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Fortune, July 21, 2009 in House prices and the economy
The pound about to sink?
How many times is that this year?
Fluffy Want Hyperinflation. OK, 10% will do..
The pound about to sink?What, again?
How many times is that this year?
Another day, another chart... YAWN
Those of us that have sterling have already been fleeced by the UK Govt to the tune of 30% in the last 18months.
Another 30% will be water off a duck's back...........
Yeah yeah I know but I have a strange feeling about GBP. Something is just around the corner and GBP is standing in the middle of the road. What happens next? I guess we will all find out.
Tend to agree. The natural rate is more like 1.50 ish.
Natgural rate between $1.55 and $1.72 depending on your analysis...
There is support in the 1.55 to 1.45 region (going back to the deleveraging wipeout last autumn). However if that breaks, the only support left is the trendline at 1.35 - which has held ever since the 1987 clearout. After that and, well, best not mention it...
I hope this is...how you say?....nosh.
But isn't this somehow telling:
If this really is the end of the US, it's more likely we'll see a $3 pound rather than a $1 pound. It wouldn't be permanent though...
The UK is far more structurally challenged than the US imo.
But you have to admit - the long term exchange rate graph says "no".
Since sterling is now 5% of European central bank reserves representing 475 million people, I reckon we won't get to those lows again. I reckon we'll see a decade on decade climb of GBP versus the dollar because we're taking harder decisions than the Americans and have been for 40 years since they let go of the exchange controls and our collapsing empire.
I reckon the demise of the UK relative to the US has been over for 10 years.
That's not to say the West isn't going to hell in a handbasket - it's just that some of us are only going as far as the second or third circle...
Fair point, but I was thinking along the lines that the currency boyz will short both USD and GBP - the pound more so - since the whole world knows that Brown's Britain is the retarted younger brother of the US (no offence intended). And so the rest of the world's currencies will seem to 'appreciate' against the US and the UK. In the recent era of free-floating currencies all is relative, I suppose.
The USD is the world's reserve currency. Unless the Chinese start selling, I'm not sure how much it can ever sell off.
I've not seen anyone show a 40-year analysis of GBP versus USD - on cnbc or Bloomberg for example.
Most commentators are busy saying the pound and the UK are finished.
We're in for a *very* rough ride - things will look really bad for a decade and the mentality of most will be to short the pound.
Unfortunately, they are in for a nasty surprise.
At this point, we need RB to comment... Where is he when you need him?
Energy consumption is where the US is really going to come unstuck -they can`t presist with using cars to go to the corner store and Air-Conditioning huge shopping malls 24/7 - not at the current level of retail Oil pricing anyway ...
Totally agree. Peak oil or the next oil supply crunch, depending on how you see it, will be like the UK's 1974-1980 in the US.
We'll just get a little growth contraction and stagnation - but given we can turn 1 barrel of oil into nearly $3000 on our GDP and we're 100% hedged against oil price rises due to the North Sea, we're largely home free...
Against what? Tell me where in the world there isn't a recession, unless you mean against the yellow shiny stuff?
I don't see why browns bottom = RIP uk, personally i want the pound to sink (or rather other currencies to appreciate).
In terms of the pound being overvalued against the dollar, i'm not sure, against a basket of world currencies i believe so.
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