Tuesday, Apr 17, 2007
Real IR after basic tax turns negative
Safe Haven: Whats the Two-Dollar Pound Hiding from the Markets?
Despite gaining such kudos from the forex markets, all the Bank of England has really given British voters - as Tuesday's awful cost-of-living data prove - is a collapse in the real rewards paid on cash savings.
Posted by sold 2 rent 1 @ 06:08 PM (129 views) Add Comment
7 Comments
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1. confused76 said...
The GBP is doomed. By waiting so long, the King of Id**t has focused the carry trade speculation on the Pound... like telling the world "speculators, you have only one target today". Because of a 30% PPP differential (30%!!!!!!!!!!) UK will export high-wage employment to US, and import cheap labour from CEE for as long as the domestic boom lasts (1 year?). With domestic consumption flattening (or worse, falling) the BoE will cut the IR and the GBP will fall like a brick to 1.70 to the dollar. 1 year? 2 years?
2. Shipbuilder said...
This is what joe public should be seeing - the real truth behind the economic lies of the CPI and current interest rates. Yes, people should be a bit more savvy with their money, but i'll bet the average punter expects that his money in a standard bank account is appreciating - why wouldn't he?
The current level of IRs and inflation simply amounts to nothing more than theft. The foolish and rich are rewarded and the ordinary careful working man/woman is shafted, time and again.
Why shouldn't there be Enron-style jail sentences after this whole sorry mess?
3. enuii said...
Has the pound just become the most seriously overvalued currency in the world?
4. nearly30 said...
A seriously enlightening article - thanks s2r1!!
Did anyone see Tony Blair's monthly sermon today - if you didn't - you missed Blair show that he has absolutely no idea about the economy - esp. when asked about pensions, IRs, CPI figures, high pound etc. etc.. - just looked uncomfortable and mumbled something about strong economy for 10 years and what-ever-comes-next-is-a-new-challenge. So nothing you and your lot created then hey Tony!!!!
5. harold said...
"Has the pound just become the most seriously overvalued currency in the world?"
I would say that that is a reasonable question, and the answer is probably yes. The real danger for an over-inflated currency is a sudden collapse in confidence. IMHO the £ is being set up by speculators who, in the short term, know that IRs are heading in only one direction, and in the long term are going to create the mother of all shorts against it. The notion that the FX markets are fleeing the $ in favour of the £ is a joke, i.e., that the £ is a 'safe-haven'.
6. sold 2 rent 1 said...
nearly30,
Let's face it. If I were retiring from a company with a good guaranteed pension - would I care less if it was going down the tube. Neither would Tony.
7. paul said...
Oh yes harold, you get today's bonus prize.
On the money there I think. So to speak. Watch speculators drop the pound like yesterdays pants when they realize no more rate rises are in the offing.
And what will the Bank have to do to maintain its value?
You guessed it.