So, Maggie\’s passing means we must all be kinder to hte Europeans, join the euro, sign up to be ruled from Brussels and….well, the argument seems to be:
Sterling\’s exchange rate sovereignty has made for a more volatile currency than the euro.
Err, yes, that\’s the damn point.
We\’ve this optimal, non-optimal currency area thing. If you\’re in such an area then the joy of not having FX trading outdoes the damage from all having to react the same way to basic economic changes. As in, say, interest rates, differential demand for products, booms or busts elsewhere in the world, that sort of thing.
If you\’re outside such an area then the costs of FX trading are less than the costs of having to all react the same way.
If someone invited you into a currency area, but you declined, then one of the ways that you would work out whether you were right to decline or not is to look at your FX volatility. The more volatile this is then the more correct you were not to join: for obviously, your reaction to whatever changes have been going on has been different from those who did decide to join.
So, R. Cole is using as evidence that we should have joined exactly the evidence that we should not have. And how stupid do you have to be to do that?