That may be so, but - at the risk of sounding like a 'Brexiter' - at least the UK has its own currency! It can be devalued. The UK has that control and can be competitive. What would happen to one of the EU countries if it voted leave but had the Euro?

They would start printing their own currency. Impossible to keep having the same currency at the same exchange rate if you leave. It's going to end up like Argentina when they wanted to keep a fixed rate with the USD. To be seen who's going to be Argentina and who the USA in that case.

By the way, this is the very problem with the Euro. If you want to have the same currency of (let's say) Germany, you should perform like Germany, or better. If you are less efficient, in any way, you're going the way of Argentina, even if not as quickly. This is why the EU should have one real central government, maybe USA style, and local governments should be like the governments of the US states.

> This is why the EU should have one real central government, maybe USA style, and local governments should be like the governments of the US states.

OK, where's the central government going to sit? In Belgium? No, I don't the Germans or the French would tolerate that if they have to give up their power to act as nations and have their PMs demoted to the role of state governors. None of the member countries would either.

And who among them thinks anything like a Jefferson or a Hamilton? And which portion of the citizenry would even buy into such a debate?

And then there are all the language and cultural differences - actually still a problem for the EU.

Next thing you know, we'd have yet another war in Europe.

Agreed. We shoUld but we won't for a long while. We're not a nation even if it would be safer if we were. But see how young people vastly voted against Brexit. This referendum wouldn't have won in 2026 and there is hope for becoming one nation. 100 years?

Underlying a lot of this is the fact that not everyone can perform like Germany, because, by definition, not everyone can be a net exporter. Germany has benefitted greatly from the Euro to get to its position as a net exporter.

"USA style" not without actual democracy, or you are going to see A LOT more EU-exits ! For example if TTIP imports ridiculous patent rules, I'm voting leave too. Right now the EU is sane, but I draw the line at stupidity.

> It can be devalued

I've lived in a country with high double-digit inflation through the 1990s (in one year it even surpassed 100%), I'd say be careful what you wish for. People seem to forget that paper money is just that, paper, and is based mostly on trust. Once trust evaporates (even if temporarily) shit's gonna definitely go wrong. But, hey, at least the decision is yours! You've got freedom!

Compare to: Greece.

Greece could have had it way, way worse. Ask the Argentinians, ask the Bulgarians who lived through the 1990s (I remember some of them passing the border to us (I'm from Romania) in order to sell whatever they had around the house just to have that extra cash that would pay the bills), ask us, Romanians, ask the Russians who lived through the inflation of the early '90s. You'd get only one answer: If you think things can't get worse than a certain point then you're wrong.

No matter how bad Greece is now, can you say with certainty that it would be better if it wasn't in the EU or Euro?

I personally doubt it. It is still much better than its neighbors.

I think EU membership is very good for Greece, euro membership not.

Why? Why stable currency is bad for Greece?

Because they would desperately need to float its value down to regain competitiveness. Now they can only do it by lowering wages through massive unemployment, civil unrest and layoffs in public sector.

This is not limited to Greece, of course.

Sweden also has it's own currency. Sweden is in a similar situation as Britain, and their closest neighbor (Norway) has never been in the EU. I'm not saying "Swexit" is imminent, but of the northern/western EU countries it is perhaps the most likely.

Countries have used foreign issued currency before; while it's likely that the same impulse that led a country to leave would also lead it to adopt is own currency, there's no fundamental reason that would have to be the case, they could afford one (or more) existing major ) or even minor, though that's less likely) currencies. That obviously leaves them at the mercy of monetary policy focused on others needs, but it may also reduce uncertainty due to lack of established trust in the new government translating into volatility of the new currency.

From what I gathered they'd just issue a new currency (that would be instantly devalued everywhere though).

How much of that is just money markets running scared and doing stupid things. The value in 2-3 months time will be much more instructive than the night of the vote.

But keep in mind the bad news has just started. I'm sure there will an initial bounce back, but then we're facing two years of uncertainty.

But keep in mind that for the last 2 years the GBP has been on a general downwards trend [0], and in the lead up to the vote (the preceding 10 days) there was a rally that boosted the value by at least half of what was lost.

The raw value of the figures seems scary (lowest value in 30 years, value of the pound dropped by 13%), but the reality is that after dipping very briefly to "the lowest level in 30 years" the GBP is currently about the same as it was in Feb this year and the value is down 4% from 2 weeks ago (not great, but nothing like a 13% downwards plunge).

Edit: Also worth noting, the FTSE is up from the start of the month, and roughly equal to what it was at the start of the week. Aside from a big dip and a bounce, it's literally like nothing happened [1].

0: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y

1: https://uk.finance.yahoo.com/echarts?s=^FTSE#symbol=^FTSE;ra...

If the market is doing stupid things, go make a killing. Until you've done so, you're really in no place to criticize the market.

Unfortunately the market can stay irrational longer than I can stay solvent.

That doesn't mean I'm not in a place to comment on what the market is doing - especially when it's a pattern that is repeated again and when major events occur.

2-3 months after the event will give a better idea of how the market values the decision to leave, rather than 1 day after.

A good 1/2 of the "tumble" was only added in the 10 days leading up to the decision [0].

I might not be making a killing, but someone is.

0: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=1M

You're explicitly claiming that it won't stay "irrational" in the 2-3 month time range. If you actually knew that with any degree of certainty, you would be able to profit from it. If a pattern actually does happen again and again, you can profit from it, it's really that simple. If you haven't done so, you're just a pundit.

No I'm saying in 2-3 months time there will be a clearer trend of how the market values the decision compared to 24 hours after the event.

I don't know which way that trend will go, just that it will be clearer.

Edit: Also, keep in mind that all of this is in the context of the post of was replying to, trying to point out that the pound hasn't "tumbled".

You can't take the highest point from just before the result was known, and the lowest point from the few hours afterwards as a representative point of how the pound is doing in response to the news. If you put it in the context of a few weeks, or a few months, things are much more sane.

Despite all the sensationalism that the pound reached it's lowest point in 30 years, the pound is currently at the around the same price it was a few months back (currently only trading at a couple of cents lower than what it was back at the end of Feb - $1.37 vs $1.39).

I agree that people summarize things in a sensationalist manner, and that cherry-picking endpoints is unreasonable. I disagree that the pound hasn't tumbled: it did in fact drop substantially in a very short period of time. I also don't really agree that you get a clearer understanding of the market response in the long term. In the short term, it's very clear that the market is reacting to a single event. In the long term, you have to try to separate the effects of this event from all the others, which is dramatically more difficult.

Also, even if you don't know which way it'll go, you are making some claim about how the market will behave. It sounds like you're predicting a decrease in volatility? Ok, you can bet on that. If not that, then what? If you aren't predicting something that can be bet on, you aren't predicting anything at all.

This is a non sequitur. There is a myriad of reasons why one might not profit even if they're completely right about the market. For example: just can't be bothered.

Yes, just can't be bothered to make an arbitrary amount of profit. That's definitely a justifiable reason. ಠ_ಠ