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£GBP heading to oblivion


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On 8/6/2017 at 23:41, Bumble said:

The euro may be good in the short term because of the strength of the German economy, but Europe faces headwinds at least as strong as those of the US. Europe has an aging population, huge debt, unaffordable welfare programmes, insolvent banks, high unemployment in the PIIGS countries, and a migrant crisis. If you want a model of where Europe, including the UK, is going in the next 20 years, look at Argentina. It was once one of the most prosperous countries in the world; then it caught a bad case of socialism and spent the next 40 years lurching from crisis to crisis, defaulting on its debts, and suffering high inflation and unemployment.

I would say if you are looking for relatively safe currencies you are better off with the Singaporean dollar, NZ dollar or Norwegian krone.

Argentina, it  wasn't socialism just F-cking greed from the top and not paying taxes.  

Germany is now run very similar to the way Bismark ran Germany  a bully taking off all others for his own country, running the country for a cabal 

 https://en.wikipedia.org/wiki/Otto_von_Bismarck

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I suppose the UK on its own means we can hold our own politicians accountable, as opposed to the unaccountable EU politicians. We can't even get properly audited accounts, they say they are accurate, however, have many errors. A contradiction in terms if ever there was one.

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On 08/12/2017 at 11:58, Xander said:

I suppose the UK on its own means we can hold our own politicians accountable, as opposed to the unaccountable EU politicians. We can't even get properly audited accounts, they say they are accurate, however, have many errors. A contradiction in terms if ever there was one.

Well that's was the idea!  It's not turning out that way though, people must remember when the politicians say 'In the nation interest or in British interest or Britain's interest' they are talking for wealth and privilege big business, not the population!  We have already seen sterling devalued massively and blamed on brexit this is not true the devaluation is more to do with the BOE money printing and low interest rates! 

IMO it would of been better for the population if  a clean break happened, it would be hard at first but in the long run the UK would be far stronger. 

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  • 4 weeks later...

So, great news today (Aug 12) - the UK exceeded its inflation target of 2% and turned in a stonkingly good 2.9%. Hooray! And on that splendid news sterling goes up 1% against most major currencies, because inflation is really good for the currency, right? Has the world lost its sanity? The only possible explanation is that the market believes the BoE will be forced to raise interest rates, though I doubt we can count on that.

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4 hours ago, Bumble said:

So, great news today (Aug 12) - the UK exceeded its inflation target of 2% and turned in a stonkingly good 2.9%. Hooray! And on that splendid news sterling goes up 1% against most major currencies, because inflation is really good for the currency, right? Has the world lost its sanity? The only possible explanation is that the market believes the BoE will be forced to raise interest rates, though I doubt we can count on that.

Many currencies are boasting of being upi against the Dollar but it's the Dollar thats tanking due to the debt ceiling and spending rate issues not the other currencies improving in most cases.

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The markets are a future discounting mechanism; the fall in GBP that we had in the 2nd half of last year was predictive of the inflationary pressure that is now feeding through into the official figures. The markets have already discounted what is happening right now and are pricing in more normal conditions (at least vs other economics) going forward. GBP current strengthening has nothing to do with what the official inflation figure is right now - by the time it reaches print the data is already 3-6 months behind the real state of the economy.

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@Bumble higher inflation means debt will be repaid faster. Yes, I know it doesn't make any sense and in fact it doesn't but this is what monetarists think. 

Having said that, if interest rates go up by a mere 2% the whole economy will go belly up, which is what I really hope from the bottom of my heart. 

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22 hours ago, Bumble said:

So, great news today (Aug 12) - the UK exceeded its inflation target of 2% and turned in a stonkingly good 2.9%. Hooray! And on that splendid news sterling goes up 1% against most major currencies, because inflation is really good for the currency, right? Has the world lost its sanity? The only possible explanation is that the market believes the BoE will be forced to raise interest rates, though I doubt we can count on that.

IMO the BOE now use immigration figures as much as anything else to set interest rates!  The more immigration the lower the interest rates can be because labour costs can be kept down!! 

2.9% is a bit iffy again. 

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With the Petro Dollar ending on Dec 31st 2015 we saw a huge 4.87% appreciation of the GBP against the Euro over this past 3 weeks with further structural appreciation of the GBP against the Dollar also showing the trend towards $1=£0.5000 or in laymans terms £1 buys $2 inevitability. The Euro is dying, Castle EU is watching trade deals done then nobody buying its stuff globally. Distractions to point people away from the SDR Interbank CNY1m Golden Yuan being the new World Reserve Currency. In time books will be written about this transition period. The last time this type of era was occurring the key marker was the phrase "To Hell with Spain, Remember the Maine".

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  • 1 month later...
  • 3 weeks later...
  • 4 weeks later...
  • 4 months later...

GBPUSD $1.436 and now completely recovered all the post-Brexit weakness. 

They markets have done precisely what they are supposed to do; make the UK cheaper and hence more competitive during a time of uncertainty.

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47 minutes ago, vand said:

GBPUSD $1.436 and now completely recovered all the post-Brexit weakness. 

They markets have done precisely what they are supposed to do; make the UK cheaper and hence more competitive during a time of uncertainty.

Agree

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With the fall in unemployment, plus poor wage increases, it would not surprise me if the sterling increased now to over 1.45 towards 1.50 to get the consumer spending again.  This is just a guess   

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1 hour ago, vand said:

GBPUSD $1.436 and now completely recovered all the post-Brexit weakness. 

They markets have done precisely what they are supposed to do; make the UK cheaper and hence more competitive during a time of uncertainty.

GBPUSD $1.60 before the Brexit announcement and the current rate has probably more to do with dollar weakness than pound strength.

GBPEUR 1.15€ is still far from 1.45€ before the Brexit announcement. 

Markets were already anticipating a possible Brexit and the pound was dropping and rising depending on polls in favour or against a Brexit. When it actually happened, the pound adjusted immediately further down. Overall wiping 20% of the UK wealth...

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Something to bear in mind is that Draghi is due to step down soon and it's Germanys turn to provide a replacement, will monetary policy be as loose under a German and will Italy suffer from any change in policy?

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1 hour ago, KDave said:

We didn't lose 20% of wealth. The wealth is still there. It's our wages that took the hit. And our debts measured in gold ;)

As an outsider looking in, the thing that worries me, objectively, about the UK is her debt to GDP ratio, especially when you include private debt and future public obligations.  The U.S. has the same problem, not throwing stones, but with the UK's debt to GDP I'm surprised the UK hasn't already had Greece style problems.  Total respect for the UK people cutting deficits over the past few years, the UK people have grit.

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