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Explain Yourself, Dr. Bubb

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Dr. Bubb:

I recall that you predicted that the dollar would fall again slightly before the end of the year. You were right, of course--much to my surprise, I might add. (I thought the pound would continue a slow slide for at least the next six months.)

But I can't recall two other things:

1) What economic factors did you base that prediction on? (Did you just guess that we--the U.S.--would have a terrible trade balance report?)

2) What do you think will happen to the dollar during the coming year? And why?

Because I'll be purchasing my British home in American dollars, I have to hope that the dollar will get back to its historic level (about $1.60 per pound) as well as that British house prices will get back to more realistic levels. (I'm waiting for 2001 prices again.)

Thanks in advance for your comments (and for anybody else's as well).

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Not DrBubb but it would seem to me the $US/GBP rate will depend quite a lot on what happens to interest rates between the countries. Globally the are both overvalued (by quite a lot I think) but between each other its probably going to be a lot to do with cash seeking interest rates. If the US continues to raise interest rates and the BOE of does not I would expect the £ to fall further.

Of course there is the possibility, but I consider it unlikely, of the $ crashing if an asian bank does a big sale and a bunch follow suit. Not sure what would happen to the £ in this situation though.

The low inflation report in the US announced today will likely strengthen the $ as well a bit.

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Not DrBubb but it would seem to me the $US/GBP rate will depend quite a lot on what happens to interest rates between the countries. Globally the are both overvalued (by quite a lot I think) but between each other its probably going to be a lot to do with cash seeking interest rates. If the US continues to raise interest rates and the BOE of does not I would expect the £ to fall further.

Of course there is the possibility, but I consider it unlikely, of the $ crashing if an asian bank does a big sale and a bunch follow suit. Not sure what would happen to the £ in this situation though.

The low inflation report in the US announced today will likely strengthen the $ as well a bit.

Thanks for your insight. I've been expected the continuing rise in U.S. interest rates to keep the pound on a sliding course. But that hasn't happened within the past month. The pound has strengthened a bit. I guess I don't understand why. :unsure:

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Thanks for your insight. I've been expected the continuing rise in U.S. interest rates to keep the pound on a sliding course. But that hasn't happened within the past month. The pound has strengthened a bit. I guess I don't understand why. :unsure:

I think some expected UK interest rates to fall, and they didn't so the market readjusted. The rates generally take account of what people think interest rates are going to do in the short term, not what they are right now.

I am surprised though, after spending a couple of years in the US I can't understand how the £ manages to maintain its level against the $. The buying power with £ in the US is pretty incredible.

Sucks for me as a price my product in $US, so I am hoping for a readjustent in the same way you are :)

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I think some expected UK interest rates to fall, and they didn't so the market readjusted. The rates generally take account of what people think interest rates are going to do in the short term, not what they are right now.

I am surprised though, after spending a couple of years in the US I can't understand how the £ manages to maintain its level against the $. The buying power with £ in the US is pretty incredible.

Sucks for me as a price my product in $US, so I am hoping for a readjustent in the same way you are :)

Thanks again.

It's difficult enough trying to time one market, let alone two!

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YES.

I forecast the upturn in Sterling from about $1.70 towards the end of 2005.

I do NOT always get it right, but my tecniques can sometimes yield some impresive results.

I caught THE original top in the dollar, the bottom in Gold, and some good trading opportuntities

in stocks along the way.

I use charts and fundamentals. But in this case, my currency forecast was based on:

+ Charts: The $1.70-ish level is an obvious potential support level using my chart techniques

+ Cycles: The dollar bottomed about one year ago, and important turns in curency often happen around the end of a calendar year

+ Fundamentals; US corporations were allowed to repatriate money at lower tax rates duing 2005. The cahnge started at the beginning of the year, and is ending now

AND SO thee was nothing magical or mysterious about it.

Ah, so I shouldn't expect the pound back at $1.60 anytime soon. Too bad (for me).

I was thinking that Britain's recession (and thus its drop in currency value) would start ahead of ours, which might give me a window of opportunity (6 months or so?) to purchase a house in England before the dollar also tanked.

I guess I need a Plan B. <_<

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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