Thursday, February 14, 2013

Are we up the Swanny !

Ditch gilts and get out of sterling: Britain is heading for trouble

In short, our central bank has just told us that inflation is going to be higher than anyone had hoped for a prolonged period of time. And it’s not going to do anything about it.

Posted by happy mondays @ 03:43 PM (2170 views)
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7 thoughts on “Are we up the Swanny !

  • boe will still be there…..

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  • Spot prices across the board have turned down. I’m beginning to wonder if this is more than a sophisticated triumph in devaluation by the clever (unseen and unheard) technocrats in Whitehall/CB. Fact is – investing in Britain is fast looking like a loser on any horizon (other than immediate short term). There’s alot of choice out there – and it’s frankly better than UK.

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  • Mervyn has bee wrong most of his term as governor. at the inflation report he said they did consider that tution fees would push up inflation but had calculated it to be less than it was. Most of the time he just says no-one could have seen the crisis coming and doesn’t know how to end it. Why did we pay him for so long before finding out he didn’t know anything.

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  • 50% off sterling from hear would be fantastic.

    Go Carney Go!

    I would vote for them if I could.

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  • “why would anyone lend money to the UK at current interest rates?”
    – Because British financial institutions are FORCED to invest a percentage of reserves in Gilts.
    – Expect more central planning like this and, capital controls.

    “invest globally, and own some gold as insurance”
    – No kidding. Gold is the most global asset in the world.

    I’m surprised they do not make effort to show that Europe is in far worse a state. It is far less able to resolve imbalances in the economy through lack of political integration, unlike the UK, which has been integrated politically for quite some time now!!

    Remember, that Sterling is still 5% of global currency reserves. We are the third most important currency, after two much larger blocks, i.e. the Euro and Dollar. Even the Yen is below Sterling. Certainly, Britain, Europe and America can come out on top after a currency war. I think that is what they all intend. But we will all suffer inflation.

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  • Last Month Argentina was in trouble with the IMF – basically it’s on the edge of default. Last week Venezuela devalued by 46%. A number of pundits were claiming that S America was the place for our money at the end of last year -> who to believe?

    Alternatives are…the USA with it’s massive deficit problems and the Eurozone with Cyprus, Greece, Spain, etc., etc. Spare a thought for Japan – they are in a race to the bottom, too.

    Inflation will certainly be a problem in the UK. We could always buy a foodstuffs company – that should keep its value and everyone wants food…enter the new buyer for Heinz !

    ……..Why HELLO… Mr Buffett

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  • Alan, this is the benefit of Britain’s world reserve status. Holding 5% of the world’s reserves, we can default on 50% of our debt by devaluing Sterling 10%. Argentina does not have a reserve currency, to default on 50% of their debt they must devalue the currency say, 46%.

    If Argentina worked towards sound money, maybe in 50 or 100 years, if they could avoid Britain and America invading before then, they could have a world reserve status. People do not understand the power this brings.

    But also, people must realize that the public will feel pain in terms of inflation, even here, as they print away the debts. See, if you have world reserve status, if you go get the world in debt, then devalue it, you are the winner of the game. But eventually the public may loose faith in fiat money and move to gold, silver and other commodities instead. They are taking that risk in these currency wars, which tend to end in shooting wars.

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