unbeliever Posted June 14, 2016 Share Posted June 14, 2016 (edited) So OUT could not actually mean OUT, but more like a "junior" or "associate member"? The plot thickens by the minute. The remain campaign are very clear that EU-lite (e.g. EFTA membership) is not what they want. But they are not empowered to set government policy following a Brexit vote. This has been generally understood for some time. We've been through it a fair number of times on this thread. It will however be very difficult for the government to pursue EFTA membership when the remain campaign will be understood to have gained a mandate to reject it. ---------- Post added 14-06-2016 at 12:33 ---------- No, it's perfectly logical in trading terms: the gilts offer a safer haven than most other forms of instruments (so money in more volatile areas is currently flocking to gilts due to uncertainty and eroding confidence), and the general outlook on base rates and inflation (the two main components of gilt market pricing) is that they're going to stay low/moribund in the short term at least. I'm crossing my hear and telling you that if the cost of borrowing for the government were rising right now, I wouldn't present that as evidence of a lack of confidence or of certainty in the future financial position of the UK, for the simple reason that it could not conceivably happen. I'm not extending that promise to beyond June 23 though, for reasons which I trust you understand and therefore accept. Why flock to UK gilts rather than to government bonds from elsewhere which do not have the sword of Damocles Brexit hanging over them? Edited June 14, 2016 by unbeliever Link to comment Share on other sites More sharing options...
blackydog Posted June 14, 2016 Share Posted June 14, 2016 The remain campaign are very clear that EU-lite (e.g. EFTA membership) is not what they want. But they are not empowered to set government policy following a Brexit vote. This has been generally understood for some time. We've been through it a fair number of times on this thread. ---------- Post added 14-06-2016 at 12:33 ---------- Why flock to UK gilts rather than to bonds from elsewhere which are to not have the sword of Damocles Brexit hanging over them? Yes maybe, but forgive me for not reading all 250 pages of what is often just bickering. Link to comment Share on other sites More sharing options...
unbeliever Posted June 14, 2016 Share Posted June 14, 2016 Thanks. You're welcome. ---------- Post added 14-06-2016 at 12:36 ---------- Yes maybe, but forgive me for not reading all 250 pages of what is often just bickering. Fair enough. I think if I tried to read it all through again from the beginning, I'd lose the will to live before getting into triple digits. Link to comment Share on other sites More sharing options...
L00b Posted June 14, 2016 Share Posted June 14, 2016 Greece Government bonds must be really really low then ... oh wait ...Why would they? The factors underlying government bonds the most in the market, namely the country's defaulting risk, the base rate and the actual + expected inflation rate (negative in Greece) are not really comparable between Greece and the UK, are they? Link to comment Share on other sites More sharing options...
unbeliever Posted June 14, 2016 Share Posted June 14, 2016 Why would you expect it to be different? Genuine question.. Sorry missed this before. Norway does 80% of its trade with the EU and is 8% as populous as the UK. We're at about 45%. Link to comment Share on other sites More sharing options...
7hills Posted June 14, 2016 Share Posted June 14, 2016 If we did leave the EU, what would the chances be for a general election? (sorry if this has already been asked) Link to comment Share on other sites More sharing options...
unbeliever Posted June 14, 2016 Share Posted June 14, 2016 Why would they? The factors underlying government bonds the most in the market, namely the country's defaulting risk, the base rate and the actual + expected inflation rate (negative in Greece) are not really comparable between Greece and the UK, are they? So you would at least concede that the financial prospects for the UK in the event of Brexit are not so dire as to include a measurable risk of us ending up defaulting on our debts. ---------- Post added 14-06-2016 at 12:52 ---------- If we did leave the EU, what would the chances be for a general election? (sorry if this has already been asked) It has. But I'm afraid we don't have a clear answer. I'm of the view that it's possible but very unlikely unless the result is perceived as unjust for a string reason. Others think it more likely. Link to comment Share on other sites More sharing options...
L00b Posted June 14, 2016 Share Posted June 14, 2016 (edited) Why flock to UK gilts rather than to government bonds from elsewhere which do not have the sword of Damocles Brexit hanging over them?I expect, because they're still considered among the safest, together with the US ones, relative to the others? They're not the only form of marginally-safer investment (although one of the safest), and there's a myriad reason why investors may want to keep instruments denominated in £ rather than $ or €. To be sure, it's a bit of a non-argument in here: Brexit does not hinge or turn on the perceived or averred safety, the volume, the rate or the value of UK gilts issued. It's one factor that goes into both their appeal as an investment and their market pricing, amongst so many others, at a given moment under existing circumstances. So you would at least concede that the financial prospects for the UK in the event of Brexit are not so dire as to include a measurable risk of us ending up defaulting on our debts.I don't have to 'concede' anything: I don't believe that I've ever even suggested that the UK could "end up defaulting on its debts", have I? I believe that you've inferred that from a post or another from me. Edited June 14, 2016 by L00b Link to comment Share on other sites More sharing options...
unbeliever Posted June 14, 2016 Share Posted June 14, 2016 (edited) I don't have to 'concede' anything: I don't believe that I've ever even suggested that the UK could "end up defaulting on its debts", have I? I believe that you've inferred that from a post or another from me. Fair point. But it's nice to have a remain supporter confirm that the sky will not fall in on a Brexit vote. Looking below, it seems not everybody is yet content with your answers. Edited June 14, 2016 by unbeliever Link to comment Share on other sites More sharing options...
milquetoast1 Posted June 14, 2016 Share Posted June 14, 2016 Why would they? The factors underlying government bonds the most in the market, namely the country's defaulting risk, the base rate and the actual + expected inflation rate (negative in Greece) are not really comparable between Greece and the UK, are they? What is comparable is the UK's bond rate today, with what it was months ago. If the perceived long term risk of the UK was increasing due to Brexit fears then bond rates would be increasing, but they're not. The scenario you paint above that this is merely money moving from risky to less risky investments doesn't make sense. If you had fears about the Spanish economy why would you sell Spanish shares and buy Spanish bonds? You wouldn't. Link to comment Share on other sites More sharing options...
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