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Gilts Sales By Foreigners Fuels Deficit Fears


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HOLA441
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HOLA442
Really, so you are selling all your £ and buying which currency exactly ?

If you feel the belief is incorrect, why not give a logical reason instead of a disguised ad-hom attack? As it happens I'd be quite happy to see the pound rise a bit, but I'm afraid I see it plummeting by the year end. Not least because of reasons given in articles like this one:

Bloomberg report

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Guest KingCharles1st

I hope Gordy enjoys his summer holidays because when he gets back, he is going to find that someone has been pumping a truckload of sh it in to his office in his absence.

This is going to really Boomerang- hope it gets him in the nuts

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HOLA445
If you feel the belief is incorrect, why not give a logical reason instead of a disguised ad-hom attack? As it happens I'd be quite happy to see the pound rise a bit, but I'm afraid I see it plummeting by the year end. Not least because of reasons given in articles like this one:

Bloomberg report

Gawd, how many times do I have to do this :rolleyes:

I realize you only joined HPC recently, but I've explained my view on GBP a million times on HPC.

In a nutshell: there is still a lot of bad news yet to come out of the Eurozone, what we've seen so far is just the tip of the iceberg.

GBP is still undervalued against the Euro.

As far as cable is concerned, I think we are going to hover around these levels for a while.

These are my views: if you think that sterling is going to tank, then pray tell me which currency you'd rather invest in.

Edited for spling

Edited by VoteWithYourFeet
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HOLA449
I've recently bought USD, & in fair quantity too.

Seemed a good short term idea at the time.

Now I'm looking for a therapist.

I sold my last USD on March 9th. [edit to add] except for whatever cash may be sitting in a drawer.

A couple of weeks ago (clearly too early) I bought a (much smaller amount of) dollar-dependent assets. But I'm still diversifying more worldwide, with an overweight on Asian countries.

Edited by niq
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HOLA4410
Guest sillybear2
Phase two, Solvency of Government. Interest rates rising. Realisation sets in that the government can't just wave a magic wand and make things better.

In the future they will look back in the history books and ask themselves why a society decided to destroy itself, ruin its monetary system, offshore its method of private wealth creation and trade, destroy the value of its currency and throw generations to come deep into debt simply to make the cost of putting a roof your head prohibitively expensive.

In April of 1856, a fifteen-year-old girl named Nongqawuse heard a voice telling her that the Xhosa must kill all their cattle, stop cultivating their fields, and destroy their stores of grain and food. The voice insisted that the Xhosa must also get rid of their hoes, cooking pots, and every utensil necessary for the maintenance of life. Once these things were accomplished, a new day would magically dawn. Everything necessary for life would spring spontaneously from the earth. The dead would be resurrected. The blind would see and the old would have their youth restored. New food and livestock would appear in abundance, spontaneously sprouting from the earth. The British would be swept into the sea, and the Xhosa would be restored to their former glory. What was promised was nothing less than the establishment of paradise on earth.

[...]

News of the prophecy spread rapidly, and within a few weeks the Xhosa king, Sarhili, became a convert. He ordered the Xhosa to slaughter their cattle and, in a symbolic act, killed his favorite ox. As the hysteria widened, other Xhosa began to have visions. Some saw shadows of the resurrected dead arising from the sea, standing in rushes on the river bank, or even floating in the air. Everywhere that people looked, they found evidence to support what they desperately wanted to be true.

[continued...]

Edited by sillybear2
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HOLA4411
I sold my last USD on March 9th.

A couple of weeks ago (clearly too early) I bought a (much smaller amount of) dollar-dependent assets. But I'm still diversifying more worldwide, with an overweight on Asian countries.

Seems I have two choices

1) I go on an intensive investment course; that means work & I'm not keen on it, never was.

2) I stick the lot into physical gold & don't look at any forums/tv for two/three....four? years

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HOLA4412
Gawd, how many times do I have to do this :rolleyes:

I realize you only joined HPC recently, but I've explained my view on GBP a million times on HPC.

In a nutshell: there is still a lot of bad news yet to come out of the Eurozone, what we've seen so far is just the tip of the iceberg.

GBP is still undervalued against the Euro.

As far as cable is concerned, I think we are going to hover around these levels for a while.

These are my views: if you think that sterling is going to tank, then pray tell me which currency you'd rather invest in.

Purchasing power is about the goods and services your currency commands, not about exchange rates. FWIW I don't expect the euro or dollar to command as many goods and services as previously, either (though I think sterling is more exposed, particularly as our energy gap looms closer with its impact on the balance of payments).

Still, I'm staying in sterling as my home-currency since that's what my obligations are in. Most of my income is USD denominated, and I continue to work to secure the things I need regardless of what happens to money.

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HOLA4413
Purchasing power is about the goods and services your currency commands, not about exchange rates.

Dude, this whole discussion is on exchange rates, it was kicked off by Laura's remark that £ has strenghtened vs other ccys.

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HOLA4414
News of the prophecy spread rapidly, and within a few weeks the Xhosa king, Sarhili, became a convert. He ordered the Xhosa to slaughter their cattle and, in a symbolic act, killed his favorite ox. As the hysteria widened, other Xhosa began to have visions. Some saw shadows of the resurrected dead arising from the sea, standing in rushes on the river bank, or even floating in the air. Everywhere that people looked, they found evidence to support what they desperately wanted to be true.

[continued...][/i]

The cattle-killing movement now began to enter a final, deadly phase, which its own internal logic dictated as inevitable. The failure of the prophecies was blamed on the fact that the cattle-killing had not been completed. Most believers had retained a few cattle, chiefly consisting of milk cows that provided an immediate and continuous food supply. Worse yet, there was a minority community of skeptical non-believers who refused to kill their livestock.

The fall planting season came and went. Believers threw their spades into the rivers and did not sow a single seed in the ground. By December of 1856, the Xhosa began to feel the pangs of hunger. They scoured the fields and woods for berries and roots, and attempted to eat bark stripped from trees. Mhlakaza set a new date of December 11 for the fulfillment of the prophecy. When the anticipated event did not occur, unbelievers were blamed.

It looks like the unbelievers are on HPC who refuse to believe that debt is wealth and that you cannot have perpetual growth.

Meanwhile the believers continue to increase govt debt in hope that it will magically generate growth. When that fails to materialise the believers will blame the unbelievers that there negativity is stopping growth returning with there doommongering. If only we believed hard enough it would be true.

As I have said before if only we had a PM who understood and appreciated history.

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HOLA4415
As I have said before if only we had a PM who understood and appreciated history.

We have a leader from a country that was rescued from bankruptcy by England.

Ever heard him say thank you?

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HOLA4416
Dude, this whole discussion is on exchange rates, it was kicked off by Laura's remark that £ has strenghtened vs other ccys.

The point that you challenged with your question "which currency would you buy?" specifically mentioned purchasing power (a post of mine copied from another thread).

Debating which currency is going to collapse earliest and hardest amounts to little more than counting angels on pinheads. It's what the currency will buy on the day you need to spend it that's important.

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HOLA4418
The point that you challenged with your question "which currency would you buy?" specifically mentioned purchasing power (a post of mine copied from another thread).

So what, I wasn't replying to you, I was replying to Trampa: I took your quote out of my reply to him/her

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HOLA4420
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HOLA4421
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HOLA4422
Yes QE works. Brown's plan to QE £100 billion worth of this year's budget deficit has to be the most radical plan in more than a generation. The pound is rising in relation to other major currencies because the British economy with QE is doing better than those other nations without QE to fund fiscal deficits.

And I would go way bigger than Brown has, I've been arguing for QE funded deficit of £350 billion each year for the next 5 years. It creates a virtuous circle as money gets into the hands of people they spend it buying things like cars. Then car salesmen make more money, pay more taxes, and buy more things themselves. As people spend money new jobs are created, bringing online unemployed or underemployed people.

Sorry but you missed the main point. QE is not helping to jump start anything in the UK. It's just an easy route for foreigners to sell gilts, probably to the only buyer-the Treasury itself (via the BOE). Why discount it to a third party when you can get full value from the BOE (that is the British taxpayer) ??

Am I missing something here, or is this just too simplistic??

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HOLA4423
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HOLA4424
I struggle with this one.

If the QE money is buying UK debt, the debt is held by a foreign investor the foreign investor is receiving £'s in exchange for the debt.

What does the investor buy with the £'s? This money has to make it's way back to the UK somehow? Doesn't it?

And if it can only buy UK goods or services is this what would fuel inflation, is this the inflationary or one of the inflationary scenarios?

Given I don't have the answers to the above, I would still offer that the money is finding it's way back to the UK and is being used to buy up equities which is why the stockmarket has seen an uptick in the last couple of months.

Answer's and views from the experts amongst us would be appreciated.

Where does the foreign investor come in in this scenario? The BOE buys gilts through QE and adds them to the balance sheet as an asset the same way the Fed expands its own balance sheet. When they sell them the money is effectively destroyed and the balance sheet contracts. It's just figures on a ledger remember-funny money.

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HOLA4425
We have a leader from a country that was rescued from bankruptcy by England.

Ever heard him say thank you?

1,Think of it as a down payment for the oil you`ve stolen for years .

2,(Royal)Bank of Scotland ,not Scotland .Bank of England , not England . Not the same thing .

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