Thursday, December 11, 2008

How can we expect anything but inflation in the future

Value of pound falls to 28-year low

"Mr Darling has refused to tell MPs how much further sterling would have to fall before he became worried about the value of the British currency. " ...I imagine he ,GB and Lord Mandy will keep it under their hats until it is so low, perhaps 1pound buying 80euro cents, before they bring it up. Making a case that joining the euro is the only possible option, by which time GB will have bought sterling with all his euros bought from selling the countries gold in 2000, and sell himself as a financial wizard for making the country so much money. Then the real pain will hit the UK, as all fiscal control is removed. Even though, and I hate myself for saying this, as I still have savings in sterling, removing control of interest rates from vote obsessed politicians may not be all that bad.

Posted by bystander @ 12:40 PM (2257 views)
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19 thoughts on “How can we expect anything but inflation in the future

  • WHY OH WHY!!! Do they keep saying “Holidaymakers”………. If it’s too expensive,you don’t go. Simple as that!……..It is the Brits living abroad on UK income that are suffering…….and there are a lot of them.

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  • have a look at the following link

    http://www.dailymail.co.uk/news/article-1093438/Just-ONE-euro-pound-Cost-European-holidays-soars-sterling-sinks-18-year-low.html

    and tell me is it just me or is darling really loving a man dressed as a woman hanging off him, scroll down for pic.

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  • Click here for the video nasty of Darling and Walliams.

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  • I’m trying to put a positive spin on this situation.

    Here goes.

    My savings are mainly in Sterling for a house I wish to purchase in Sterling.

    I won’t holiday abroad for a few years (kids to young to appreciate it – need to harden them up paddling in our waters).

    It is true that uk purchases must now be looking cheap for those in US/Euroland.

    We may well have an influx of tourists this year taking advantage of our devalued currency.

    There feel better already – no I don’t !

    phd

    Who on earth organised that party.
    Golden rule for Politicians – don’t appear with comedians/iens
    Especially ones in a dress that shouldn’t be.
    Who thought that character was suitable to have around children and as for Emily Davidson (I’m a lady) children shouldn’t be allowed near her/him either.

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  • have a look at this link, relating to currency and costco

    http://hosted.ap.org/dynamic/stories/E/EARNS_COSTCO_WHOLESALE?SITE=NVLAS&SECTION=HOME&TEMPLATE=DEFAULT

    Stronger dollar hurts Costco 1st-quarter results
    Costco operates 550 warehouses in the U.S. and Puerto Rico, Canada, the U.K, Korea, Taiwan, Japan and Mexico

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  • Couldn’t agree more str 2007. We all wanted houses to be cheaper, but in our own currency would be nice. looks like GB and all will have the last laugh as there may be an influx of euro/dollars to buy the properties, even at existing overvalued prices, simply because they are worth much less in euros or dollars. Nice to know what GB and his mob think about those of us who save and would love to buy a truly affordable home. In short ‘nothing’.

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  • The Euro is the most ludicrously overbought currency right now, that said parity is a possibilty before the realisation dawns.

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  • @str 2007
    There might have been an educational aspect to the kids meeting Darling that we didn’t see – he might have picked up something useful.

    @bystander
    Don’t the foreigners need to be willing as well as able in order to create demand? Are they going to get their revenge for chiantishire – regione newcastle broon?

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  • “regione newcastle broon?”…….LOL:0)

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  • @bellwether,
    Why do you say that? Because the cracks in the euro-zone will show soon?

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  • stillthinking , individually the euro zone conuntries are no stronger than the UK, monetary policy tailored for Germany is inappropriate for weaker states eg Ireland, Greece, Spain, Italy. People confuse Eurozone with Germany at somelevel although even the Germans are starting too struggle with exports – a strong Euro is only making matters worse.

    Add to that the lack of political will uniting the whole enterprise and it could crack wide open under stress.

    Currency exchange is the least scientific of all markets and most likely to create irrational bubbles. The £ trading at > $2 usd about a year ago was a joke, although one that I in fairness missed until too late

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  • Hmmm. I wonder how low sterling will go, and maybe overshoot, but I think that even the masses are going to start moving their savings away soon. When that starts….

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  • @titaniccaptain – “Any of you think that interest rates could go back up anytime soon?……………..playing devils advocate here” Thursday, December 11, 2008 01:06PM

    In the short term (12-18 months) I see rates being cut to as low as 1 or even 0.5% thereafter as inflation becomes a potential major problem I expect rates to begin rising. Hardly an earth shattering prediction of course because when rates pretty much hit that level there is only one way they can go which is up (unless they remain static for several years but I think this unlikely)

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  • TC and Jack c, I have another scenario, GB pushes UK into eurozone and we are trapped by ECB and EU beaurocracy controlling our interest rates, therefore no recovery until agreed by Frankfurt

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  • str2007 (and others),

    There isn’t going to be a massive influx of foreign buyers. Let’s imagine a fictional French property company called Voie Intérieur (extra points if you spot the connection). They’re trying to flog British houses to French buyers. Here’s what the brochure would say:

    “EXCELLENT OPPORTUNITY! Buy a pokey, damp, overpriced flat in a cold wet overcrowded country. The value of the flat will fall by 15% a year (or 30% if measured in Euros). You can’t even use the equity in your French house because the French banks won’t allow you to do something that stupid; and anyway the property market in France is on the turn too. The country’s economy is screwed and unemployment is set to rise, so you won’t get much rent for your flat. You’ll probably find the place trashed by your DSS tenants anyway.”

    Although some French buyers might be interested in a pied-à-terre in central London, they couldn’t care less about Brighton or Bristol or Birmingham. They aren’t going to buy seaside property in Cornwall because the French coastline is warmer and much easier to get to (thanks to their toll autoroutes and TGV).

    As for the influx of tourists, maybe from the Euro-zone, but they will be offset by the Americans not coming.

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  • bystander & titaniccaptain – you could both be correct with your scenario’s – after all when Gordon sold off the Gold at rock bottom prices (for diversification purpose so he claimed on the A Marr Sunday show) what did he buy?

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  • Drewter

    Thanks fo cheering me up.

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