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durhamborn

Sterling may become the Swiss franc on steroids.

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http://www.telegraph.co.uk/business/2017/02/05/sterling-may-become-swiss-franc-steroids/

 

Forget inflation.No need to put interest rates up.QE to infinity.Its all ok.The world is going to pile into sterling as the safe place to store wealth.

The ironic thing is they may not be far wrong on the direction though.The $ index looks like its in a bear market already and once the UK is outside the EU,if they crack money would flow here probably.However with inflation running way ahead of the curve would people want sterling,or more likely sterling assets? (stocks/gilts/property)

Sell gold assets in March?

 

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If the debt bubble collapses it's game over for sterling. You'll sooner be wiping yer bum with the Queen's nose than seeing £ become a bastion of global wealth.

Normally IRs moving up would be good for £.

But because of the nature of the ponzi, everything you talk of will go south with the economy. £/stocks/gilts/property

Just like in 2008.

That's why it will be more QE imo., in which case only the £ goes down and everybody with assets lives happy forever, and they all go out and vote for the hand that feeds them. I'm pretty sure the Romans figured this out some centuries ago.

Edited by adamLancs

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39 minutes ago, Wayward said:

is this a joke..?  sterling to be the sweetest smelling turd in the park?

I thought i had been drugged when i saw it.Then thought it was an April the 1st article that had slipped out by accident.Sterling,the great store of wealth.Its back to 1899 again.That inflation your about to see is only a passing thing.My Chinese suppliers however laughed when i asked if i could pay in sterling.They actually did laugh.

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1 hour ago, durhamborn said:

I thought i had been drugged when i saw it.Then thought it was an April the 1st article that had slipped out by accident.Sterling,the great store of wealth.Its back to 1899 again.That inflation your about to see is only a passing thing.My Chinese suppliers however laughed when i asked if i could pay in sterling.They actually did laugh.

What do they want paying in?

Dollars Id guess.

Do you pay into an account outside of China i.e. one where they can keep the cash outside of China gov eyes?

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Interesting dilemma [I hold a lot of e. right now - enough to buy several UK houses for cash - and would like pounds but think that even 90p per euro is mediocre value for money. That's before you consider the ridiculous price of real estate, just looking at cost of other stuff / life. ]

HPC - comprehensively and consistency wrong on HPI since 2004 [sorry guys I DO wish that was not true but it is], not sure of the record on currency.
Telegraph and especially AEP on currency - Just comprehensively and consistency wrong.

Actually what the article says is that Bank of America advises to expect a dip as article 50 is trigerred and then a steady rise on fundamentals.

How is BoA history of predictions on currencies?

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I checked just a few weeks ago, I was expecting an IRS refund (enough to make me debt free, so an important day for me).

10 years ago is a good reference point because its before the 2008 QE / ZIRP b#llocks. 

The change in X-rates since 2008 would negate most of paper gains for most people. I don't think this has played out yet, we have a terrible economy not enough natural resources (N.Sea Oil gone), decades of unemployed people who probably unemployable, spending beyond our means (everything on credit), borrowing to out bid each other (brain damaged populace) to buy houses (in to massive bubble), massive debts everywhere, huge imports (trade imbalance).

  THE FUNDAMENTALS DON'T LOOK GOOD  

Either the pound or house prices slide downwards. (probably both)

Over the last 10 year period we have a weaker currency than India !!!

Forgot about being the new Swiss Franc that would require some sort of miracle.  

   

x-rates.png

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52 minutes ago, Stateless said:

 

  THE FUNDAMENTALS DON'T LOOK GOOD  

Forgot about being the new Swiss Franc that would require some sort of miracle.  

I'm as sceptical as you, but bear in mind things go in cycles.  The pound might be at the low end of possibilities currently, and may go even lower when A50 is triggered.

Yes the UK economy is a property Ponzi as things stand.  But maybe some transformation will happen over the next few years.  Also there is no shortage of other countries up the effluent stream without a means of propulsion (as someone said on here the other day).

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Worth a read if interested. 

https://www.ft.com/content/60c23bd8-dd16-3b07-9d8a-62ed73557cd7

Possible short run strength (if economy holds up) v long run (post-brexit) equilibrium 

Such a wide range of possible outcomes at this stage hedging exposure may be beneficial (or not, who knows)

Most scenarios (as everything in Brexit) assume EZ/EU will continue as baseline. Ofc it may not but again, who knows.

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On 2/7/2017 at 3:28 PM, spyguy said:

What do they want paying in?

Dollars Id guess.

Do you pay into an account outside of China i.e. one where they can keep the cash outside of China gov eyes?

HSBC in Hong Kong and they will only take US$s.They then "pay" to their factories account on the mainland,HSBC are the bank of choice.

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