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Cornish Pasty

Gb£ Tanks Back To Two Week Low Vs Dollar

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The pound may float against the US$ till next March when OPEC will be allowed to sell Oil in any currency they want and then no one will need to hold US$ and it will go bang big time even with the help of china intervening.

As the US$ goes tits up it will have an effect on the £Pound and then the £Pound will fail against the euro

Can a major currency drop 30% in a year, well you could always ask GWB or green-spam.

£1.00=1.10eu anyone ! (revised up from 1:1)

The euro is going to be the worlds reserve currency so get use to it.

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The pound may float against the US$ till next March when OPEC will be allowed to sell Oil in any currency they want

Errr not sure what you're talking about here, can you elaborate?

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http://www.energybulletin.net/123.html

I think this is what he's on about.

BUT if it happens it would be in part at first rather than a wholesale switch. And it won't be tomorrow.

Problem is that the Euro is relatively new, not without its own risks (eg EU integration/bust up, currency collapse and the EU is inherently less productive and long term demogrpahics and social welfare models will put it way behind US and China, India et al in 20-30yrs). It might happen but will be part of BIG politics.

Euro as worlds reserve currency? I don't think so. Its a declining growth prospect relative to others in the world. The Greenback is under pressure sure but no economy has the ability (or record) to consistently rebound (after a period) from slings and arrows.

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Sterling has fallen to a 2 week low against USD on the back of a record current account deficit. The deficit of £10.2 billion is the highest since records began.

the defecit figure was bloody shocking!!!!!

...even more so the capital spending figures.

I still don't see the IR cut on the cards though,ECB and fed are both going up...fed might be going higher than many expect!!!....especially if the chinese do a number and re-value inQ2(I'm expecting this as the iran business will come to a head,and there would be nothing better for commie china/russia to pummel the states like a bit of hyperinflation)

....shame really as I think the US have a much better economic model.

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The pound may float against the US$ till next March when OPEC will be allowed to sell Oil in any currency they want and then no one will need to hold US$ and it will go bang big time even with the help of china intervening.

[...]

The euro is going to be the worlds reserve currency so get use to it.

I don't think is is going to be OPEC as a whole (although they have vaguely discussed moving away from the dollar in the past). I think it is just Iran.

Oil has been sold in euros before -- Saddam's oil for food program.

frugalista

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I don't think is is going to be OPEC as a whole (although they have vaguely discussed moving away from the dollar in the past). I think it is just Iran.

At the moment all oil is sold in London and New York, and only for dollars. When the Iranians open their oil trading center, anyone will be able to buy and sell oil there in any currency: and that means that the majority of the world will rapidly abandon trading in London and New York... why pay in dollars when you can pay in a currency of your choice? Except for Americans, there's simply no benefit to _not_ buying and selling in Iran.

That alone should have a major impact on the value of the US dollar, as countries won't need to earn dollars in order to buy oil: I'd imagine that pretty much every country other than America and Britain wants the choice of buying oil in other currencies.

And, of course, if it does happen then Bush can forget any plans for invading Iran: pretty much the entire world will turn on them.

Edited by MarkG

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I don't think is is going to be OPEC as a whole (although they have vaguely discussed moving away from the dollar in the past). I think it is just Iran.

Oil has been sold in euros before -- Saddam's oil for food program.

frugalista

have you not read my posts on why there WILL be war with iran shortly??

it ain't just about oil,it's about banking as well.

the torah spells it out pretty plainly....and banking and debt are the biggest threats to freedom we have.

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On the subject of China - China has chosen to underpin the USD by maintaining a fixed peg of 8.3 Yuan which has not moved since 1997. When the dollar dropped, from 2002 to 2004, China benifitted by growing at incredible rates, to the 4th largest economy, this also caused massive rises in commodity prices.

Dispite this, inflation in the rest of the world appeared subdued.

Now the USD IS rising. We can see a strong trade imbalance.

Remember - China is still deadly focused on maintaining its peg dispite pressure from the US.

Remember - for the dollar, this means other trading countries are competing against not just America, but also China in terms of dollar goods.

I ask you - how then can the dollar fall? If dollars buy Chinese labour and output at this fixed rate even when loans have been given away for free by America, and Chinas production is increasing, not decreasing?

If the USD cannot fall, as the rest of the world buys many cheap goods with it, then the question has to be posed the other way around. The so far unthinkable - What if the USD rises?

To many countries, who share the same language, and thus intimate trade with the worlds most advanced economy - the US, who perhaps have seen a huge glut of expansion in unprodutive ways, it would then work in reverse. Suddenly thier trade situation would be based on productivity, not a matter of printing domestic wages and full employment even if the jobs have to be invented.

Rising trade deficits and inflation would start to show, as the dollar rose.

Higher interest rates would dampen asset prices. Countries which have seen meddling governments in everyday life, and falling productivity, and very high money expansion, which had been strongly masked through cheaper goods in the supply chain, would then find what clothes they have been wearing as the tide receeds.

I believe a rising dollar would be very interesting and is definately not to be discounted.

Edited by brainclamp

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At the moment all oil is sold in London and New York, and only for dollars. When the Iranians open their oil trading center, anyone will be able to buy and sell oil there in any currency: and that means that the majority of the world will rapidly abandon trading in London and New York... why pay in dollars when you can pay in a currency of your choice? Except for Americans, there's simply no benefit to _not_ buying and selling in Iran.

How realistic is this? Iran is not exactly an easy country is which to do business - I know, I've tried. Corruption and nepotism are endemic and contracts, where they exist, are pretty much unenforceable without powerful local patronage. Are all the trades going to be governed by the Iranian 'legal system' - such as it is?

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On the subject of China - China has chosen to underpin the USD by maintaining a fixed peg of 8.3 Yuan which has not moved since 1997. When the dollar dropped, from 2002 to 2004, China benifitted by growing at incredible rates, to the 4th largest economy, this also caused massive rises in commodity prices.

Dispite this, inflation in the rest of the world appeared subdued.

...

Not so. The Chinese revalued this year. Current rate is about 8.07 Yuan to the $US.

The Chinese also instituted a tightly managed float of the Yuan at the same time as their initial revaluation. In theory I believe it can move up to 0.33% per day (so maximum up every day would give over 10% per month), but in practice it's a lot less than that. I think the Yuan is currently appreciating at about 5% per year, but I will bow to any of our forex experts in this :).

The US government (and opposition, to be fair :lol:), of course, is not satisfied with this gradual approach, and use every opportunity to lecture the Chinese about the benefits of allowing a completely free float. This lecturing also allows them to ignore the effects of their own fiscal irresponsibility.

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the torah spells it out pretty plainly....and banking and debt are the biggest threats to freedom we have.

What, are you a rabbi already?

Oy vey, vordrei mir nicht mein spodick!

frugalista

How realistic is this? Iran is not exactly an easy country is which to do business - I know, I've tried. Corruption and nepotism are endemic and contracts, where they exist, are pretty much unenforceable without powerful local patronage. Are all the trades going to be governed by the Iranian 'legal system' - such as it is?

This rings true. The Bourse would have to be managed / guaranteed by a more advanced country. The obvious choices are France and Germany I guess. Both Euro countries and big oil importers.

frugalista

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On the subject of China - China has chosen to underpin the USD by maintaining a fixed peg of 8.3 Yuan which has not moved since 1997. When the dollar dropped, from 2002 to 2004, China benifitted by growing at incredible rates, to the 4th largest economy, this also caused massive rises in commodity prices.

Dispite this, inflation in the rest of the world appeared subdued.

Now the USD IS rising. We can see a strong trade imbalance.

Remember - China is still deadly focused on maintaining its peg dispite pressure from the US.

Remember - for the dollar, this means other trading countries are competing against not just America, but also China in terms of dollar goods.

I ask you - how then can the dollar fall? If dollars buy Chinese labour and output at this fixed rate even when loans have been given away for free by America, and Chinas production is increasing, not decreasing?

If the USD cannot fall, as the rest of the world buys many cheap goods with it, then the question has to be posed the other way around. The so far unthinkable - What if the USD rises?

To many countries, who share the same language, and thus intimate trade with the worlds most advanced economy - the US, who perhaps have seen a huge glut of expansion in unprodutive ways, it would then work in reverse. Suddenly thier trade situation would be based on productivity, not a matter of printing domestic wages and full employment even if the jobs have to be invented.

Rising trade deficits and inflation would start to show, as the dollar rose.

Higher interest rates would dampen asset prices. Countries which have seen meddling governments in everyday life, and falling productivity, and very high money expansion, which had been strongly masked through cheaper goods in the supply chain, would then find what clothes they have been wearing as the tide receeds.

I believe a rising dollar would be very interesting and is definately not to be discounted.

I agree with the view that the USD will be tied to the Yuan and the rest of the Asian trading bloc. The US deficit relies on such a balance. I hold nearly all our STR proceeds in USD and hope to see 20% appreciation against the pound within a year. Add 40% depreciation in UK house prices and thngs will be tickety boo. My bet is that sterling will get very shaky in the new year when Gordon has to announce that his revised GDP will need further revision to negative growth in 2006. With another "black Tuesday" in the offing house prices are doomed next year.

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I hold nearly all our STR proceeds in USD and hope to see 20% appreciation against the pound within a year. Add 40% depreciation in UK house prices and thngs will be tickety boo. My bet is that sterling will get very shaky in the new year when Gordon has to announce that his revised GDP will need further revision to negative growth in 2006. With another "black Tuesday" in the offing house prices are doomed next year.

You are a very brave man - good luck !

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Guest Charlie The Tramp

With another "black Tuesday"

In the past Monday and Wednesday were the black days, Stock Market crash and withdrawal from the ERM.

Maybe black Tuesday could also be infamous in 2006 history which may at present still remain hidden.

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http://www.energybulletin.net/123.html

I think this is what he's on about.

BUT if it happens it would be in part at first rather than a wholesale switch. And it won't be tomorrow.

Problem is that the Euro is relatively new, not without its own risks (eg EU integration/bust up, currency collapse and the EU is inherently less productive and long term demogrpahics and social welfare models will put it way behind US and China, India et al in 20-30yrs).

Europe is barely growing and in parts they're basically in recession (like Italy), debt to GDP is actually greater than that of the US and unemployment higher and productivity is lower, and productivity growth lags behind. Not to mention the burden that Germany faced integrating East Germany is now faced by Europe as a whole as we now try and bring Eastern Europe and soon parts of the Balkans up to Western standards... with the risk of killing off their vibrant economies with our heady regulations.

Above all in the Eurozone the technicals aren't right either, they have M3 growth in excess of 10% whilst this is still in single digits in the US and rates are half that of the states, there is little incentive in holding the currency when looking at the yields.

The currency pairings obviously mean that if one is bad then the other is automatically good, but the entire seesaw can be crooked, as we can see from gold v. a basket of currencies.

Edited by BuyingBear

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  • 301 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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