Currencies - What the hell is going on?

[Guest]

by the years end the pound will be at about 60 baht and around $1.75 the uk is just the first to go into recession once every one works out every country is in the shit it will all balance out again

[azza33]

Misery update

53.5 to the GBP
21.06 to the AUD

[Tomcat]

(pro2000 @ Oct. 26 2008,01:23) by the years end the pound will be at about 60 baht and around $1.75

No chance of that im afraid, i just polished my crystal ball and the estimate is that the pound will be lucky to be above USD1.50 by January It will take another hit today and could hit 1.40 something.  

You think this is bad, what the politicians will never tell you is that the world population is spiralling and that oil has peaked as will copper and all the other thing that make up yout plasma TV.

IMO "growth" is a word that will not be used in 10 years time. With 9 Billion mouths to feed...growth?. If every country in the world kept on growing by around three to seven per cent ad infinitum you dont need to be clever at maths to work out the consequences

[pacman]

    I agree.

With a global economic contraction of unprecedented proportions, the world is staring at hardships never experienced in any of our lifetimes.

There are some analysts predicting a food affordabilty crisis over the next 10 years that could see the mass starvation of 100's of millions of people.

We will need to see global co-operation by the first world countries on a never-before-seen basis to deal with the coming catastrophe.

We must all hope they are up to it.

[Tomcat]

" we must hope they are up for it"
Some chance of that. Practically all Politicians are professional liars and will tell there public any old rubbish to get elected. Its all bullshit.

Quote from Gordon Brown=" the days of boom and bust are over my friends"

My guess is that eventually some kind of Communism will be invoked.
I just hope im dead or living in some luxury Island complex with machine gun posts and barbed wire ..and daily newspapers

[azza33]

Are you guys digging bunkers and stocking up on canned food by any chance?

Or

Have you just watched Max Max II and are a little pumped?

[robbo]

its not the growth that is a problem,but the imbalance of it and the inequality of wealth or even basics to life support.this has been shown to be the cause of world problems and conflict/war througout human history,the causes in inequalities are the inbuilt unmovable traits which are fundamental in the human race. one of these is to take far more than its species needs to the expense of everything else and even its own.its not a good outlook for us as a species, in fact we are probably only here in the earths history for a brief time .....................that is why it is imortant to shag as much as possible, to monger is to be human!let us monger my friends.

[dummy_plug]

Anyone holding pounds or AUD is pretty much going to get fucked for the next 6-9 months and probably well beyond that.

Fortune smiles on our Japanese friends. Their currency has appreciated against the baht by almost 50% from last year's low. Sigh...USD almost to 35, hopefully it will keep climbing!

[jaymee]

2 cents.

Yen will strengthen more especially against most like kiwi, aud etc as rates start to fall. Other EM nations too with high interest rates will have to adjust lower and subsequently weaken.

Seriously high yield currencies will surely die the next few months.

USD will rise and then steady until december - as fund redemptions and liquidations continue to cash strapped US folks to meet their financial obligations e.g. margin calls, loans et al.

On a side note, when USD starts to weaken, and yen stabilises, I believe the market bottom would be clearer.

Then I expect a 25-35% drop for USD for a smack back to reality

[dummy_plug]

I disagree, especially with the last part. US already has some of the lowest interest rates around. You can't go below 0, so the Yanks don't have too far to fall - not in comparison with Australia, GB, and the EU. In fact, the yen's only real strength is that there's no room to cut rates in Japan - its not due to Japan's economic growth prowess (of which there is little of at current moment, nevermind the last 15 years).

US cuts rates, but everyone else has to cut them more in comparison which drives the USD further up against those basket of currencies. Pundits, whether right or wrong only time will tell, widely predict the US to emerge from the economic malaise first or as precondition to global growth which puts the USD to be at the forefront of any recovery 1) cuz rates ill rise in the US first most likely as everyone else will still be moribund or just recovering, 2) US exports will continue to be a growth driver stimulating a demand for dollars even in this downturn, and 3) economic activity will be stronger in the first phases of the recovery increaseing investor demand for USD-denominated securities and investment vehicles.

[jaymee]

The low interest rates are not a healthy phenomenon.

The recent recovery was sparked several reasons. We see an MZM spike from a massive injection to ready money supply to address the credit crunch.

Additionally, a currency backflow back to the US due to the liquidation of risky assets overseas has effected the US in seemingly "buying up USD" when they receive USD proceeds from asset sales. This to meet needs of cash strapped folks back home - the overseas equity markets were simply the fastest, most liquid medium to raise cash by selling assets.

This also can be observed via the unwinding of yen carry trades, a low yield currency which has actually strengthened against the USD.

The biggest bubble now is the USD which will undoubtedly face immense pressure to flow into real assets e.g. stocks, real estate, commodities etc as people scramble to compensate for the the increasing premium to sustain USD as the trading proxy.

I suspect an explosion in "prices" will escalate in the near future. This would mean USD will fall.

As manarak said

"don't forget the stock prices naturally inflate over time, not only because of the interest rates, but also because of inflation."

Being a consumptive rather than producing nation, the recovery this time would be more L shaped and will be quite unlike the cyclical recoveries of the producers. EM nations with interest rate reductions would be cyclical in nature as well - and will ultimately adjust upwards in future.

US will find immense difficulty to adjust interest rates upwards in the near future - and there would be a possible run in the UST long bonds (signalling a UST bond crash) should it eventually do so.

[jaymee]

Oh sorry.. biggest bubble in either USD or US treasuries or both.

[katoeylover]

Bit of a recovery going on - £1 = $1.60 and 55bt to the pound

[robbo]

yes,i think its very possible the £ will get a fair bit higher within a year,back in the mid 60,s baht would be nice,where it should be.its been down long enough for fck sake.

[robbo]

just been looking at FX and last week saw the £ against baht at its lowest rate in over 700 days,52 baht, highest in same period was 71 baht,hoping this has now found its bottom and will begin to rise,if went down much further the old addage its cheap in thailand will not apply.............and thats not good for anyone...........mayby especially the thai tourism industry. going to thailand may go outa fashion to some extent