What's going on with the UK pound?

[pacman]

(DrPhil35 @ Aug. 07 2009,03:11) The Bank of England upped its bond purchases and the pound has given back most of its recent gains.

The BoE are not buying their own bonds because they want to - they are buying them because no one else is silly enough to.

Once considered the last desperate act by an imploding financial system, this behaviour is all that is keeping the US dollar & Sterling from collapse.

These two world financial centres won't stand idly by & allow their respective currencies to be destroyed. Sooner or later the unthinkable will start to be promoted as a viable alternative to the vaguaries of the International Forex system.

The adoption of a One World Currency will be pushed as a fairer, kinder alternative but the reality is, it is about the only way the US, the UK & Europe can escape the ravages of hyperinflation.

When that day arrives, the US, the UK, etc will have done the impossible - their massive debt obligations will be reduced to zero all in the name of a new beginning. Just how they propose to market it remains to be seen, but doing nothing is not an alternative.

I only wish personal debts could be handled as easily as that...    

[Stogie]

The pensions deficits will be the next big thing. They sorta got buried behind the sexy 'credit crunch' headlines. But they'll be back to ruin my day trading activities!

[Tomcat]

it appears to me that when the average Joe Bloggs reads the headlines that UK is coming out of recession he thinks it means him.

It doesnt, it means Companies are coming our recession by shedding workers and re thinking there strategy...If the stockmarket keeps rising un employment will surely baloon up and Mr Average will suffer for the next 5 years at least.. for him this is going to get much much worse..  Fat Ladies... singing... not yet

As for the £...l a week is a long time in this day and age. I dont even get gut feelings anymore. It really is a Casino game now more than ever. Just wait for the next bad newsroll from the Govt and try to plot a course

[Bumpa STIKKA]

What a difference the year makes...

[guydesavoy]

(Tomcat @ Aug. 07 2009,15:19) it appears to me that when the average Joe Bloggs reads the headlines that UK is coming out of recession he thinks it means him.

It doesnt, it means Companies are coming our recession by shedding workers and re thinking there strategy...

One year hasn't changed this cogent analysis  

[Road Runner]

Which ever party ends up with the poisoned challice government they will be faced with making substantial cuts in public spending.

The headline figure has been quoted as £160 Billion.  That is the amount we are short of paying  each year.
The actual amount we presently owe is nearer £800 Billion.

I seem to remember the savings quoted by some party leaders are £50 Billiion pounds per year.

That's like saying your mortgage payments (house loan payments) are £160/month.
By making savings I can pay £50/month by the end of the year.
Ohh and if my pay improves I may be able to pay more later.

Either way the black hole we are staring into is huge and is becoming bigger every day.
Cutting chunks out of public spending and raising additional taxes is probably the only way out of this mess.
As the public sector is cut it will have a  knock-on effect of the private sector again.


Alternatively we could do what a certain Adolf Schickelgruber did to boost the economy  -  start a war!

RR.

[Ivor Biggun]

I remember back a few years when Nicholas Soames (Churchill's grandson) suggested putting the military in control for 6 months.   Truth is close to fiction as allegedly David Stirling (founder of the SAS) was approached in the 70s to look at the fesibility of a military coup. The public sector is completely bloated and really needs a 50% cutback , there's 1 civil servant for every 2 soldiers in the MOD ffs, then we have completely useless QUANGOS, levels of admin in the NHS, other jobs for the boys ND the MPs who 'stood down( ie aoided going to jail) at the erection all get huge golden parachutes  

Figures showed that the MoD spent more than £61 million on public relations last year €“ enough to pay the annual wage bill for 3,656 new privates in the Army. The compensation culture doesn't help thing- a woman soldier got 17k for hurt feelings!!!

[azza33]

(Bumpa STIKKA @ May 07 2010,21:34) What a difference the year makes...  

with Thai GDP up 9% last quarter and projected GDP yoy to be in order of 5.8% for los , i wouldn't hold your breath expecting the pount to surge any time soon.

[azza33]

(Road Runner @ May 08 2010,03:25) Which ever party ends up with the poisoned challice government they will be faced with making substantial cuts in public spending.

Or light the fire under a bit of inflation to solve the mess....

[batman4ever]

(azza33 @ May 08 2010,15:13)

(Bumpa STIKKA @ May 07 2010,21:34) What a difference the year makes...  

with Thai GDP up 9% last quarter and projected GDP yoy to be in order of 5.8% for  los , i wouldn't hold your breath expecting the pount to surge any time soon.

but this is the Thai numbers,aint it??

if memory serve me right.just about a year ago Greece declared that their deficit on the GDP was about 3,7%.....

...just to admitting recently that it was more than 12%.... hence the new crisis



wouldnt be surpriced if the Thais are doing the same right now....suddenly come out with news about huge losses,and then blame it all on the reds in BKK

then they "save face"....just the thai way...

[azza33]

Nah it accepted numbers, hence the reason why the baht is very strong and not likely to depreciate any time soon. (unless GFC kicks back in)

Red protests are estimated to perhaps cause 1-2 % dint in the projected GDP numbers....

At a revised range of 4-6 % GDP.... you can expect the pound to keep slipping away

[azza33]

Compare this with UK ... sorry folks... i bring bad news

[Road Runner]

At the moment the Thai's are printing money to keep their economy afloat despite the red shirts and other factors.
That money is backed up with cash reserves that they have carefully saved.


At the moment the UK is printing money to pay large numbers of public sector employees.
That money is backed up with........ zilch! It might as well say Monopoly on it.


Our ability to pay our creditors at the moment is little better than the Greeks - if it is better.
The only reason our credit is still good is that we have paid our debts in the past.


It may well be that we will have to allow the Pound to fall even further against other currencies and allow inflation to increase.
If anyone has a mortgage I would suggest trying to overpay at the moment while the interest rates are still low to reduce what you will be paying later.



RR.

[L B F]

1.00 GBP = 48.50 THB

WTF!

[Tomcat]

Thailand and South East Asia in general are in a relative strong position as they have growth and the Europeans are a bag of uncertainty. Greece is fucked in the long term and will be hoofed out the EU next year ... there is no other ending

IMO The US Dollar could also take a blow if the QE carries on.

Its going to be very nasty financial experience for Westerners who travel abroad to the Far East from here on... its not going back .. ever, so get used to it folks