Monday, Mar 26, 2007
IR rise now guaranteed by May
The Telegraph: Sterling to smash $2, says ABN
The outlook for the next 12 month's:
Sterling to rise strongly as inflation and IR rise and economy overheats
Sterling to crash badly whern carry trade ends and economy slows
This all ties in with a crash and economic downturn in 2008.
Posted by sold 2 rent 1 @ 11:19 AM (220 views) Add Comment
16 Comments
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1. paul said...
This is bad bad news for the likes of "economists" such as David Smith. Danny Blanchflower won't like it either. Neither will Gordon.
If the letter is written, regardless of how much it'll be downplayed it will be an admission of failure - despite fillding the figures more than twice. I suggest voluntary redundancies at the MPC.
2. uncle tom said...
It's a very possible scenario, but IMO not one that will last very long as the distortion would be unsustainable - I don't think I will be the only one buying into dollar stocks if this happens..
3. sold 2 rent 1 said...
David Smith doesn't look more than 12 months ahead.
If this overheating continues for another 6-9 months, even he will be forecasting a downturn by the end of the year.
4. tyrellcorporation said...
Uncle Tom, you're back!!!
Is it worth looking at Gold again?
5. denzil said...
s2r1 said:
>>David Smith doesn't look more than 12 months ahead.
IMHO the aforementioned Smith does not look any more than 12 minutes ahead. "Too early for a calming rate cut".
BTW. good to have you back UT. Your thoughts and considered opinion on an increase in base rates in April.
6. geed said...
Afternoon Gents.
I am looking to exchange a reasonable large chunk of Aussie dollars in the next 3 weeks. I need to definitely exchange some into sterling as I am moving back there for a few years but I also may be heading to South America (Wait foir the HPC ;) ) for a break where the USD is a favoured currency. The Aussie dollar is looking much better against the pound lately down from $2.52 to $2.44ish but also better against the USD @ $1.24. There are strong rumours in the press that IR's will go up over the next few months in Australia but this should be evened out by IR's rising in the UK come April/May so they should track each other but both rise in value against the USD.
Question is do i exchange it all into Sterling and then when required into USD (i.e.. over the next few months). Or change the Aussie dollars straight into USD thereby having only one fee?? My gut feeling is to exchange all into Sterling as the rate is unlikely to change between AUD and Sterling over the next few months. It is then likely that sterling will rise even further against USD over the next 4-6 months which would work in my favour...please question my logic
Aslo I was thinking of using XE.com as they appear to offer more favourable rates, anyone used these guys before or could recommend another on line exchange service.
Thanks in advance
7. inflation is eating my savings said...
This is linked to the article
http://www.express.co.uk/blogs/author/271/Sarah%20O%27Grady
"Whingeing first time buyers should shut up"
8. lvmreader said...
We need to monitor GBP vs EUR for a real idea of how fast we are moving backwards.
Also GBPCNY, GBPSGD.
The USD is likely toast, unless the USA can nuke a country or two into oblivion and steal their resources, which will buy about 12 minutes of dollar protection before the rest of the wrold finally decides enough is enough and whatever the losses, a world without the US/UK is a safe world.
9. Scott said...
Drastic results will not happen from minor actions. Interest up 0.25 percent. Wow! So what? What we need is drastic action. Interest to 8% or 10% next month.
If such action does not happen and these articles are just reiterated to create fear, it will be the biggest disaster that never happened since the millenium bug.
10. inbreda said...
geed - I use oanda.com for messing about with currency, and it seems very good to me, but I am no expert so will not offer any further opinion.
11. geed said...
Thanks inbreda, I'll have a look see.
12. sold 2 rent 1 said...
geed,
I opened a https://www.currenciesdirect.com/ account but found out they did not do transfers to Turkish Lira so I have not used them yet.
13. royston said...
geed,
As inbreda said, www.oanda.com is the way to go. They are a serious outfit who have been around for quite a while. I would be very reluctant to deal with online services where you don't know who they are. Anyone can set up a website. But I am very confident in oanda.
14. Whiteknight said...
great. another pointless 25 basis point rise .. because to do anything else would threaten the credibility of the MPC committee!
Trust me. Those on the committee needn't worry about that. Its already long gone.
Better to look confident early with a couple of consecutive early 50 basis point rises than like a dumb schmuck later with a 3-5% mid official meeting rise later.
And there was i thinking that they were starting this approach in January.
Economics truely is the dismal science. Put a couple of proper engineers on the job. Sorry!
15. uncle tom said...
Nice to be remembered - yes I'm back from a nice long sabbatical in warmer climes!
MPC decision April? - probably no change, but the membership of the committee is a little more excitable than it used to be, which adds an element of uncertainty..
I do expect further rises, but also wonder when they will wake up to the fact that using interest rates to control inflation is a bit like using a hammer to insert screws - it often works - but not always....
16. uncle tom said...
PS
Forget gold - unless you're very big - it doesn't generate an income and the spreads are horrid - most small guys end up losing