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£GBP heading to oblivion


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After sterling having a strong early week it is now falling back.  IMO you may of missed the boat to park your funds. If you have not exchanged into $ or euro yet keep an eye on Mrs May's speak later, if the PM gives a strong speech the £ may bounce giving you a chance to exchange out.  

Again IMO sterling is in for a rocky ride and there is money to be made with the volatility even if you only park the money in one of the many exchange companies eg currencyfair etc.

Long term IMO I see sterling struggling up to 2020 at least and maybe many years longer, if one looks very long term I believe the UK will be in a strong place as all the hard news will be front heavy a hard landing for the UK.  We will see all the rats leaving a sinking ship but the ship will not sink and I have confidence that in 10 years the UK will be very prosperous Country.          

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2 minutes ago, Pipers said:

but the ship will not sink and I have confidence that in 10 years the UK will be very prosperous Country.          

+1 to that.

Currently stacking 1/4 oz (22ct) and Sovs.

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The pound has slipped against both the euro and the dollar, after Mrs May letter has been delivered to our EU overlords of debt & debt

Traders shorting sterling in order to hedge against any resulting volatility that could occur. 

Gold & silver up a few blips today already

Two year limit on exit negotiations & agreements, if any are made, sure this wont be the only market volatility we see along the road of exiting.

 

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11 hours ago, Pipers said:

After sterling having a strong early week it is now falling back.  IMO you may of missed the boat to park your funds. If you have not exchanged into $ or euro yet keep an eye on Mrs May's speak later, if the PM gives a strong speech the £ may bounce giving you a chance to exchange out.  

Again IMO sterling is in for a rocky ride and there is money to be made with the volatility even if you only park the money in one of the many exchange companies eg currencyfair etc.

Long term IMO I see sterling struggling up to 2020 at least and maybe many years longer, if one looks very long term I believe the UK will be in a strong place as all the hard news will be front heavy a hard landing for the UK.  We will see all the rats leaving a sinking ship but the ship will not sink and I have confidence that in 10 years the UK will be very prosperous Country.          

I think you're far too pessimistic.

All the bad news is already baked into the price by now. Sterling is too cheap and should rise in the coming years. 

There is also a view that we are due a cyclical move up:

http://moneyweek.com/currencies-gbp-sterling-low-is-in/

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I hope you are right Vand, though I have to wonder if I had the same view (which i don't) I would be buying £'s not Gold or Silver, then when the £ recovered I would go out and buy heavy with all the profits.:)

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2 hours ago, Pipers said:

I hope you are right Vand, though I have to wonder if I had the same view (which i don't) I would be buying £'s not Gold or Silver, then when the £ recovered I would go out and buy heavy with all the profits.:)

If your earnings are in GBP then you are already implicitly long on the pound.. you don't need to buy more! The best time to diversify away into other currencies has long since passed, and if you missed the chance to do so, then it's a bit late now.  PMs have, of course, been one of the best ways of diversifying away GBP as the sterling price has risen much faster over the last year. PMs offer the chance to diversify away from fiat and paper assets.

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1 hour ago, vand said:

If your earnings are in GBP then you are already implicitly long on the pound.. you don't need to buy more! The best time to diversify away into other currencies has long since passed, and if you missed the chance to do so, then it's a bit late now.  PMs have, of course, been one of the best ways of diversifying away GBP as the sterling price has risen much faster over the last year. PMs offer the chance to diversify away from fiat and paper assets.

I think our long term views are not to far apart, we seem only to differ on the value of the £ over the next few years and the risk to sterling.  That is what a free market is supposed to be about.  :)  .   

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Just from the charts, I'm am getting very bullish about GBP. I think there is plenty of upside from here.

October was a clear low @ 1.10EUR, and we have now consolidated and built a nice base, forming a triangle which looks likely to break on the upside while the moving averages have flattened out.

Similar story vs USD, although the dollar has been a little stronger, but again you see the patter of higher lows as the moving averages have flattened out and we are consolidating and forming a base. 1-2% higher and we will take out a lot of technical levels.

Yes yes, some people call TA technical mumbo jumbo, and to be honest I hate using it on a shorter term basis, but on long term charts it becomes a very powerful tool, and is the same methodology that got me super bullish on Silver just over a year ago.

 

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  • 3 weeks later...
  • 3 weeks later...

When the Tories win sterling will rally until the emergency budget, I will be watching very closely over the next few weeks. I have the opinion the City will be looked after first and foremost well before the country. 

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Carney Strikes again!!! 

Who does the Governor of the BOE work for and for what is his main interest?  It is very obvious to anyone apart from an idiot that Mr Carney's main interest is not the wealth of the population of the United Kingdom or in fact the wealth of the Government but his banking/ Corporation friends in the City of London.  I am now of the opinion the sooner the present Government takes back control of setting interest rates away from Carneys little Cabal the better. With a good Chancellor in place, i believe we have a good Chancellor  with Mr Hammond he is pro Business but cautious enough with a view on the wealth of the population the 'normal people'.  

I am of the opinion interest rates should be raised slightly now.           

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"The time is not right"

With him in charge the £ will not strengthen any time soon. The trouble is people don't understand the link between Carney Policy and Inflation. When people think interest rates, they think mortgages first, bank deposits second. Inflation is apparently caused by something else entirely; for example Brexit. :rolleyes:

I wonder how high he will allow inflation to get before taking action.

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23 hours ago, KDave said:

"The time is not right"

I wonder how high he will allow inflation to get before taking action.

Disagree, @KDave IMO the time was never right to reduce rates to where we are now, all Carney does is 'kick the can down the road' to let someone else deal with the problem.  The effect of his strategy is the debt keeps rising and we are now at the point where £44 billion of the deficit is used solely to service the that debt.  At the same time he is making the population poorer all the time, I have to remind people in 2007 the £1 was ball park worth $2 it is now worth £1.26!  a massive devaluation!  Plus it looks like Carney is quite happy for sterling to devalue even more even possibly to $1.1 .   

A weak £ only helps manufactures not assemblers so the car industry can be counted out, so that leaves the arms/ military industry and aviation the overseas service industry costs will start to increase rapidly IMO as they tend to us foreign labour.  Basically the boost only lasts short term in the real world as commodities are priced in $.  

           

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On 21/06/2017 at 11:38, Pipers said:

, I have to remind people in 2007 the £1 was ball park worth $2 it is now worth £1.26!  a massive devaluation!  

           

But this is not a reliable way to measure the value of a currency. You have to measure it against purchasing power, e.g. what you could buy with £1 in 2007 and what you can buy now. 

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On 06/25/2017 at 22:28, savoyard said:

But this is not a reliable way to measure the value of a currency. You have to measure it against purchasing power, e.g. what you could buy with £1 in 2007 and what you can buy now. 

I know what you are saying but you also have fallen into a trap, the neo liberal trap of there is not any technology progress meaning goods are not cheaper and most commodities are not cheaper to source  or grow, we know this is to be a lie and goods should be cheaper so we all should be better off!!!

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Moving the market with a few words. Carney has gone from "the time is not right" to "the time might be right soon" in less than a week and the pound has strengthened. I wonder how long until he raises them?

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I thought I read that the BoE was going to 'see what happens with inflation' before committing to raising rates which I thought was a ridiculous thing to say given that an interest rate rise typically has its effect on inflation 18 months to two years after the rate adjustment occurred. Its easy to see why as many companies have contractual price fixes and employees are on fixed salaries that are not reviewed for 12 months at a time so firms cannot instantly adjust to interest rate movements. By the time inflation has occurred it is a bit late to do anything about it but looks to me like the BoE want to see the inflation occur and then think about doing something. I worry about our economy when we have these clowns at the helm but it should help our Gold holdings

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current inflation it's due to brexit.

most modern countries use the Austrian economic model and as such needs the inflation rate to be 2% or it's screwed  the UK and many other countries hasn't been anywhere near that 2013-early 2017.

 We shouldn't have lowered the interest rate to 0.25, it needs to go up as soon as  possible  with current rates there is no way the world had run out of ideas on how to save the economy of tests stay low its pretty obvious QE doesn't work yet everyone is still using it.

 

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Ultimately the Bank of England is entirely to blame for the inflation of the pound in the first place. Brexit was the excuse as ever. They will take action if inflation rises because it will appear that they are doing something to rectify the problem and they will say as much, but remember who cut the rates in the first place, and if they raise them then they confirm that initial cut less than a year ago was completely unnecessary and political.

The way inflation is going, I have seen it suggested that August may be the point at which rates are raised in the UK, though I doubt it personally. Its not impossible, but a rise in August would only be a year since they were lowered post Brexit so to reverse so early would require a decent excuse - inflation will have to be really bad on the numbers in the next couple of months for this to happen, or something else needs to happen first. The pressure from the FED rises will likely force the issue eventually thankfully. I believe it is now a case of which will come first - will the FED be able to raise rates high enough to force other CB's to follow suit, or will the recession for which the rates are rising ahead of hit first. The rises in the US have been forced by the market (tail wagging), and have the added effect of providing some wiggle room for the next downturn. The race is on between the next recession and further interest rate rises imo. We are due one.  

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