Friday, December 19, 2008

Thanks Gordon

Sterling slide is worst since 1931

The fall is sharper than the devaluations in 1992, after leaving the Exchange Rate Mechanism, 1976, when the International Monetary Fund was forced to intervene, and 1949, when a host of countries slumped against the dollar. The devaluation is only matched by the moment in 1931 when, under Ramsay MacDonald, the UK was forced to abandon the gold standard, plunging by more than 24pc against the dollar.

Posted by sovietuk @ 04:59 PM (1092 views)
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6 thoughts on “Thanks Gordon

  • mark wadsworth says:

    Thanks, Gordon! I have a third of my money in FX.

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  • “A weak currency arises from a weak economy which in turn is the result of a weak Government.” – Gordon Brown.

    Love it!

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  • Thanks Gordon. I didn’t.

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  • And as a result of leaving the gold standard, we had a much less severe downturn in the 1930s than a lot of countries.

    Unlike a lot of people, I think this devaluation is a good thing. Things are still going to be bad, but they would be a lot worse if we didn’t devalue.

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  • 3. jonb
    And as a result of leaving the gold standard we have now had a massive boom.

    Think about why the gold standard was left in the 30’s.

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  • I am an importer so the devaluation has screwed me.

    However, I believe a devaluation is better for the country longer term. But there may be a lot of pain to go through in the meanwhile. We may look back in a few years time at this devaluation as a God send.

    It is unnatural to:

    a. Have millionsof foreign workers come to the UK because they can earn more than at home or other major economies in Europe.
    b. For meals abroad, housing, etc, etc to be much cheaper than it is in the UK
    c. For people like me to manufacturer abroad because it is prohibitively expensive to manufacture in the UK, therefore not creating new jobs for the next generation of Brits.

    And for all those winging pensioners in Spain who are complaining about the devaluation effect on their pensions – come home. The pensions provided for by the government were for you to spend in the UK economy – not abroad. And guess what if you sell your overseas property you will get many more pounds and a cheaper property in the UK , so don’t expect to have it both ways.

    The pain of a devaluation is severe. It might mean Blackpool or Brighton for your seaside hols rather than Spain – and money going into the local coffers of UK tourist businesses. It may mean there are less Polish workers here and a few 16-18 year old Brits get a few more jobs. (The pound has dropped from a high of 7.2 to the zloty to 4.5).**** It may mean Europeans doing their Christmas shopping here in the future, rather than Brits going shopping abroad and it could lead to a revival of manufacturing that has been lost to Europe.

    ******By the way in case I am accused of being racist against Poles, my wife and in-laws are Polish. Polish newspapers are prediction that over 500,00 Poles will return from the UK to Poland next year. If they didnt just imagine what the unemployment figures would be in the UK next year.

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