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From the first dozen paragraphs of the article it seems he ignores the disparity of the role of monetary issues between the US dollar and the British pound. Both are fiat currencies, which is a giant advantage compared to the Euro, but The City is the chief center of eurodollar finance, not europound finance and the US$ is the de facto world reserve currency, not the pound. That, together with the massively different weights of the two economies supporting the two currencies, makes the British pound much more vulnerable to inflation in the presence of a trade deficit. That structural issue needs to be considered before drawing any conclusions about real wages in the two countries and I did not see that he had even made such an attempt.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 26th, 2014 at 11:17:29 AM EST

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