some definition I haven't actually "lost" anything does not help my actual situation; it doesn't change the fact that I have less money in my wallet, and it doesn't make me feel better about the situation.

Can we perhaps discuss something else now?

I suppose that I too have not lost any money, despite my accounts being 5 digits lighter in USD than they were last Thursday - no currency exchange required.