The Sterling (gbp Thread

[12DrinkMore]

Apologies if I'm going slightly off topic, but some of the products and accounts suggested have a requirement for UK residency I believe.

At present that is not too difficult to achieve through the use of ano's address etc (I know there are lots of folk receiving all manner of benefits and not having their state pension frozen and receiving winter heating allowance hahaha etc etc whilst living here) but isn't the writing on the wall with the new chipped passport?

The RFID chip will store all available info' on us (effectively an ID card plus) including, of course, details of all visas and border crossings. This info' will be available to the IR and benefits agencies and will probably become the obvious way for institutions to ask for proof of residency. All passports are due to be renewed by 2010 so, sadly, my hopes of drawing that winter heating allowance in 2013 seem to be zero.

Big brother really is going to be watching us.

I don't believe that the chip is writable after it is installed in the passport. So any border crossings will not be stored on the chip. But, of course, they can be stored on the Big Bro Computer at the UK borders. So crossings in and out of the UK can be stored, but not where you are going unless all countries agree on the same system and agree to share data. Something I think unlikely in the next few years, but very likely in the next couple of decades.

[Hairy]

No work in the UK, next stop Taiwan.

Taiwan is in trouble too, with a two to three year "negative growth" period projected.

I don't know what you do, but if it's English teaching, I think you'll find a saturated market with stagnant wages. The only reason those wages are as high as they are now is because the Taiwanese government mandates that in order to hire a foreigner, the Taiwanese company must pay a minimum of 150% of the average Taiwanese salary to that foreigner. This is intended to prevent companies from hiring cheap overseas labor, but has the side effect of jacking up wages for the "professional ESL instructor" crowd.

However, with the economic impact of the current mess, I suspect a lot of parents are going to tell their kids to go online and find someone to chat with them over Skype instead of paying a fortune to the mostly useless "language schools".

[chiang mai]

Apologies if I'm going slightly off topic, but some of the products and accounts suggested have a requirement for UK residency I believe.

At present that is not too difficult to achieve through the use of ano's address etc (I know there are lots of folk receiving all manner of benefits and not having their state pension frozen and receiving winter heating allowance hahaha etc etc whilst living here) but isn't the writing on the wall with the new chipped passport?

The RFID chip will store all available info' on us (effectively an ID card plus) including, of course, details of all visas and border crossings. This info' will be available to the IR and benefits agencies and will probably become the obvious way for institutions to ask for proof of residency. All passports are due to be renewed by 2010 so, sadly, my hopes of drawing that winter heating allowance in 2013 seem to be zero.

Big brother really is going to be watching us.

I don't believe that the chip is writable after it is installed in the passport. So any border crossings will not be stored on the chip. But, of course, they can be stored on the Big Bro Computer at the UK borders. So crossings in and out of the UK can be stored, but not where you are going unless all countries agree on the same system and agree to share data. Something I think unlikely in the next few years, but very likely in the next couple of decades.

Not to digress from the topic of the thread for too long but UK Immigration has been recording and storing details of entry and departure for at least five years using bar coding alone. I know this to be fact because I was "tripped up" by the system on re-entering the UK several years ago.

[VegasVic]

€uro = Pound...

'Euro tourists' crossing border

Some shops are offering direct 'pound-for-euro' exchange rates

By Mark Simpson

BBC News Ireland correspondent

While the decline in the value of sterling is posing problems for UK tourists bound for Europe, it is providing an unexpected boon for Northern Ireland's retailers.

As the pound keeps falling, the traffic-jams keep growing with euro-shoppers coming to Northern Ireland for a Christmas bargain.

With some shops offering a straight 'euro-for-pound' exchange rate, the queues are getting longer and longer.

So much so that some local people in border towns like Newry and Enniskillen are annoyed at having to fight their way through the "euro tourists" to get to their nearest shops.

Cross-border shopping trips in Ireland are as old as the border itself but what's happening at the moment is unprecedented. The scale of the influx is staggering.

Take the Asda store in Enniskillen, Co Fermanagh:

* 60% of its customers this month have come from the Irish Republic

* It is the 6th busiest store in the global Wal-Mart chain

Along the border in Strabane, sales were up 54% last week at the local Asda, compared with the same week last year.

Not bad for a store in a town which used to be one of the UK's economic blackspots.

Strabane ASDA manager, Eugene Teague, says: "It's down to the exchange rate and the southern customer just getting in their car and being prepared to drive that bit further."

Last year, a Euro was worth around 70p, now it has soared above 90p. (It's at 94p now, LP)

Most of the cross-border shoppers are making a 30-minute drive from neighbouring towns but there is evidence of some shoppers being prepared to come from more than an hour away, if not further.

They reckon they can save at least 30% on their weekly grocery shop.

At the Supervalu store in Strabane, manager Martin McBrearty not only allows customers to pay in euros but gives them their change in the same currency.

So what are the southern shoppers coming north to buy?

"The big one this year is the alcohol," says Mr McBrearty.

"We're hearing lots of stories about people coming up with trailers, and filling them full of alcohol from the local stores and then scampering across the border again."

The Dublin government is watching the exodus with increasing concern.

Patriotic shopping

Irish Finance Minister Brian Lenihan recently rebuked the cross-border bargain-hunters.

He said: "When you shop in Northern Ireland, you're paying Her Majesty's taxes, you're not paying taxes to the state that you live in."

It was a blunt appeal for patriotic shopping.

However, the large numbers of cars from the Republic parked at northern shopping centres last weekend suggested Irish people are currently more concerned with personal economics than national politics.

One southern shopper in Strabane said: "I would shop in the South if they would bring down their prices and match the prices in the North.

"If they were any way patriotic, they would bring down the prices and not be so greedy. In the South they raised VAT, here they cut it."

The VAT rate in the UK is down to 15%, while it recently went up in the Irish Republic to 21.5%.

It is making life difficult for southern retailers.

Paul Bradley, who runs a Eurospar in Buncrana, Co Donegal, has already had to reduce his workforce.

He said: "There are job losses in this area and there's probably going to be more if this exchange rate continues as it is. It just continues to drop day after day.

"I've been in the retail trade for about 30 years and this is the toughest patch I've ever gone through. I'm normally a good sleeper but I'm sleeping less at night now."

The so-called Celtic Tiger economy in the Republic has limped into recession. The procession of shoppers across the border is making things worse.

There is little sign of any sympathy from their northern neighbours. The South's difficulty is seen as the North's opportunity to cash in.

It's not politics. It's simply business.

-BBC news-uk

LaoPo

We are not very far away from the day that the sign you posted a picture of will be the actual exchange rate Merry Christmass Lao

[chiang mai]

An interesting assessment of major currencies and futures here from Schroders, no big surprises but a useful view.

http://www.telegraph.co.uk/finance/markets...t-sterling.html

[mickba]

...........The RFID chip will store all available info' on us (effectively an ID card plus) including, of course, details of all visas and border crossings. .

I don't believe that the chip is writable after it is installed in the passport. So any border crossings will not be stored on the chip. But, of course, they can be stored on the Big Bro Computer at the UK borders. So crossings in and out of the UK can be stored.................

Apologies - you are right, the chip used is read only I now see, but our qualification as UK residents is easily assessed from the "Big Bro Computer" wherever, so I still doubt I'll see my winter heating allowance.

Sorry, back to topic - I'm not clever enough to work out what to do with (what's left of) my capital, so it's currently stuck in a UK bank (which hopefully won't go broke). My pension is also in GBP so that's all hurting a lot.

The only good (???) thing I can see is that I (stupidly) built the house (30 year lease) at between 71 - 66 TBH/£ so I sort of have a Thai income in the form of pre-paid rent for life. I also (by chance) brought in the cash for a Retirement extension at 66, which I'm using for living. If the exchange rate would go back above 60 in the next 6 months or so I'd be unscathed, but.....

So, meantime, it's serious re-budgeting and cutbacks. All additional plans for work on the house are on hold. A trip back to blighty is postponed. Nights out WILL be reduced in the New Year. The Frontera will probably be parked up in favour of the m/bike and, sadly, some ladies employed in the leisure/pleasure industry will feel the pinch - hard times ahead for Isaan perhaps.

Sorry, no cunning plans here - just holding my breath and hoping.

[pontious]

49.88 for £1 cash today - we are all doomed - Happy Xmas everyone.

[pkrv]

The only good (???) thing I can see is that I (stupidly) built the house (30 year lease) at between 71 - 66 TBH/£ so I sort of have a Thai income in the form of pre-paid rent for life. I also (by chance) brought in the cash for a Retirement extension at 66, which I'm using for living.

IMO this is the trick! You need assets in the country you plan to live in, in my case a Farang quota condominium. You really have to plan well in advance. My own major transfers were between 75 and I think about 69 (it was during the onshore offshore time). I will probably retire in a few years.

But for the moment there is no clever way for getting a better deal for GBP for THB unless you wish to gamble, and you know what most people lose at that game, I would not recommend it.

I have actually put my balls on the line in another thread and I think in 11 months (we are into the prediction already), maybe 1 year 11 months at the most the situation will have changed dramatically for sterling. I suppose in a way my argument is that the money has to go somewhere and USD is not going to be the place to be. Anyway that's what I am waiting for. This is a 'wait and see' game from my perspective, no short term answers sorry.

Edited December 24, 2008 by pkrv

[MJP]

The only good (???) thing I can see is that I (stupidly) built the house (30 year lease) at between 71 - 66 TBH/£ so I sort of have a Thai income in the form of pre-paid rent for life. I also (by chance) brought in the cash for a Retirement extension at 66, which I'm using for living.

IMO this is the trick! You need assets in the country you plan to live in, in my case a Farang quota condominium. You really have to plan well in advance. My own major transfers were between 75 and I think about 69 (it was during the onshore offshore time). I will probably retire in a few years.

But for the moment there is no clever way for getting a better deal for GBP for THB unless you wish to gamble, and you know what most people lose at that game, I would not recommend it.

I have actually put my balls on the line in another thread and I think in 11 months (we are into the prediction already), maybe 1 year 11 months at the most the situation will have changed dramatically for sterling. I suppose in a way my argument is that the money has to go somewhere and USD is not going to be the place to be. Anyway that's what I am waiting for. This is a 'wait and see' game from my perspective, no short term answers sorry.

Same as that.

[chiang mai]

That hits the nail on the head. Someone told me several months ago that the most important thing to do was to decide on which is my home currency and most Brits will probably find that very hard to do. The home currency is the one you spend every day, not the one you invest in or think is stronger or better - I think most British expats have probable devised a strategy for Sterling and not for Baht and that has cost them.

[churchill]

A positive view on Sterling ( fingers crossed ) and Gold , which I agree with - especially Gold mining shares .

Link - http://www.greenenergyinvestors.com/index.php?showtopic=5460

It is tough to buy on the lows.

For example, how many people would buy Sterling now? There's even a thread here on GEI talking about how Sterling "is toast." And I can certainly see hard times ahead for the UK, as it deals with the wreck that is its over-indebted economy, and falling North Sea oil production. But remember how negative things looked for the dollar back in Mid-summer? (which "coincidentally" was when oil was near its high.) Since then, the fall in oil prices, and a reduced appetite for imports of all kinds has helped the dollar. Of course, the financial implosion, which has driven Hedge Funds to sell stocks and repay carry trade debt in yen and dollars has been another thing spurring a big rise in these two currencies.

To me, the negative sentiment on Sterling means that the FXB charts need a special look now.

GBP ) FXB ... update

It looks alot like the chart for A$/FXA before it turned, doesn't it?

Of note are:

+ The low volume, which is coming on this latest selloff, it is as low as a previous turn in XX

+ The triple test of the support level near $1.40 (?), with this latest test on the least volume

+ $1.40 compares with the GBP high at $2.xx, that's xx%, very near the Fibonacci level of 68.2%

Can I bring myself to buy Sterling here?

Probably. I may have a go on some FXB calls when NY trading opens today. My spreadbetting account is not yet funded with the Pds.5,000 trading amount that I spoke about, so I may need to wait a few more days on that.

I want to get ahold of a longer term chart on GBP, and see how compelling that chart looks. I have noticed that the Yen has been strong through the financial crisis which broke out after the summer downturn. Both the dollar and the yen were strong, but the Yen is now the "last man standing", as the dollar has begun to ease back, and its slide is again becoming evident. It is interesting to see the order in which the "fallen men" got up again. First, Gold. Then, the Euro. More recently, the A$ and the C$. Now Sterling too, is starting to look like it wants to regain its feet. Is 2009 going to be another year of dollar weakness? If so, we need to be thinking about precious metals, and also the still bombed-out gold stocks.

Gold - something big about to happen?

"...I am alert to a possible breakout in Gold over $860, an important resistance level.

Gold / GLD ... update

I am a little concerned that the Gold bulls are getting a bit to complacent. But in their defense, I hasten to add that January is normally a good month for Gold and Gold stocks. If Gold does breakout over $860, it could move $100 rather fast. And this time it seems likely to drag CDNX (and the Juniors) up with it. The tax-oriented selling that we see in the 4th quarter must be over by now. So the move in CDNX could be a sharp one."

Edited December 29, 2008 by churchill

[MJP]

A positive view on Sterling ( fingers crossed ) and Gold , which I agree with - especially Gold mining shares .

Link - http://www.greenenergyinvestors.com/index.php?showtopic=5460

It is tough to buy on the lows.

For example, how many people would buy Sterling now? There's even a thread here on GEI talking about how Sterling "is toast." And I can certainly see hard times ahead for the UK, as it deals with the wreck that is its over-indebted economy, and falling North Sea oil production. But remember how negative things looked for the dollar back in Mid-summer? (which "coincidentally" was when oil was near its high.) Since then, the fall in oil prices, and a reduced appetite for imports of all kinds has helped the dollar. Of course, the financial implosion, which has driven Hedge Funds to sell stocks and repay carry trade debt in yen and dollars has been another thing spurring a big rise in these two currencies.

To me, the negative sentiment on Sterling means that the FXB charts need a special look now.

GBP ) FXB ... update

It looks alot like the chart for A$/FXA before it turned, doesn't it?

Of note are:

+ The low volume, which is coming on this latest selloff, it is as low as a previous turn in XX

+ The triple test of the support level near $1.40 (?), with this latest test on the least volume

+ $1.40 compares with the GBP high at $2.xx, that's xx%, very near the Fibonacci level of 68.2%

Can I bring myself to buy Sterling here?

Probably. I may have a go on some FXB calls when NY trading opens today. My spreadbetting account is not yet funded with the Pds.5,000 trading amount that I spoke about, so I may need to wait a few more days on that.

I want to get ahold of a longer term chart on GBP, and see how compelling that chart looks. I have noticed that the Yen has been strong through the financial crisis which broke out after the summer downturn. Both the dollar and the yen were strong, but the Yen is now the "last man standing", as the dollar has begun to ease back, and its slide is again becoming evident. It is interesting to see the order in which the "fallen men" got up again. First, Gold. Then, the Euro. More recently, the A$ and the C$. Now Sterling too, is starting to look like it wants to regain its feet. Is 2009 going to be another year of dollar weakness? If so, we need to be thinking about precious metals, and also the still bombed-out gold stocks.

Gold - something big about to happen?

"...I am alert to a possible breakout in Gold over $860, an important resistance level.

Gold / GLD ... update

I am a little concerned that the Gold bulls are getting a bit to complacent. But in their defense, I hasten to add that January is normally a good month for Gold and Gold stocks. If Gold does breakout over $860, it could move $100 rather fast. And this time it seems likely to drag CDNX (and the Juniors) up with it. The tax-oriented selling that we see in the 4th quarter must be over by now. So the move in CDNX could be a sharp one."

How's Bubb, Goldfinger and CGNAO?

[LaoPo]

€uro = Pound...

'Euro tourists' crossing border

Some shops are offering direct 'pound-for-euro' exchange rates

LaoPo

We are not very far away from the day that the sign you posted a picture of will be the actual exchange rate Merry Christmass Lao

Belated Merry Christmas also Vic; saw this message too late.

Yes, the GBP is almost on par with the Euro 1.024 for 1 GBP

LaoPo

[ArranP]

€uro = Pound...

'Euro tourists' crossing border

Some shops are offering direct 'pound-for-euro' exchange rates

LaoPo

We are not very far away from the day that the sign you posted a picture of will be the actual exchange rate Merry Christmass Lao

Belated Merry Christmas also Vic; saw this message too late.

Yes, the GBP is almost on par with the Euro 1.024 for 1 GBP

LaoPo

EUR is forecast to weaken, ECB are behind the curve on cutting interest rates, bad marco from germany, multi-country agreements make it more difficult on policy to combat recession moving forward.

Edited December 29, 2008 by ArranP

[LaoPo]

EUR is forecast to weaken, ECB are behind the curve on cutting interest rates, bad marco from germany, multi-country agreements make it more difficult on policy to combat recession moving forward.

Nobody's denying the world isn't in a mess...

Every day a new Polaroid is taken from the world (btw: Polaroid has filed for bankruptcy); the next day the Polaroid is old news.

LaoPo

[mommysboy]

EUR is forecast to weaken, ECB are behind the curve on cutting interest rates, bad marco from germany, multi-country agreements make it more difficult on policy to combat recession moving forward.

Nobody's denying the world isn't in a mess...

Every day a new Polaroid is taken from the world (btw: Polaroid has filed for bankruptcy); the next day the Polaroid is old news.

LaoPo

Pound is about as low as it can go, which is a good sign that it will lose another 10% because markets have just gone crazy. Soon I'll buy sterling and ditch my bt. I don't see a major swing for some time, but 55 within 6 months. Significantly more 1 - 2 years.

I've stopped selling in pounds and now deal in dollars. Hit me bad.

[ArranP]

EUR is forecast to weaken, ECB are behind the curve on cutting interest rates, bad marco from germany, multi-country agreements make it more difficult on policy to combat recession moving forward.

Nobody's denying the world isn't in a mess...

Every day a new Polaroid is taken from the world (btw: Polaroid has filed for bankruptcy); the next day the Polaroid is old news.

LaoPo

Pound is about as low as it can go, which is a good sign that it will lose another 10% because markets have just gone crazy. Soon I'll buy sterling and ditch my bt. I don't see a major swing for some time, but 55 within 6 months. Significantly more 1 - 2 years.

I've stopped selling in pounds and now deal in dollars. Hit me bad.

Jim O'Niel of Goldman Sachs is in agreement with you, he mentioned the pound has weakened a long way already and he found it interesting there is alot of bad press on the pound in the UK papers, which he thinks is indicative of a an end to its current trend.

Whilst many stratigists believe the pound may weaken further in the near term, they tend to believe the pound will strengthen against the dollar through 2009, they attribute most of the current dollar strength to mass de-leveraging.

This is why I am moving my capital from USD into GBP. I entered into the dollar @ 1.97 to the £ in june 2007, I am moving from the dollar to the £ january 2009 at 1.4# to the pound. It £ may weaken a little further in the short term, but I'm locking in those profits.

As for investment, I am invested in the Tulip Trend fund, www.trend.ky and the Brandeaux fund, although the brandeaux fund has suspended trading for now due to a single broker issuing an extraordinay amount of redemptions, Brandeaux do not want a fire-sale of its assets so they suspended trading for now. I'm not sure how this will play out in 2009, they say they want to resume subscriptions in january 09 but so far make not mention to resuming redemptions ?? They continue to publish consistent positive returns to the funds of approx .8% per month.

Edited December 30, 2008 by ArranP

[Bizz]

The rate for tourists buying their currency before they travel has almost reached parity, where one pound buys one euro

Actual liquidity levels are painfully thin.

The euro has soared more than 32 percent against sterling this year, jumping a record 18 percent so far this month alone.

Rates in the UK still have to fall much more, and underlying fears of a very deep recession in the UK.

it is just a matter of time before the euro reaches parity with sterling.

The path to parity is self-fulfilling

[12DrinkMore]

I just don't geddit, or rather where on earth should a recovery in the GBP come from?

I keep seeing the "optimists" saying it will rebound to 60 or hang around in the 50-54 baht range.

Why? I get the feeling that these forecasts are based more on wishful thinking about where they would like the GBP to be, so that they can continue to fund a nice existence in Thailand. Hey, back to the good old days or, er, six months ago, where 65 Baht/Quid and 6% were very very nice, thank you and please can we live them again?

IMO, probably very simplistic, in order for the GBP to go UP against the THB two major events have to take place

1. The return on GBP's has to go UP by increasing the interest rates

2. Confidence in the ability of Brown to solve the problems has to go UP

Neither of which seem likely in the next year or two, and Labour has already said that they are not interested in supporting the GBP.

Or for the THB to go DOWN

1. Speculators have to think that the mess in the UK will hit Thailand worse than the UK.

This IMO is also unlikely, there are forecasts that both countries will loose 1,000,000 jobs or so and see a reduction in GDP BUT

1. Any infrastructure stimulus package in Thailand will employ many willing Thais in manual labour, who otherwise would not get a job. The money ends up quickly and DIRECTLY in the pockets of the Thais.

2. The Thais are much much more resilient to loss of employment, they can go home to the family house and live on next to nothing with their parents, whilst looking to set up a small business to rake in a couple of thousand/month, or looking for a job generated by the stimulus packages.

3. The UK funding is just disappearing into the banks, which generates no extra jobs. I have not seen any concrete plans to develop any big project in the UK, except the next Olympic Shames.

4. UK jobless just remain jobless and gormless, claiming and claiming and claiming.

The more I think about it, the more the god-awful vision of a socialist UK, with all large industry, banking and housing being state owned, and instead of standing in the dole queue people are forced to take on menial labour at menial rates, because THAT IS ALL THEY ARE NOW QUALIFIED TO DO! Seriously, why should some bank clerk or shop assistant in the UK earn more than a smiling Thai, do they have any major skillset advantage other than they were born in the great UK?

So, to all you fellow Brits, come on, give me an argument that can paint a different picture. And the observation that "the news is so bad it can't possibly get worse", coupled with a vague feeling that the nine month horizon is long enough for "something" to happen, just won't wash.

Think about when it all started with Northern Rock, now 15 months on and STILL the bad news is coming out and STILL the forecasts are getting worse, in fact, in respect of house prices in the UK, some organisations are now REFUSING to make forecasts because either they have NO IDEA or, quite possibly, they have a VERY GOOD IDEA.....

[jesimps]

I just don't geddit, or rather where on earth should a recovery in the GBP come from?

I keep seeing the "optimists" saying it will rebound to 60 or hang around in the 50-54 baht range.

Why? I get the feeling that these forecasts are based more on wishful thinking about where they would like the GBP to be, so that they can continue to fund a nice existence in Thailand. Hey, back to the good old days or, er, six months ago, where 65 Baht/Quid and 6% were very very nice, thank you and please can we live them again?

IMO, probably very simplistic, in order for the GBP to go UP against the THB two major events have to take place

1. The return on GBP's has to go UP by increasing the interest rates

2. Confidence in the ability of Brown to solve the problems has to go UP

Neither of which seem likely in the next year or two, and Labour has already said that they are not interested in supporting the GBP.

Or for the THB to go DOWN

1. Speculators have to think that the mess in the UK will hit Thailand worse than the UK.

This IMO is also unlikely, there are forecasts that both countries will loose 1,000,000 jobs or so and see a reduction in GDP BUT

1. Any infrastructure stimulus package in Thailand will employ many willing Thais in manual labour, who otherwise would not get a job. The money ends up quickly and DIRECTLY in the pockets of the Thais.

2. The Thais are much much more resilient to loss of employment, they can go home to the family house and live on next to nothing with their parents, whilst looking to set up a small business to rake in a couple of thousand/month, or looking for a job generated by the stimulus packages.

3. The UK funding is just disappearing into the banks, which generates no extra jobs. I have not seen any concrete plans to develop any big project in the UK, except the next Olympic Shames.

4. UK jobless just remain jobless and gormless, claiming and claiming and claiming.

The more I think about it, the more the god-awful vision of a socialist UK, with all large industry, banking and housing being state owned, and instead of standing in the dole queue people are forced to take on menial labour at menial rates, because THAT IS ALL THEY ARE NOW QUALIFIED TO DO! Seriously, why should some bank clerk or shop assistant in the UK earn more than a smiling Thai, do they have any major skillset advantage other than they were born in the great UK?

So, to all you fellow Brits, come on, give me an argument that can paint a different picture. And the observation that "the news is so bad it can't possibly get worse", coupled with a vague feeling that the nine month horizon is long enough for "something" to happen, just won't wash.

Think about when it all started with Northern Rock, now 15 months on and STILL the bad news is coming out and STILL the forecasts are getting worse, in fact, in respect of house prices in the UK, some organisations are now REFUSING to make forecasts because either they have NO IDEA or, quite possibly, they have a VERY GOOD IDEA.....

Most countries in the world have a head start on us because a large part of their national cake is not taken up with social security handouts. NHS etc is by far the largest part of our budget. The Thais, for instance, don't have such a problem. Any handouts go to Thais, not incomers, which is not the case in the UK. I don't wish to get into an argument on immigration, or the advantages and disadvantages of the NHS, but it is a heavy drain on the nation's economy.

[pkrv]

I just don't geddit, or rather where on earth should a recovery in the GBP come from?

I keep seeing the "optimists" saying it will rebound to 60 or hang around in the 50-54 baht range.

Why? I get the feeling that these forecasts are based more on wishful thinking about where they would like the GBP to be, so that they can continue to fund a nice existence in Thailand. Hey, back to the good old days or, er, six months ago, where 65 Baht/Quid and 6% were very very nice, thank you and please can we live them again?

IMO, probably very simplistic, in order for the GBP to go UP against the THB two major events have to take place

1. The return on GBP's has to go UP by increasing the interest rates

2. Confidence in the ability of Brown to solve the problems has to go UP

Neither of which seem likely in the next year or two, and Labour has already said that they are not interested in supporting the GBP.

Or for the THB to go DOWN

1. Speculators have to think that the mess in the UK will hit Thailand worse than the UK.

This IMO is also unlikely, there are forecasts that both countries will loose 1,000,000 jobs or so and see a reduction in GDP BUT

1. Any infrastructure stimulus package in Thailand will employ many willing Thais in manual labour, who otherwise would not get a job. The money ends up quickly and DIRECTLY in the pockets of the Thais.

2. The Thais are much much more resilient to loss of employment, they can go home to the family house and live on next to nothing with their parents, whilst looking to set up a small business to rake in a couple of thousand/month, or looking for a job generated by the stimulus packages.

3. The UK funding is just disappearing into the banks, which generates no extra jobs. I have not seen any concrete plans to develop any big project in the UK, except the next Olympic Shames.

4. UK jobless just remain jobless and gormless, claiming and claiming and claiming.

The more I think about it, the more the god-awful vision of a socialist UK, with all large industry, banking and housing being state owned, and instead of standing in the dole queue people are forced to take on menial labour at menial rates, because THAT IS ALL THEY ARE NOW QUALIFIED TO DO! Seriously, why should some bank clerk or shop assistant in the UK earn more than a smiling Thai, do they have any major skillset advantage other than they were born in the great UK?

So, to all you fellow Brits, come on, give me an argument that can paint a different picture. And the observation that "the news is so bad it can't possibly get worse", coupled with a vague feeling that the nine month horizon is long enough for "something" to happen, just won't wash.

Think about when it all started with Northern Rock, now 15 months on and STILL the bad news is coming out and STILL the forecasts are getting worse, in fact, in respect of house prices in the UK, some organisations are now REFUSING to make forecasts because either they have NO IDEA or, quite possibly, they have a VERY GOOD IDEA.....

Hmm… tricky to answer. You are assuming that logic applies - it does not. I am not like naam or sonicdragon in fact in a way I am their opposite. I was globally responsible for some of the systems that conducted 50% of FX world trade and god was I naïve! I did not even understand about the fractional reserve system of finance. During my time at Reuters I was asked if the amount of movement in FX was justified by the amount of trade that was taking place. I said no. Warburg at the time were the worst offender. Effectively countries reserves were looted. You are not talking about trade you are discussing 'a form of war/looting of assets' (sorry to be so controversial). Up until recently trades in 1 yrd (1 yard 1 billion) did not even cause a blip, but from what I hear trading volumes are WAY down. USD is at an artificial high and the world is spending in this currency while the good times roll (NO I AM NOT US BASHING!). If you are US based and retiring in Thailand are you not looking at the situation with a critical eye? Are you too not thinking about moving money now? From a UK position I certainly would not transfer to Thailand except in an emergency!

Oddly you cannot destroy money it simply moves. With the advent of the Euro, DEM= has long gone along with loads of other currencies, there is not much to move into. GBP is one currency that 'should' IMO benefit - though I know this sounds like a strange argument.

[Marvo]

Isn't the GBP Vs THB lead in principle by the GBP Vs USD rates (and any games the BoT are playing at the moment re THB Vs USD with their $100 billion reserves)?

BTW, can anyone tell me what event occurred at 15:45 GMT on New Years eve? It wasn't our beloved Gordon opening his mouth again was it ?

Edited January 2, 2009 by Marvo

[pkrv]

Isn't the GBP Vs THB lead in principle by the GBP Vs USD rates (and any games the BoT are playing at the moment re THB Vs USD with their $100 billion reservrs)?

BTW, can anyone tell me what event occurred at 15:45 GMT on New Years eve? It wasn't our beloved Gordon opening his mouth again was it ?

GBPTHB= exists as an instrument. Oddly the Indian Rupee does not. You have to go via USD.

[cocopops]

Oddly you cannot destroy money it simply moves. With the advent of the Euro, DEM= has long gone along with loads of other currencies, there is not much to move into. GBP is one currency that 'should' IMO benefit - though I know this sounds like a strange argument.

Maybe you should read about that fractional reserve thingy you just mentioned again. Of course it is possible to destroy money in such a system. It might even moderate your view of the 'artificial' USD high.

[ArranP]

I just don't geddit, or rather where on earth should a recovery in the GBP come from?

Rather than ask where GBP strength will come from, I think it better to look at where the USD strength has come from?

The answer, according to most of what I've heard on Bloomberg, is because of the forced selling (ie the credit crunch) and re-patriation of this money to the USD and JPY.

What do you think will happen when this rush of money flowing back to the USD calms down ?

Edited January 2, 2009 by ArranP

[pkrv]

Oddly you cannot destroy money it simply moves. With the advent of the Euro, DEM= has long gone along with loads of other currencies, there is not much to move into. GBP is one currency that 'should' IMO benefit - though I know this sounds like a strange argument.

Maybe you should read about that fractional reserve thingy you just mentioned again. Of course it is possible to destroy money in such a system. It might even moderate your view of the 'artificial' USD high.

cocopops - I am exploring too BTW . I think the answer to your question is you cannot destroy something that does not exist. That money never existed except as debt. i.e. it never actually existed. though the interest did. The money that does exist will (as it always does) simply moves.

Edited January 2, 2009 by pkrv

[mommysboy]

I just don't geddit, or rather where on earth should a recovery in the GBP come from?

I keep seeing the "optimists" saying it will rebound to 60 or hang around in the 50-54 baht range.

Why? I get the feeling that these forecasts are based more on wishful thinking about where they would like the GBP to be, so that they can continue to fund a nice existence in Thailand. Hey, back to the good old days or, er, six months ago, where 65 Baht/Quid and 6% were very very nice, thank you and please can we live them again?

IMO, probably very simplistic, in order for the GBP to go UP against the THB two major events have to take place

1. The return on GBP's has to go UP by increasing the interest rates

2. Confidence in the ability of Brown to solve the problems has to go UP

Neither of which seem likely in the next year or two, and Labour has already said that they are not interested in supporting the GBP.

Or for the THB to go DOWN

1. Speculators have to think that the mess in the UK will hit Thailand worse than the UK.

This IMO is also unlikely, there are forecasts that both countries will loose 1,000,000 jobs or so and see a reduction in GDP BUT

1. Any infrastructure stimulus package in Thailand will employ many willing Thais in manual labour, who otherwise would not get a job. The money ends up quickly and DIRECTLY in the pockets of the Thais.

2. The Thais are much much more resilient to loss of employment, they can go home to the family house and live on next to nothing with their parents, whilst looking to set up a small business to rake in a couple of thousand/month, or looking for a job generated by the stimulus packages.

3. The UK funding is just disappearing into the banks, which generates no extra jobs. I have not seen any concrete plans to develop any big project in the UK, except the next Olympic Shames.

4. UK jobless just remain jobless and gormless, claiming and claiming and claiming.

The more I think about it, the more the god-awful vision of a socialist UK, with all large industry, banking and housing being state owned, and instead of standing in the dole queue people are forced to take on menial labour at menial rates, because THAT IS ALL THEY ARE NOW QUALIFIED TO DO! Seriously, why should some bank clerk or shop assistant in the UK earn more than a smiling Thai, do they have any major skillset advantage other than they were born in the great UK?

So, to all you fellow Brits, come on, give me an argument that can paint a different picture. And the observation that "the news is so bad it can't possibly get worse", coupled with a vague feeling that the nine month horizon is long enough for "something" to happen, just won't wash.

Think about when it all started with Northern Rock, now 15 months on and STILL the bad news is coming out and STILL the forecasts are getting worse, in fact, in respect of house prices in the UK, some organisations are now REFUSING to make forecasts because either they have NO IDEA or, quite possibly, they have a VERY GOOD IDEA.....

1. I'd say that you (and the markets for that matter) are looking at the UK's problems in isolation. It's true UK is forecast to have the most severe recession in Eurozone. But see 2.

2. The very low pound is likely to stimulate exports and reduce imports, thus bringing the deficit back in to line. It may well mitigate the recession. Remember Euro land rivals can't do this.

3. The pound has already dropped to jaw droppingly low levels. Markets often over react and in fact this whole terrible year has been characterised by terrible volatility.

4. Speculators have driven the price down but that is now nearing an end. Soon attention could be focused on another currency, eg, Thai bt.

5. Interest rates must fall lower. Why? they are already at historic lows, below inflation, and in any case are only 2%. Unlikely to fall to zero, and action on interest rates has largely been co-ordinated with other world banks.

6. Looking at the Thai bt: the consensus is that it is already overvalued and that it is being propped up by the BOT for some inexplicable reason. Moreover, Thailand is predicted to have a truly awful 2009. It's domestic consumption will be boosted by govt expenditure which will lead to a budget deficit and this will put further pressure on the bt.

7. Just where both countries are on the wheel: UK is now embroiled in a recession, Thailand is very much at the edge, as time progresses one would expect the stories from Uk to become more positive, but quite the opposite for Thailand.

I think it's largely a myth that UK has no industry. As I recall it's also a very competitive country.

[12DrinkMore]

UK position I certainly would not transfer to Thailand except in an emergency!

Well, I regard this as an emergency, and I have transferred enough to keep me happy for the next six years at least. I like it here and the only thing that could kill me financially if rampant inflation takes off in Thailand. And I can't see any reason to expect that.

Oddly you cannot destroy money it simply moves.

This is an interesting topic which I have being trying to get my mind around. But I don't believe it is true, as otherwise we could all be immensely wealthy and afford everything we want or desire, with an infinite amount of money running around that could never be destroyed. Certainly destroying a physical Pound note transfers the value of the IOU to the bank of England. This is one reason why the US is so happy to have its currency circulating abroad, as it costs nothing to produce and, if the notes never come back to the US, provides a massive profit.

However, take the case where a bank must hold 10% in physical cash (or deposits at the Bank of England). It is then allowed to "create" ten times this in "money". If the newly created money is lent to Joe Lucky, there is suddenly a massive increase in the money in circulation, although it could never be withdrawn in cash and realistically cannot ever physically exist. Now Joe comes back to the bank next day and pays off the entire debt. Suddenly the amount of money is back to where we started, effectively being "destroyed". So I believe that money can be created and destroyed.

Now add in the asset bubble factor. So Joe Lucky has his money and calls it a "Smiggoo" and inflates the price by 20% even though he has done nothing. Well, now we have even more "money" in circulation. And now all these "Smiggoos", or SIVs, CDS, Houses etc are collapsing and in the process, you would have a hard time arguing against this one, destroying "money".

Or maybe you will argue that it never really existed? Which is also an argument I can logically accept, but for a hel_l of a lot of people it was a real tangible figure in the bank or on the asset sheet. Certainly the remaining debt is...

Fascinating how money first of all developed as an easier way of bartering pigs and cows, so much easier than cutting off the odd shank to give change, into a end of its own, resulting in humans loosing shirts, arms and legs in a headlong race to own more without actually having to do much except say its worth more.

With the advent of the Euro, DEM= has long gone along with loads of other currencies, there is not much to move into. GBP is one currency that 'should' IMO benefit - though I know this sounds like a strange argument.

What argument? That there is not much else to move into? I heard that argument about stocks, "oh, there is so much new money to invest that the stock market must ALWAYS go up!". Seems I also heard it about land and house prices too. Ponzi comes to mind.

[mommysboy]

I'm moving my capital from USD to GBP, on the presumption the USD/GBP will be at approx 1.90 end of 2009, which means if the USD/THB remains at 35, then GBP/THB will be 66.5

I'll probably delay buying any substantial assets until the GBP/THB improves towards the end of 2009, and just withdraw month on month living expenses.

Keep an option open on working maybe 6 months UK/Europe each year, then 6 months back in Thailand.

I'm invested in Tulip Trend fund, its a Managed Futures fund, historically its done well in down-turns, its performance can be seen at www.trend.ky

Also, I'm invested in Brandeaux Dollar Fund, but want to switch to their Student Accomodation Fund Sterling, these funds return approx 7 to 10% per anum, you can pull up the performance of these funds on www.bloomberg.com

After the dollar weakens, and you get more baht for your pound, then I may consider large asset purchases.

I've changed 80% of my USD back to GBP.In the long run I feel its the best option.1 year ago everyone was screaming abt 2 USD to the pound now its the other way people are still screaming.

Long term I thing Sterling USD will settle abt 1.70.Thai Baht to USD abt 40,Thai Baht to sterling 66.

Thats my take anyway.

EPG.

This is a refreshing change, People talking positive for once, It may happen it may not but one thing for sure it makes you feel better.

I just finished reading currency forecasts from two different banks and guess what, they forecast GBP/USD to be 1.35 by the end of 1Q09 and by the end 4Q10 it is forecast to be 1.17. As a guide it currently sits at 1.4950 - this seems to support the longer term strategy of some others on this forum and annoyingly means that Britmaveric may yet be right after all.

That's an insane set of predictions. What's the reference?

[12DrinkMore]

1. I'd say that you (and the markets for that matter) are looking at the UK's problems in isolation. It's true UK is forecast to have the most severe recession in Eurozone. But see 2.

2. The very low pound is likely to stimulate exports and reduce imports, thus bringing the deficit back in to line. It may well mitigate the recession. Remember Euro land rivals can't do this.

The GBP will cause imports to rise by 50%. If you look over the list of UK manufacturing exports you will find that they pretty much all rely on imported raw materials. So basically it is only the "made in Britain" fraction which will evident as a lower price. And then on the other end of the stick, all the imported goods and foods which are being imported from abroad will shortly filter through to the the shops resulting in a jump in inflation. Which Brown will, on past performance, ignore, as he will not raise interest rates but will continue on towards the New Brown's Socialist UK.

3. The pound has already dropped to jaw droppingly low levels. Markets often over react and in fact this whole terrible year has been characterised by terrible volatility.

The financial markets now always overreact, they are in uncharted territory. Quite a few jaws have dropped over the GBP, but quite a few were open mouthed about the massive surge in the Quid. We are now totally in the hands of the speculators moving from currency to currency.

4. Speculators have driven the price down but that is now nearing an end. Soon attention could be focused on another currency, eg, Thai bt.

The Euro followed by the USD seem to be next on the hit list, although for me there are convincing arguments against the USD weakening immensely, mainly because until there is an alternative (the Yuan???), it seems that the USD is still the currency that people flee to.

5. Interest rates must fall lower. Why? they are already at historic lows, below inflation, and in any case are only 2%. Unlikely to fall to zero, and action on interest rates has largely been co-ordinated with other world banks.

Absolute no brainer. Wait for Brown to take them down to 1.25% next week. The markets have already priced this one in.

6. Looking at the Thai bt: the consensus is that it is already overvalued and that it is being propped up by the BOT for some inexplicable reason. Moreover, Thailand is predicted to have a truly awful 2009. It's domestic consumption will be boosted by govt expenditure which will lead to a budget deficit and this will put further pressure on the bt.

The consensus of who? All the Farang who are suffering?

Where will the recession be worse, Thailand or the UK? And Thailand will not try and directly boost domestic consumption like Brown, who wants people to BORROW and SPEND, but will invest in infrastructure projects which will be an investment for the future, put real added value into the economy and provide real jobs, reaping the benefit way into the future. Brown just wants to continue the housing bubble economy, for god's sake.

And please don't talk about budget deficits when we are talking about the UK's unprecedented and unrepayable deficit. At least Thailand has been running a surplus over the good years. Look what Brown has been doing, he can't even run his own party on a break even basis, they are also in debt....

7. Just where both countries are on the wheel: UK is now embroiled in a recession, Thailand is very much at the edge, as time progresses one would expect the stories from Uk to become more positive, but quite the opposite for Thailand.

It hasn't even started in the UK.

I think it's largely a myth that UK has no industry. As I recall it's also a very competitive country.

living in the past, words just fail, just fail...