Wednesday, Oct 22, 2008
Down we go!!!!
The Times: Pound tumbles on King recession warning
The pound plunged against the dollar in early trading today as global markets took fright over a stark warning by Mervyn King, Governor of the Bank of England, that the UK economy was on the brink of a prolonged recession.
Posted by titaniccaptain @ 08:40 AM (1256 views) Add Comment
38 Comments
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1. planning4acrash said...
You probably didn't add the value in the description because its scary. Remember that the dollar is plunging, so, for those who want to sleep well, turn away now. Your hard earned pound is now worth $1.6331 - for gold bears, how can they suppress it now?
2. geed said...
Thats a lot of imported inflation.
3. Whostolemyendowment said...
Is Mr King supposed to spin that the current situation is all rosy? I bet many politicians spat out their tea when he actually used the 'R' word.
4. mrmickey said...
Well if you believe Radio 4 this is good news, the Dollar is strenghtening against the Pound therefore we must be over the worst.
5. sold 2 rent 1 said...
"tumbles?????"
You aint seen nothing yet.
The GBP will lose 80pc of its value against gold by spring 2010 and 50pc of its value against emerging market currencies.
All you savers in GBP - prepare to be wiped out
6. theboltonfury said...
I don't care what it's worth against gold or an emerging currency
shops accept pounds last time I checked
7. hash browne said...
@ theboltonfury..
well said!
@ s2r1..
It's exactly your kind of scaremongering that creates bubbles like the current housing market, which has put so many FTBs into financial turmoil through fear of "missing the boat".
8. techieman said...
for the time being bolton.....
9. techieman said...
is that harsh brown? Rather than hash browne?
10. hash browne said...
Well I'm sick of hearing this VI bull about gold!
It stinks of the same sort of hyping up that BTLs used to do (& still try).
11. titaniccaptain said...
I am no gold bug....but its worth keeping options open.......If gold alot further then I will buy
12. titaniccaptain said...
That should read...........If gold falls alot further
13. techieman said...
hey hash calm down..... it might be wise to have a spread of currencies (and some of the yellow stuff) but i appreciate that not everyone has the wherewithall to have such a luxury. Its true that S2R1 does advocate a gold holding....as do i (even though i got rid of a fair chunk earlier this year), although he is certain of a huge increase as destruction sets in of the fiats - so he thinks you should (in effect) exchange all yr currencies now (well previously) for Gold whereas i aint so sure.
You have to ask yourself why people "talk their own book". Me? I dont actually do it because i like to put in print where i think things are going as it re-inforces my trading. I used to do it anyway in a book, but on here you cant do the ifs whys and wherefores. We can all be wrong so yes in that way saying it IS that way rather than saying (as i hope i do) it will probably be that way and acting accordingly can be a cause of irritation.
14. inbreda said...
@9
yes - and it is still going down in price despite s2r1's mayan calendar predictions that it would be worth loads by now. (bear in mind that I do actually think it is worth investing in gold at the moment - I just don't like the mad and unjustified predictions)
15. stillthinking said...
Savers are already wiped out a bit. They lost 20% this year. In yen terms the housing market is down 30% already. I am surprised people anybody wants to keep saving in sterling, one way or another it certainly doesn't look good.
The BoE meeting has been abandoned, otherwise those coordinated rate cuts wouldn't have been possible. The rate of inflation is now in the hands of our New Labour masters.... And we already know they want to inflate ! But can they !
The price of food and oil can go up with a weakening currency while we have deflation in the UK, its a consequence of something called "being poor". Who is going to buy all those gilts the government needs to issue ? Looks like a pretty stupid way to lose money. Oh wait, the pension funds legally have to buy government bonds.
Will New Labour print ? I don't know anymore. I used to think not, but maybe they will.
If you are going to the meeting tomorrow in London, I would be aware that it is likely the national press might attend. I should imagine it would be pretty easy to vilify house price crashers at the moment.
16. planning4acrash said...
Bolton. You don't understand Gold. I can sell a coin at premium whenever, wherever I want. Each coin is a solid gold, non debt credit card. Get sovereigns and you can cash in small bits at a time. Gold coins are international, protected credit cards.
17. sold 2 rent 1 said...
Gold will be a bubble with peaks in spring 2010 and autumn 2011, then worth ZERO.
18. theboltonfury said...
yes but if you are hedging against a collapsing flat, then all your left with is some yellow metal and nothing to change it into.
Last time I checked the gold standard had been abolished?
19. sneaker said...
Should this site be renamed www.negativenewsonanysubject.co.uk ?
Come on, gang! We've had the house-price crash so many were looking for. So what comes NEXT?
20. sold 2 rent 1 said...
inbreda,
"yes - and it is still going down in price despite s2r1's mayan calendar predictions"
I have already admitted I was wrong about gold.
I thought it would peak at the mid-point of the fifth night.
But it turns out it is slightly short of the mid-point of the sixth night
The last sixth night (1972-1992)
When did gold peak? 1980
The next sixth night Nov 2009 - Nov 2010
Midpoint is May 2010 - so gold could peak in March - April 2010.
The final sixth night in autumn 2011 is only 18 days long and is another story altogether - way too far out for you guys at the mo.
You might think I was a crackpot - LOL
21. Andrew said...
Hi,
Could someone please explain, why if the Pound has lost value against the Dollar, has it gained in strength agains the Polish Zloty and Australian Dollar at exactly the same time. Have all Currencies just lost value as the Dollar has strengthened, just that Sterling has lost less ?
I am confused. Could someone please elaborate ?
22. icarus said...
Instead of summer hols in the US or euroland take a winter hol in Cape Town (£ soaring against the Rand).
23. mark said...
i think you guys are all missing one thing here: If things get so bad as bad as some think, then gold won't keep you warm, nor will it feed you, maybe people should be thinking about how to grow their own food and turn to log stoves to cook and keep warm... Stock up on matches, candles, tinned food, rice, pasta and a gun or two
24. holding out said...
S2R1 - It would help if you expressed your opinions, as opinions. But you state them as facts. This is in spite of the genuine fact that the only one which can be proved one way or the other was manifestly wrong (Gold @ 1500 in June). If you back up predictions with research or even considered opinion that is fine, but Mayan calendars or the Korean war - please!
25. icarus said...
Why should King's comments have this much effect? He didn't reveal any new info and markets have already priced in what he said. Did they read his comments as a hint of IR cuts - but then that possibility/probability should also have been priced in already. And what does he know about future IR cuts - the MPC is independent isn't it, IR's are set at its meetings and he has only one vote.
26. last_days_of_disco said...
@mark
"and a gun or two"
Yip, if you are in a situation where you need to stockpile food, don't forget about security.
27. mountain goat said...
To be fair people who have stuck with cash, "cash is king", have done pretty well up till now. However, when Warren Buffett says "cash is trash" as he did last week then you need to at least review your saving strategy.
28. mountain goat said...
guns are a poor investment, more people get shot by accident than in defence. And even if you defended yourself by killing someone, you have to live with that the rest of your life.
29. titaniccaptain said...
@mountain goat
"guns are a poor investment, more people get shot by accident than in defence. And even if you defended yourself by killing someone, you have to live with that the rest of your life."......................he who lives by the sword shall die by it
30. pelethar said...
Icarus - having listened to the speech, the most significant statement for me was when he stated that at some point banks will return to "normal" lending practices, but he made a point of saying that he did not think "normal" means anything like the pre-credit crunch lending environment. And as we all know, if that environment doesn't come back, then banks will keep lending at approximately 3x income, and will keep requiring at least a 10% deposit. Which means that house prices will decline by at least another 20%, with all the knock on effects that will mean for the wider economy.
And to agree with what some others have said here - if the armageddon situation was to unfold, and we had a Zimbabwe-style economic meltdown across the globe, then gold will be useless as well. You can sell it, but if currency has little or no value, what will you sell it for? Platinum?
31. landofconfusion said...
> 27. mountain goat said...
>
> guns are a poor investment, more people get shot by accident than in defence.
Thank goodness for that.
> And even if you defended yourself by killing someone, you have to live with that the rest of your life.
Well, at least you would still be alive.
32. icarus said...
pelethar - I still think that anything he said would already have been priced in.
33. crash bandicoot said...
I despaired of the fools on Newsnight last night, braying for a large rate cut. At least Ken Clarke pointed out the error of their ways. It's not the price of credit that's the problem it's the availability - and you'll trash the pound in the process if you keep cutting. He went on to point out that swathing rate cuts have hardly helped the US economy either.
34. denzil said...
Sadly this blog is not the place to get impartial or accurate advice on future gold prices.
35. shipbuilder said...
Credit availability, at least for housing, is NOT restricted - it's just back to were it was before insanity kicked in. Were we that badly off when credit availability was last at where it is now?
The only excuse for rate cuts is to get spending and investment back to levels of the last couple of years, which everyone has already agreed that we don't want to do.
I wish these idiots would just give it up - we're in a recession, get over it.
At least pretend that you're doing something to back up the calls for prudence and saving by providing an incentive.
36. pelethar said...
Icarus, I agree, but like you am trying to make sense of the panic sparked by his comments. I would have assumed everything he said was pretty self evident as well. The comment I mention above is the only one I can imagine causing any raised eyebrows as there has been some ambiguity about comments that lending would be restored to 2007 levels.
37. sold 2 rent 1 said...
holding out,
"S2R1 - It would help if you expressed your opinions, as opinions. But you state them as facts."
OK. Implicit with every post I make, add "My interpretations of the models I follow means that I think......."
38. James said...
s2r1 - you should also define what you mean by 'model'. It's not the same as other people. Other people's models run off statistical analysis of past and current trends, stochastics, etc., etc.. Yours run off the Mayan Calendar.
In my *opinion*, this makes you a fruitloop.