Crashing pound, do they raise interest rates

[knock out johnny]

13 minutes ago, evetsm said:

North. Sea. Oil

Thr greatest saviour the UK ever saw, and now it's gone and we're in worse debt by any measure than we were in '76 when we were in the arms of the IMF. 

 

Is fracking our 21st century North Sea Oil?

[ccc]

34 minutes ago, knock out johnny said:

Is fracking our 21st century North Sea Oil?

Problem is everyone else is at it though ?

 

Future of oil is confusing. 

[thehowler]

Getting the internet of things into our homes could improve our lives and drive consumer growth for the next decade. Or we get a form of Singapore - bar all restrictions/legislation/bonus limits - inside the M25 and the rest of the island selling coffee and tat to each other.

Regards the brain/skill drain to other shores, there are frequent where-to-run posts on here and I think it's clear that we don't have the clear tug of America/Canada/Oz that we did in the 70s/80s, the relocation dream is sullied and access to the world and its disparites is wide open.

[Tapori]

I think many here might underestimate the popularity of the UK in foreign countries. It's almost mythical.

The UK will always have the pick of the best brains - barring any stupid immigration limits - esp. as English is the main language of knowledge and business.

As a millionaire financier said (family friend): "You see,\much of the world will always see the UK as the Mothership/Motherland."

This is esp true with ex-British colonies - The Pull is always there and we have and can build on those links.

[Futuroid]

9 minutes ago, Tapori said:

I think many here might underestimate the popularity of the UK in foreign countries. It's almost mythical.

The UK will always have the pick of the best brains - barring any stupid immigration limits - esp. as English is the main language of knowledge and business.

As a millionaire financier said (family friend): "You see,\much of the world will always see the UK as the Mothership/Motherland."

This is esp true with ex-British colonies - The Pull is always there and we have and can build on those links.

Everyone in India wants to go to the USA. Well, they certainly did when I was recruiting there in 2005.

[zugzwang]

57 minutes ago, ccc said:

Problem is everyone else is at it though ?

Future of oil is confusing. 

The problem is one of irreversibly declining EROEI. Shale oil is even worse than conventional. Better off leaving it in the ground and trying to get high-altitude wind generation operational instead.

[frederico]

The MSM have been going bonkers about the crashing pound all day to day. Personally I have always suspected that the only way to rebalance was to devalue.

 

[cica]

3 hours ago, ccc said:

Problem is everyone else is at it though ?

As far as I know, there aren't that many countries sitting on a wealth of carbon-based fuel.

Fracking could be a way through from what I understand.

[Democorruptcy]

Do people really have that short a memory?

Sterling is down and we might get some inflation etc things are going to change, exports up and interest rates up etc. we needed this devaluation etc.

In 2007 it was £1 = $2, in 2009 it was £1 = $1.40, now £1 = $1.20. The main devaluation took place long ago and made no change.

In 2011 RPI was 5.6% and CPI 5.2% the base rate stayed at 0.5% 

 http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/september-2011/stb---consumer-price-indices---september-2011.html

 

 

[zugzwang]

Albert Edwards says stop worrying about the devaluation of the pound and start worrying about the devaluation of the renminbi instead.

Quote

The notoriously bearish Societe Generale strategist, renowned for making big calls on the state of the world, used his latest Global Strategy Weekly note to discuss the recent crash in sterling,which has seen Britain's currency plumb new lows on an almost daily basis. But Edwards argues in the note that the crash is not the most important thing happening in the forex markets right now.

In the note, sub-titled "Poundemonium diverts attention from the more important renminbi devaluation" Edwards says:

"We warned in June that “sterling will fall with or without Brexit – but the renminbi decline matters more” and so it does. The Chinese have accelerated the renminbi devaluation, taking it to six-year lows versus the US dollar. This is the key global story to focus on, not the pound."

Edwards' basic argument is that while everybody in the Western hemisphere clamours to talk about the pound's crash and its impact on Britain's economy, something more troubling is going on in the Far East. Investors, Edwards says, are substantially underestimating the importance of the continuing fall in the yuan (also known as the renminbi).

China stunned global markets by devaluing its currency last year and recently weakened it even further. The move initially drew criticism around the world, particularly from the US. The US argued that China's devaluation was simply a play to give the country an extra advantage in global trade, by making exports cheaper.

Edwards argues that it is actually the Chinese government's efforts to stem a growing housing bubble in the country but has the potential to create deflationary pressures globally, stunting the already sclerotic growth plaguing the world economy.

As he puts it: "With the Chinese economy set to slow noticeably over the next six months as the authorities restrain yet another housing bubble, it is the global deflationary impact of a weak renminbi that we need to watch closely and especially whether the targeted trade-weighted CFETS basket also breaks to new lower levels."

Edwards goes on to say: "Clearly prudence is now out of the window. Whether the renminbi falls to 7.1, 8.1 or 9.1 the story is the same. Investors are underestimating the magnitude and deflationary impact of renminbi devaluation. Sterling, meh!"

https://uk.finance.yahoo.com/news/albert-edwards-forget-pound-renminbi-120000015.html

[tomandlu]

Anyone posted this? (a bit of sanity from the Guardian):

https://www.theguardian.com/business/2016/oct/16/let-the-pound-fall-and-the-economy-rise

Quote

But put the Brexit vote to one side for a second and ask yourself the following questions: is the economy currently unbalanced? Is growth too dependent on consumer spending and asset price bubbles? Is the productive base of the economy too small? Is it a problem that the UK is running a balance of payments deficit worth 6% of GDP, bigger than ever before in peacetime?

If your answer to these four questions is yes – as it should be – then you need to accept that there is an upside to the falling pound. Indeed, many of those who are now talking about a sterling crisis were last year bemoaning the fact that Greece – trapped as it was inside the eurozone – did not have the benefit of a floating currency and so had to use a brutal internal devaluation involving wage cuts, pension reductions and welfare retrenchment to restore its competitiveness

 

[darkmarket]

So the market now looking at H2 2017 for a rate hike.

"Investors Shift to Greater Bets of BOE Rate Hike Than Cut

There’s a greater chance of the Bank of England raising interest rates than cutting them in the second half of 2017, overnight index swaps signal. Traders are re-evaluating how long monetary policy policy will remain accommodative following better-than-forecast economic growth data and BOE Governor Mark Carney’s suggestion two days ago that the prospect of faster inflation is diminishing the case for easing."

Chart inside too: http://www.bloomberg.com/news/articles/2016-10-27/investors-shift-to-greater-bets-of-boe-rate-hike-than-cut-chart

[TheCountOfNowhere]

3 hours ago, darkmarket said:

So the market now looking at H2 2017 for a rate hike.

"Investors Shift to Greater Bets of BOE Rate Hike Than Cut

There’s a greater chance of the Bank of England raising interest rates than cutting them in the second half of 2017, overnight index swaps signal. Traders are re-evaluating how long monetary policy policy will remain accommodative following better-than-forecast economic growth data and BOE Governor Mark Carney’s suggestion two days ago that the prospect of faster inflation is diminishing the case for easing."

Chart inside too: http://www.bloomberg.com/news/articles/2016-10-27/investors-shift-to-greater-bets-of-boe-rate-hike-than-cut-chart

Easing...THEIVING  More like.

[TheCountOfNowhere]

Just now, TheCountOfNowhere said:

Easing...THEIVING  More like.

The bankers want to rob us all blind one way ot the other, either via inflation and low rates or money printing and low rates.

 

Either way, some outcome, the 1%ers have everything the 99% are slaves ( again ).

[thehowler]

The pound having a plucky little rally today, up to $1.23. Back to $1.30 if Donald sweeps in?

[Errol]

12 minutes ago, thehowler said:

The pound having a plucky little rally today,

Not against what matters - gold. Gold up very slightly 0.03% so far today in GBP.

All paper is going in the toilet, so measuring ourselves against the dollar (or some other fiat currency) is a pointless exercise. They are pretty much all junk.

Edited November 2, 2016 by Errol

[TheCountOfNowhere]

Anyone still expecting the bankers to raise IRs ?

£ collapsed and ,assive inflation coming...hopuse prices at insane levels....and still they do nothing.

The only logical conclusion can be....they is what they want to happen.

Their policies have time and time again shown to make the rich ( themselves ) richer.

The only thing that will stop them is mass social unrest

 

Time to get out of the UK while the getting is good.

[kzb]

Trump/Clinton currently neck and neck in the latest poll.  Opinion on here seems to be, a Trump win will devalue the USD.

So maybe wait for the US election result before deciding on interest rate changes.

[SOLZHENITSYN]

6 minutes ago, TheCountOfNowhere said:

Anyone still expecting the bankers to raise IRs ?

£ collapsed and ,assive inflation coming...hopuse prices at insane levels....and still they do nothing.

The only logical conclusion can be....they is what they want to happen.

Their policies have time and time again shown to make the rich ( themselves ) richer.

The only thing that will stop them is mass social unrest

 

Time to get out of the UK while the getting is good.

I suppose that if TPTB are holding lots of $ assets, but have debts in £, then this will work very well for them.

[kzb]

6 minutes ago, TheCountOfNowhere said:

Anyone still expecting the bankers to raise IRs ?

£ collapsed and ,assive inflation coming...hopuse prices at insane levels....and still they do nothing.

The only logical conclusion can be....they is what they want to happen.

Their policies have time and time again shown to make the rich ( themselves ) richer.

The only thing that will stop them is mass social unrest

 

Time to get out of the UK while the getting is good.

Well...yes.  It's Brexit punishment.  They do want it to happen and the attack on the pound is deliberate.  Someone mentioned Goldman-Sachs are behind this attack.

[Futuroid]

5 hours ago, kzb said:

Well...yes.  It's Brexit punishment.  They do want it to happen and the attack on the pound is deliberate.  Someone mentioned Goldman-Sachs are behind this attack.

Of course, a giant worldwide conspiracy involving shadowy elites - it's so obvious isn't it, I'm kicking myself?

And here I was thinking it was because currency traders are starting to look at the underlying state of the UK ponzi economy and how badly affected by leaving the EU it could be. 

[GreenDevil]

6 hours ago, TheCountOfNowhere said:

Anyone still expecting the bankers to raise IRs ?

£ collapsed and ,assive inflation coming...hopuse prices at insane levels....and still they do nothing.

The only logical conclusion can be....they is what they want to happen.

Their policies have time and time again shown to make the rich ( themselves ) richer.

The only thing that will stop them is mass social unrest

 

Time to get out of the UK while the getting is good.

Where you off to then Count?

[darkmarket]

6 hours ago, TheCountOfNowhere said:

Anyone still expecting the bankers to raise IRs ?

£ collapsed and ,assive inflation coming...hopuse prices at insane levels....and still they do nothing.

The only logical conclusion can be....they is what they want to happen.

Here's Carney in June (emphasis mine):

"as expected, sterling has depreciated sharply. For given foreign demand, this will mean support to net trade, though this may well be dampened by uncertainty around future trading relationships. A lower exchange rate will also entail higher prices for imported consumer goods, energy and capital goods, and consequently lower real incomes."

He knew very well Brexit and his response would lead to lighter pockets. His justification isn't to make the rich richer of course (emphasis mine):

"the MPC will face a trade-off between stabilising inflation on the one hand and avoiding undue volatility in output and employment on the other."

The problem is this is not the remit of the MPC or the Bank. It's just another example of his acting in breach of his statutory remit. Maybe he genuinely believes high unemployment would be worse, and avoiding it's worth the decreased spending power.

So when you say:

6 hours ago, TheCountOfNowhere said:

The only thing that will stop them is mass social unrest

maybe the true intention is, the only thing that will stop mass social unrest is them.

http://www.bis.org/review/r160704c.pdf

[Funn3r]

1 hour ago, Futuroid said:

Of course, a giant worldwide conspiracy involving shadowy elites - it's so obvious isn't it, I'm kicking myself?

And here I was thinking it was because currency traders are starting to look at the underlying state of the UK ponzi economy and how badly affected by leaving the EU it could be. 

I suppose it's anecdotal but things look bad to me, our company is laying off, our competitors are laying off, and everything just has a bad feeling. They are building some large blocks of flats across the road from me and they are building them as slowly as they possibly can without admitting they are pausing it. Have feeling they know they will not sell when completed. Having said that I get the same feeling when visiting bits of the Eurozone. I don't go to the US but from outside I don't think such a strong dollar reflects the fundamentals of their economy either. So I think anything could happen to the pound v. other currencies.

[GeordieAndy]

24 minutes ago, Funn3r said:

I suppose it's anecdotal but things look bad to me, our company is laying off, our competitors are laying off, and everything just has a bad feeling. They are building some large blocks of flats across the road from me and they are building them as slowly as they possibly can without admitting they are pausing it. Have feeling they know they will not sell when completed. Having said that I get the same feeling when visiting bits of the Eurozone. I don't go to the US but from outside I don't think such a strong dollar reflects the fundamentals of their economy either. So I think anything could happen to the pound v. other currencies.

What industry are the layoffs in?