The £ Is Dropping

[winkie]

Crazy times. I am sure (NOT) that the new lows for the pound will help our exports. Job done for Carney!

2% inflation is his target....rising cost of imports/fuel.....love to know who has the money to pay it.....less driving and traveling, eating out, going out....doing things differently for less maybe.

[GreenDevil]

That's a bit unfair, but you probably would get more proactively from an ornamental shrub.

I heard talking to plants works wonders.. Clearly not in Osbos case.

[reddog]

2% inflation is his target....rising cost of imports/fuel.....love to know who has the money to pay it.....less driving and traveling, eating out, going out....doing thing's differently for less maybe.

our economy is so based on consuming importants, so it is hard know what they will want to do for the best.

Worth bearing in mind though that they ran 5% inflation after the credit crunch without batting an eyelid.

[thehowler]

You think they will raise rates? WOW!

I think the gates of delirium are flapping open in the wind and Carney looked a little spooked in the last presser. Ostensibly we still have a chancellor, though only because the politicos are distracted by leadership contention, but I fear this feeding frenzy masks a deeper malaise: the vast, terrifying unpredictability of the Brexit referendum outcome is now being transferred to the real political process and they're all arguing over leadership as it's something they feel comfortable with, rather than facing the oncoming typhoon of hard Brexit choices. The vanishing of the political class after the result was astonishing and once they finish the party wrangling they risk outrage from half the populace at their first decision. Are we still governable as the union?

In light of all that I think Carney is pushing for rate cut and more QE but that tactic might be a busted flush. I think the last intervention was back in the 80s, at $1.05, and just wondered at what point he might be minded to announce a raise.

[Maynardgravy]

Let it crash they say, the clowns are letting it crash, just because they simply haven't got a clue what to do.

Perhaps Carney is a plant?

My money's on mineral.

[Riedquat]

Pretty sure some economists have said the choice is between crashing the economy or the currency first.

The choice may have been made.

Where's the evidence that the economy is going to get crashed though? What economic impact there looks like being (assuming the clowns don't deliberately wreck it) looks like losing 5p down the back of the sofa and crying disaster.

[Uncle_Kenny]

The government can chose to either destroy the currency, or destroy asset prices, (primarily stocks and real estate). It would appear that the former has been chosen. I predict the pound will lose a lot of value very quickly. The government/bank of England will react to little to late. Watch out for Osborne and Carney shrugging their shoulders in their resignation speeches and claiming that the collapse of the pound was a 'Black Swan' and couldn't be foreseen by anyone, even though back in 70's the American government had to issue bonds denominated in Swiss Francs because everyone refused to take dollars.

They will disappear from public view for a couple of months and then reappear as 'consultants' for some dodgy hedge fund/investment bank/Beelzebub and banking several million a year. (In Swiss francs of course)

Get your money out of the bank and buy BP shares, gold, bitcoin, racehorses and French vineyards.

[Bland Unsight]

Where's the evidence that the economy is going to get crashed though? What economic impact there looks like being (assuming the clowns don't deliberately wreck it) looks like losing 5p down the back of the sofa and crying disaster.

Stocks which depend on the health of the UK economy getting hammered, 10 yr gilt yield at 0.77%, sterling down over 12% against the dollar in a fortnight.

What are you looking for here, by way of evidence? Nigel Farage to cut his own dick off and wander the streets of London offering it to strangers and screaming "What have I done?"

OK, the world is not about to end, but as advertised there has been a shock to the economy and there is now a good chance of a recession.

[FreeTrader]

Sterling currently trading at $1.296.

[999house]

At what point do they have to raise rates?

[Panda]

We are living in unprecedented times...

How low will she go?

Edited July 6, 2016 by Panda

[Uncle_Kenny]

1.29 passed

[Panda]

$1.2849

Edited July 6, 2016 by Panda

[Uncle_Kenny]

According to the xe app the £ hasn't been this weak in the last ten years. It has blown through the level seen in the depths of the 2008 financial crisis.

[Venger]

Stocks which depend on the health of the UK economy getting hammered, 10 yr gilt yield at 0.77%, sterling down over 12% against the dollar in a fortnight.

What are you looking for here, by way of evidence? Nigel Farage to cut his own dick off and wander the streets of London offering it to strangers and screaming "What have I done?"

OK, the world is not about to end, but as advertised there has been a shock to the economy and there is now a good chance of a recession.

Right on commander.

(It's a joke Riedquat should understand, going from his avatar).

Moneyweek

Will the pound fall below parity with the US dollar?

By: Dominic Frisby

30/01/2013

The pound had been wavering just below the $1.40 mark for several months when, in late June 1984, it slid below. It made its way lower for a period of several months, before reaching an eventual low of $1.04 on February 26, 1985.

http://moneyweek.com/will-the-pound-slump-against-the-dollar-62430/

[evetsm]

According to the xe app the £ hasn't been this weak in the last ten years. It has blown through the level seen in the depths of the 2008 financial crisis.

I'm told the pound hasn't been this weak for 30 years

Edited July 6, 2016 by evetsm

[200p]

Here's some history on the Pound.

.....

And then Norman Lamont (UK's Chancellor of the Exchequer) decided to take the pound out of the ERM.

This immediately devalued the pound, and the results were dramatic - the pound plummeted in value, falling to $1.75 within a month, and to just over $1.40 in five months.

Anyone starting a two-week holiday in early September, 1992, might have seen a $1000 hotel bill effectively rise by over £100 from the day they arrived to the day they actually paid the bill. And in six months the pound had been devalued by more than 25%. .....

Full article:

http://www.miketodd.net/encyc/dollhist-graph2.htm

Interestingly, the FTSE doubled from 1980 to 1985

Edited July 6, 2016 by 200p

[frederico]

And then the housing market crashed big time

[frederico]

The people posting on here are incredibly useful to help see the wood from the trees.

Rates are going to go up then as the pound is plummeting . Foreign money is leaving the country like we have the plague.

People have got to be pulling money out of all sorts of funds in fear of being locked in.

[winkie]

What we need is other central banks to start more easing....balance it out a bit like before.

[spyguy]

The world has changed since ERM exit /93.

There's no big well of exports i nthe UK, waiting for the pound to be lower.

Trade is done on contracts these days. Any price change occurs when the current contract ends.

[cool_hand]

Why is Carney talking about cutting rates when the £ is being destroyed?

Surely if the pound continues to fall a rate rise must happen?

[Barnsey]

Why is Carney talking about cutting rates when the £ is being destroyed?

Surely if the pound continues to fall a rate rise must happen?

It really is a bizarre situation, most in the know expecting 1.16 by the end of the year where it stabilises.

Carney hoping that foreign investment will come to the rescue because of the weak £ is a false hope IMO, at least until some sense of economic stability/political unity returns.

[Blod]

Carney will be vigilant. At his next scheduled speech no doubt he'll be asked about exchange rates, where he'll acknowledged the situation and point out that the BOE must maintain stability. As as the inevitable jump in inflation he'll ignore that as they have done in the past. Rates were dropped in haste raising them will need years of crushing inflation to devalue the bubbles created.

[winkie]

Why is Carney talking about cutting rates when the £ is being destroyed?

Surely if the pound continues to fall a rate rise must happen?

This∆....nothing makes sense anymore, what is it this substance we work hard for?....who will continue to have faith and believe in it if we can no longer protect it?