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Pound Slides Again As Markets Enter Bank Of England-fuelled 'bubble' Stage

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http://www.telegraph.co.uk/finance/economi...bble-stage.html

"Markets are now entering a bubble phase [which may last] until the end of the year," said Crispin Odey of Odey Asset Management.

However, the bubble is almost entirely dependent on the Bank of England's quantitative easing (QE) policy, through which it is creating £175bn and pumping it into the system by buying Government debt, he added.

Mr Odey's comments came as the pound fell further against other leading currencies after a report from the Bank warned of the effect of the financial crisis on sterling's long-term value.

Mr Odey told clients in a note: "Individuals and institutions are stampeding into real assets – eager to have anything but cash or government bonds... The latter are expensive because of the QE which has caused that bubble.

"At some point the QE will have to come to an end but, until it does, this bull market is sponsored by HMG and everyone should enjoy it."

Katherine Garrett-Cox, chief executive of Alliance Trust, said: "I think the recent stock market rally has been driven by sentiment rather than fundamental facts.

"In 2008 markets were driven by fear; this year they have been driven by greed.

"I'm sceptical about the market recovery given the fiscal environment we are in. Public spending is falling, consumer spending is down and unemployment will rise."

Although many central banks have taken on a QE policy, the Bank has committed to creating and spending more than any other, arguing that the alternative outcome is severe deflation. However, this is thought to have sparked a gradual exodus from UK investments by overseas asset managers fearful that the policy may generate inflation.

So how high will the FTSE go before it goes pop?

It's a stimulus fuelled bull run.

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and when it does, the headlines will tell of the BILLIONS lost....and this will be cash...cash now not available for spending.

funny though that banks have on deposit just about the amount of QE projected. ( graph some days ago here).

Edited by Bloo Loo

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The pound is up this morning, just fyi.

gold up about 8$ since I logged in at 7.30

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The Pound taking another battering this morning. Perhaps the traders read this article on their way to work.......

http://www.bloomberg.com/apps/news?pid=206...id=ae22dyDXnEP8

"Axa Investment Sees Pound-Euro Parity in Six Months (Update2)

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By Lukanyo Mnyanda

Sept. 23 (Bloomberg) -- The U.K. pound may weaken to parity against the euro in the next three to six months amid concern the government won’t rein in spending and cut its budget deficit, according to Axa Investment Managers.

Sterling may extend its 0.9 percent drop in the past week amid a “lack of any clear fiscal stabilization plans, against the backdrop of rising government borrowing,†Christopher Iggo, chief investment officer for fixed income at Axa SA’s money- management division, said in an interview in London today. Axa also recommended investors buy U.K. index-linked bonds as record borrowing stokes inflation.

The British currency fell against 15 of its 16 most- actively traded counterparts in 2008 as the global financial crisis pushed the economy into a recession. Prime Minister Gordon Brown’s government had a 16.1 billion-pound ($26.5 billion) budget deficit in August, the highest for that month since modern records began in 1993, a report showed Sept. 18.

“It is quite conceivable that we go to parity against the euro, not because the euro has any great attractions to it but because sterling and the dollar do have some downside risks,†said Iggo, who helps oversee the unit’s $821 billion of assets. “The Bank of England was even suggesting that sterling should be weaker in its quarterly bulletin. There was a piece saying the market maybe should reduce its estimate of the long-term fundamental value of sterling.â€

VWYF. ;):D

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[

“It is quite conceivable that we go to parity against the euro, not because the euro has any great attractions to it but because sterling and the dollar do have some downside risks,†said Iggo, who helps oversee the unit’s $821 billion of assets. “The Bank of England was even suggesting that sterling should be weaker in its quarterly bulletin. There was a piece saying the market maybe should reduce its estimate of the long-term fundamental value of sterling.†[/i]

VWYF. ;):D

Who to believe BolloxLondonman or Dope on a teet? :lol:

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don't get it ?

edited- ah, I think I got it. :D

:lol: ah, isn't it great to have friends who like you ?

Classy friends, I should add :rolleyes:

So the french (BNP & Axa) are long the Euro, while GS is long £ - let's see who's right ...

In the meantime I'd like to point out that the French banksters are no better than their anglosaxon counterparties, in that they don't give a monkeys about helping the Germans and damaging the French economy, as long as they make a quick buck.

Hardly surprising.

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Care to share it with those of us who dont 'get it' ?

Also, what is VWYF ?

They are referring to myself, mariconinspain doesn't like me, what a shame :lol:

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:lol: ah, isn't it great to have friends who like you ?

Classy friends, I should add :rolleyes:

So the french (BNP & Axa) are long the Euro, while GS is long £ - let's see who's right ...

In the meantime I'd like to point out that the French banksters are no better than their anglosaxon counterparties, in that they don't give a monkeys about helping the Germans and damaging the French economy, as long as they make a quick buck.

Hardly surprising.

how do you know goldman sucks are long, because they told you so ? you seen the actual contracts have you.......

just like the bankrupt of england & guberment are telling you deflation is the worry

you are young & gullible my virtual internet warrior.

watch what they do, not what they say. :ph34r:

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how do you know goldman sucks are long, because they told you so ? you seen the actual contracts have you.......

just like the bankrupt of england & guberment are telling you deflation is the worry

you are young & gullible my virtual internet warrior.

watch what they do, not what they say. :ph34r:

by the same token, BNP and Axa are not long the Euro either - in fact they could be pumping it to short it, my friend

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I already know the answer to that, as do a few others. :D

Sure, is there anything at all you don't know the answer to already? :rolleyes:

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Sure, is there anything at all you don't know the answer to already? :rolleyes:

yes, why some people feel the need to fantasize on internet forums & make up stories about european portfolios & banking careers.

Edited by grumpy-old-man-returns

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yes, why some people feel the need to fantasize on internet forums & make up stories about foreign living, european portfolios & banking careers.

or actually owning any gold or french properties

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yes, why some people feel the need to fantasize on internet forums & make up stories about european portfolios & banking careers.

is it because they are ******* ?

just a thought :lol:

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