Gbp Sterling

[chiang mai]

"I'm going for a range of 48bt - 56bt to the pound in the short term".

You're a laugh a minute MB but know that you are loved regardless.

Well I suppose it is rather stating the obvious.

But what is not obvious, and has not been discussed is your bullishness regarding Thailand's future. Given the present economic factors, not least the strength of the bt, why do you feel Thailand is in such a promising position CM?

My take is that Thailand has been underperforming for a few years now and was losing it's competitiveness before the slump. It has a severe problem regarding exports which is the key driver of the economy, and is highly dependent on the US which like most other economies is unlikely to show much of a recovery in demand. Growth is forecast to be 2-3% for several years which is not enough to pay debt and support public spending and so the already growing public debt is likely to grow larger still. Please if you do answer it must be a a little bit more than stating Thailand is part of Asia and demand shortfall will be made up elsewhere.

And again without queering the pitch like Drinkmore (who seems to be suffering the hangover for doing just that) why so dismissive of UK's position ?. If nothing else a 25% sale does give Blighty a tad of an edge in the Euro market wouldn't you say? And the historic precedent is the 90's recovery. This is nothing new for UK.

It's not so much that I'm bullish on Thailand, it's more that I'm looking at all the horses in the race trying to see who's going to come out ahead and it seems to me that Thailand is in much better shape in relative terms than many of the larger Western economies. Goodness knows, like most other readers, I would dearly love to see GBP/THB fall to 70 or even 60 once again because that's the currency that I spend on a daily basis. But I'm sufficient of a realist to understand that's not going to happen so now it's all down to trying to figure out where the bottom might be so that I can look at my financial models and see what impact that is going to have on my plans for my future. So when I take that look I see all the same old factors - mainly these comprise excessive UK debt and quantitative easing versus reduced exports except that the latter is starting to improve. And yes, Thailand and Malaysia are the worst performers in SE Asia because they are open markets but they are still forecast to produce an increase in GDP of circa 3% - UK GDP remains negative although the weaker Pound will help.

I don't know what part of Thailand you live in but here in Phuket I still see new building going up and businesses expanding so people have confidence - I also see some prices starting to come down which is also a very positive thing - and all of this without the safety net of a national social security system that employs ten per cent of the population! As a counter to that I accept that the UK has great resilience and has the capability to weather the current storm but that will not happen quickly and not without much change which will be very painful. If it doesn't happen before the next election then certainly after it, UK taxes are going to rocket whilst services will fall dramatically - Thailand doesn't face that same set of the problems, in fact, I see the Thai business environment as much more easily adapted than the very traditional UK - in the meantime, I see Thailand being able to return to near full productivity and storm ahead, the impact of which will result in an even stronger Baht. Six months ago I was using 50 Baht per Pound in my models, today I'm using 40 Baht per Pound - just in the same way that you have reduced your range from 55 to 48! And finally, let us not forget the level of foreign reserves which continue to grow on a monthly basis, quite extraordinary really.

Edited September 26, 2009 by chiang mai

[mommysboy]

"I'm going for a range of 48bt - 56bt to the pound in the short term".

You're a laugh a minute MB but know that you are loved regardless.

Well I suppose it is rather stating the obvious.

But what is not obvious, and has not been discussed is your bullishness regarding Thailand's future. Given the present economic factors, not least the strength of the bt, why do you feel Thailand is in such a promising position CM?

My take is that Thailand has been underperforming for a few years now and was losing it's competitiveness before the slump. It has a severe problem regarding exports which is the key driver of the economy, and is highly dependent on the US which like most other economies is unlikely to show much of a recovery in demand. Growth is forecast to be 2-3% for several years which is not enough to pay debt and support public spending and so the already growing public debt is likely to grow larger still. Please if you do answer it must be a a little bit more than stating Thailand is part of Asia and demand shortfall will be made up elsewhere.

And again without queering the pitch like Drinkmore (who seems to be suffering the hangover for doing just that) why so dismissive of UK's position ?. If nothing else a 25% sale does give Blighty a tad of an edge in the Euro market wouldn't you say? And the historic precedent is the 90's recovery. This is nothing new for UK.

It's not so much that I'm bullish on Thailand, it's more that I'm looking at all the horses in the race trying to see who's going to come out ahead and it seems to me that Thailand is in much better shape in relative terms than many of the larger Western economies. Goodness knows, like most other readers, I would dearly love to see GBP/THB fall to 70 or even 60 once again because that's the currency that I spend on a daily basis. But I'm sufficient of a realist to understand that's not going to happen so now it's all down to trying to figure out where the bottom might be so that I can look at my financial models and see what impact that is going to have on my plans for my future. So when I take that look I see all the same old factors - mainly these comprise excessive UK debt and quantitative easing versus reduced exports except that the latter is starting to improve. And yes, Thailand and Malaysia are the worst performers in SE Asia because they are open markets but they are still forecast to produce an increase in GDP of circa 3% - UK GDP remains negative although the weaker Pound will help.

I don't know what part of Thailand you live in but here in Phuket I still see new building going up and businesses expanding so people have confidence - I also see some prices starting to come down which is also a very positive thing - and all of this without the safety net of a national social security system that employs ten per cent of the population! As a counter to that I accept that the UK has great resilience and has the capability to weather the current storm but that will not happen quickly and not without much change which will be very painful. If it doesn't happen before the next election then certainly after it, UK taxes are going to rocket whilst services will fall dramatically - Thailand doesn't face that same set of the problems, in fact, I see the Thai business environment as much more easily adapted than the very traditional UK - in the meantime, I see Thailand being able to return to near full productivity and storm ahead, the impact of which will result in an even stronger Baht. Six months ago I was using 50 Baht per Pound in my models, today I'm using 40 Baht per Pound - just in the same way that you have reduced your range from 55 to 48! And finally, let us not forget the level of foreign reserves which continue to grow on a monthly basis, quite extraordinary really.

Hang on I thought Thai GDP is set to contract this year CM,ie, GDP -3.2% not by 3.2%, my misunderstanding or yours?

And, surely Thailand was worst, not Thailand and Malaysia.

As an emerging economy growth of 2-3% is not enough and the major challenge to Thailand is to rid itself of inefficiency and corruption. It's public spending will increase too, that's what happens in maturing economies. Already we see people demanding more and more by way of education and health care, you wouldn't get a go ahead economy without it, they go hand in hand.

I have a feeling both Thailand and UK will bumble along somehow. Thailand's ace in the pack is it's 'balance sheet' which should see it through it's sharp downturn, but it's not a foregone conclusion, and it's public finances are deteriorating fast. I think one has to ask, is Thailand mature enough to go ahead under it's own steam. Indeed as far as I can see, in order for the global economy to recover it may need an Asian sending boom.

40! that's appx 20% drop from where it is now. Is this a fate that only the pound will suffer or are we looking at 27bt or so to the dollar. If so how wouldn't this dampen exports a tad! It sounds a ludicrous proposition. My worst case scenario was 48, and I don't think that will happen.

[churchill]

I am afraid that Sterling seems to be on a path lower for sure - At least for the next few months

Alistair Darling admits sterling is in freefall

Earlier this week we had the Bank of England suggesting that the UK economy was sluggish at best and still in a consolidation period at worst. Then we saw Alistair Darling commenting upon the UK budget deficit and national debt, a subject which has for some time been one that was ignored by the Labour Party. However, today Alistair Darling has readily admitted that the UK government does not have a plan of support for the UK currency in place.

This is an astounding statement when you bear in mind that sterling is currently at a six-month low against the likes of the dollar and the euro. Not only does this reduced confidence in the money markets but it also gives "shorters" every opportunity to attack sterling, knowing that there is no support system in place at this moment in time. Of course, if the UK currency continues to fall we will almost certainly see the Bank of England step into the currency market but this could actually be some way off with sterling having further to fall in the short term.

Will Alistair Darling live to regret his comments regarding a lack of support for the UK currency?

http://financialadvice.co.uk/news/12/ukeco...n-freefall.html

[churchill]

Talking down the pound

http://www.independent.co.uk/news/business...nd-1793565.html

[chiang mai]

"I'm going for a range of 48bt - 56bt to the pound in the short term".

You're a laugh a minute MB but know that you are loved regardless.

Well I suppose it is rather stating the obvious.

But what is not obvious, and has not been discussed is your bullishness regarding Thailand's future. Given the present economic factors, not least the strength of the bt, why do you feel Thailand is in such a promising position CM?

My take is that Thailand has been underperforming for a few years now and was losing it's competitiveness before the slump. It has a severe problem regarding exports which is the key driver of the economy, and is highly dependent on the US which like most other economies is unlikely to show much of a recovery in demand. Growth is forecast to be 2-3% for several years which is not enough to pay debt and support public spending and so the already growing public debt is likely to grow larger still. Please if you do answer it must be a a little bit more than stating Thailand is part of Asia and demand shortfall will be made up elsewhere.

And again without queering the pitch like Drinkmore (who seems to be suffering the hangover for doing just that) why so dismissive of UK's position ?. If nothing else a 25% sale does give Blighty a tad of an edge in the Euro market wouldn't you say? And the historic precedent is the 90's recovery. This is nothing new for UK.

It's not so much that I'm bullish on Thailand, it's more that I'm looking at all the horses in the race trying to see who's going to come out ahead and it seems to me that Thailand is in much better shape in relative terms than many of the larger Western economies. Goodness knows, like most other readers, I would dearly love to see GBP/THB fall to 70 or even 60 once again because that's the currency that I spend on a daily basis. But I'm sufficient of a realist to understand that's not going to happen so now it's all down to trying to figure out where the bottom might be so that I can look at my financial models and see what impact that is going to have on my plans for my future. So when I take that look I see all the same old factors - mainly these comprise excessive UK debt and quantitative easing versus reduced exports except that the latter is starting to improve. And yes, Thailand and Malaysia are the worst performers in SE Asia because they are open markets but they are still forecast to produce an increase in GDP of circa 3% - UK GDP remains negative although the weaker Pound will help.

I don't know what part of Thailand you live in but here in Phuket I still see new building going up and businesses expanding so people have confidence - I also see some prices starting to come down which is also a very positive thing - and all of this without the safety net of a national social security system that employs ten per cent of the population! As a counter to that I accept that the UK has great resilience and has the capability to weather the current storm but that will not happen quickly and not without much change which will be very painful. If it doesn't happen before the next election then certainly after it, UK taxes are going to rocket whilst services will fall dramatically - Thailand doesn't face that same set of the problems, in fact, I see the Thai business environment as much more easily adapted than the very traditional UK - in the meantime, I see Thailand being able to return to near full productivity and storm ahead, the impact of which will result in an even stronger Baht. Six months ago I was using 50 Baht per Pound in my models, today I'm using 40 Baht per Pound - just in the same way that you have reduced your range from 55 to 48! And finally, let us not forget the level of foreign reserves which continue to grow on a monthly basis, quite extraordinary really.

Hang on I thought Thai GDP is set to contract this year CM,ie, GDP -3.2% not by 3.2%, my misunderstanding or yours?

And, surely Thailand was worst, not Thailand and Malaysia.

As an emerging economy growth of 2-3% is not enough and the major challenge to Thailand is to rid itself of inefficiency and corruption. It's public spending will increase too, that's what happens in maturing economies. Already we see people demanding more and more by way of education and health care, you wouldn't get a go ahead economy without it, they go hand in hand.

I have a feeling both Thailand and UK will bumble along somehow. Thailand's ace in the pack is it's 'balance sheet' which should see it through it's sharp downturn, but it's not a foregone conclusion, and it's public finances are deteriorating fast. I think one has to ask, is Thailand mature enough to go ahead under it's own steam. Indeed as far as I can see, in order for the global economy to recover it may need an Asian sending boom.

40! that's appx 20% drop from where it is now. Is this a fate that only the pound will suffer or are we looking at 27bt or so to the dollar. If so how wouldn't this dampen exports a tad! It sounds a ludicrous proposition. My worst case scenario was 48, and I don't think that will happen.

Yours, Thai economy is predicted to grow between 2.5 & 3% next year.

Also, the ADP report YOU pointed me at discusses the ranking of GDP in SE Asia hence the reference to Malaysia - go back and read the report again!

"Is this a fate that only the pound will suffer or are we looking at 27bt or so to the dollar" - I presume you are just being silly with this one, but yes indeed, USD will suffer also and the idea of 27/30 baht per USD is really not that far fetched, as already stated by another poster in this thread.

But talking of other posters and other threads: I see in a parallel thread on the same subject that others have provided you with not dissimilar views to me and also a long term trend picture of THB exchange rates, yet still you continue to push that what everyone says is happening is not going to really happen at all! And all you seem to be able to offer up by way of an argument that it wont happen is that UK is resilient - I must confess I don't quite understand your position any longer and whether it's just patriotism that has run amok, a total unwillingness to accept events or an ingrained desire to see 70 Baht per Pound again. Regardless of which, it's probably not worth discussing any of this much more.

[12DrinkMore]

Talking down the pound

http://www.independent.co.uk/news/business...nd-1793565.html

I am absolutely fed up with the Labour government, as most have probably already noticed. However, the policy of not doing anything about the GBP exchange was stated a long time ago, so this is not really a new revelation.

However, it will doubtless strain relations with Europe, who will see this as an unfair "beggar my neighbour" tactic to try to rescue the ruined economy that Labour have once again left us with. Brown, on his "international swan around", proclaims that we'll all solve this together and that countries should not yet reign in the stimulus activities, and on the other hand hand he is purposely devaluing the GBP. Let's see what Merkel has to say, as she will also want to boost exports from Germany, with Brown sinking the GBP this is one export market less.

But now, after a respite of six months during the stock market mini-boom, it looks like currencies will become more volatile again. Is this going to be another carousel of first one currency going down, and then the next, and then the next until we are all at the same point again? I still have Sunday to think this one through before I possibly take action and sell more GBP and move into EUR and AUD. I never wanted to be a currency speculator, but the current dismal situation in the UK has forced me into it.

http://www.bloomberg.com/apps/news?pid=206...id=a_g9vagVySC8

“A currency which the country’s own central bank likes to see weak obviously is not an attractive investment,” analysts including Lutz Karpowitz at Commerzbank AG in Frankfurt wrote in a research note. “If King keeps digging then he is clearly signaling that he does not care about this loss of trust.”

However, GS is playing another tune.

By contrast, Goldman Sachs Group Inc. said Sept. 22 investors should sell the euro versus the pound at 90.80 pence.

However, I don't trust this lot at all, what they public announce is possibly just another ruse for them to take the opposite position at a better price....

[chiang mai]

GS does seem to do that, apparently. If it's any comfort, I have moved a larger than usual amount out of GBP into THB and also moved some money into AUS and RMB.

[mommysboy]

This report from the Times seems to tell it the way it is:

The pound dipped below $1.60 for the first time in four months yesterday as concerns persisted that the Bank of England was happy to live with a weak currency.

Sterling fell by 0.6 per cent against the dollar to close at $1.5947 in London, a day after Mervyn King, the Governor of the Bank of England, had said that the pound’s decline would be helpful in rebalancing Britain’s economy, by supporting efforts to boost exports. Against the euro, the pound fell by 0.7 per cent to €1.085.

There were other concerns, too, that helped to pull the pound down, not least that the Bank might try to encourage lending by cutting the interest it pays on deposits held with it by British banks. That, in turn, could trigger a more widespread rate reduction. There was also unease about the quantitative easing (QE) programme and Britain’s huge budget deficit.

Howard Archer, chief UK and European economist at IHS Global Insight, the research consultancy, said: “Mervyn King’s comments are a big factor in sterling’s decline. But there is also great uncertainty around what the eventual impact of quantitative easing will be and whether the programme will be expanded.

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• Sterling descends and Governor talks it down
  

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“Markets don’t like uncertainty and what the markets don’t like isn’t good for sterling, since UK asset prices are penalised and they are denominated in sterling.”

QE is designed to stimulate the economy through the printing of money and buying of assets from financial institutions, in the hope that they will lend and invest more. So far, the Bank has bought about £150 billion of assets and it has plans to buy a further £25 billion.

However, there is a growing consensus that it will look to expand QE further in the next few months, increasing market uncertainty.

Mr Archer believes that the negative sentiment surrounding the pound could push it down to as low as $1.55 and €1.05 in the short term, but he expects it to settle around its present levels: “It is not just the UK. Wherever you look, like the eurozone or the US, there are serious problems too. The danger is that all this negative talk can become self-fulfilling, but I don’t think there’s an economic case for sterling to fall much further.”

Philip Shaw, chief economist at Investec, agreed that sterling could fallto about $1.57 and €1.075. However, he predicted that it would rebound to the high $1.60s or even $1.70s by the end of the year and to about €1.17.

The pound has fallen by about 25 per cent against other leading currencies in the past two years, but, despite its recent slump, it has climbed significantly since the start of the year.Sterling hit a 23-year low against the dollar — of $1.35 — in January, before recovering to $1.70 in August. In December last year, it hit a low of €1.02 before recovering to €1.19 in August, meaning that 84p would buy one euro.

Meanwhile, Kate Barker, a member of the Monetary Policy Committee (MPC), the Bank’s interest rate-setting body, admitted yesterday that the MPC should have started to reduce interest rates sooner than it did. “With 20:20 hindsight, we probably should have cut interest rates earlier, but I don’t think it would have made a big difference,” she said, adding that borrowing costs were unlikely ever to return to their historically low levels just before the financial crisis.

Oil prices rebounded after recent heavy falls, with Brent North Sea crude rising by 56 cents to $65.38 a barrel in London trading. Nimit Khamar, an analyst at Sucden Financial Research, said: “Crude prices are higher after the dollar weakened and G20 nations pledged to keep in place emergency economic stimulus [measures] until there is a durable recovery.”

It's simply not possible to discuss directly anymore, best if we all stuck to simple reporting.

[chiang mai]

I still like this, courtesy of Cloudhopper, better than anything The Times has ever produced:

http://www.thaivisa.com/forum/redirect.php...v%3DRYA0DsPcbaU

[chiang mai]

To the poster that sent me a message, here is the link to HSBC HK, apologies but I seem restricted in sending you another message for some reason.

http://www.hsbc.com.hk/1/2/home

[12DrinkMore]

It's simply not possible to discuss directly anymore, best if we all stuck to simple reporting.

Surely one object of a discussion is to validate ones ideas against others? Through TV and other forums I have been able to improve my knowledge. And I have to admit to being wrong in certain, if not a whole lot of ideas, but further research and discussion has led to greater understanding of the crucial issues. Your posts in this thread have been persistently stubborn and repetitive regarding the resilience of the UK and its economy. And you have not really made any arguments or observations to support the statements made, except maybe "Britannia Rules the Waves".

Anyway, if you are going to restrict yourself to just posting uncommented news articles, which are, in the most cases, also opinionated, then please post the url as well. In the last post this was from

http://business.timesonline.co.uk/tol/busi...icle6850262.ece

Did you check out the flurry of criticism at the end of that report?

[teletiger]

It's simply not possible to discuss directly anymore, best if we all stuck to simple reporting.

Let me run this idea by you. You stick to simple reporting (with URLs) and the rest of us will carry on as normal.

Regards.

[mommysboy]

It's simply not possible to discuss directly anymore, best if we all stuck to simple reporting.

Surely one object of a discussion is to validate ones ideas against others? Through TV and other forums I have been able to improve my knowledge. And I have to admit to being wrong in certain, if not a whole lot of ideas, but further research and discussion has led to greater understanding of the crucial issues. Your posts in this thread have been persistently stubborn and repetitive regarding the resilience of the UK and its economy. And you have not really made any arguments or observations to support the statements made, except maybe "Britannia Rules the Waves".

Anyway, if you are going to restrict yourself to just posting uncommented news articles, which are, in the most cases, also opinionated, then please post the url as well. In the last post this was from

http://business.timesonline.co.uk/tol/busi...icle6850262.ece

Did you check out the flurry of criticism at the end of that report?

Yes of course I'm the one that researched it, I mean really !, which is why I regard most of what I write as being open to view on both sides, and it hardly paints a rosy picture of the UK economy.

On many postings I've laid out my views and adjusted where necessary. But how can one really take your view of unmitigated gloom seriously ?

To summarise my own thoughts then:

The pound is around fair value but is now set to be shorted as usual. Unlike the bt for instance BOE does not exercise intervention following the debacle a few years ago and more. It could go as low as 1.55 to the dollar.

Regarding the UK economy: As we know GDP will contract along the lines of most other economies, somewhere around 3-4% this year, before initiating a slow crawl out of recession behind major competitors. However, the bitter pill of devaluation will boost exports and curb imports. Imported inflation will occur but will be limited as domestic suppliers find themselves able to compete. Next year will be a bumper year for British tourism. The retail sector will begin to show signs of recovery. The biggest developments will be a return of large capital inflows in to UK stocks and shares, and directly in to UK factories and assembly plants. By the end of next year UK will start to show signs of a more vigorous growth and sentiment will swing in it's favour. This will herald an altogrether more positive period of growth for UK and one based on balance.

Regarding the public sector, this will weigh heavily on any growth for several years to come forcing severe cuts in public spending, most notably in Roads and Transport, and welfare payments. Child benefit will be scrapped and dole payments to under 25's severely restricted. Most major institutions, eg, NHS will be subject to swingeing cuts at management level.

Unemployment will rise to a staggering level and wages will fall in real terms. It is likely that there will be a change of government although this is not a foregone conclusion due to the weakness of the opposition.

In the middle of July of next year the nation will enjoy a much needed boost as the national football side win the football world cup. This may prompt a snap general election.

Towards the end of the year we will the first in a number of interest rate rises in order to prevent over heating of the economy in successive years.

I'll have a break then give my views about Thai economy.

[mommysboy]

It's simply not possible to discuss directly anymore, best if we all stuck to simple reporting.

Let me run this idea by you. You stick to simple reporting (with URLs) and the rest of us will carry on as normal.

Regards.

Let me run this idea by you. You shut up! Retards.

[Tafia]

Interesting but way beyond the comprehension of most laymen; and the verbal and insults being slung over the topic....

Exchange rates fluctuate and so at some point everyone is right.

Me? Im just a realist, pound up pound down, baht weak baht strong dollar v baht or dollar v sterling.

The fact is no one knows for sure and the most important question is what can I do about it?

Nothing!! So I simply don't worry about it.

Edited September 26, 2009 by Tafia

[mommysboy]

The Thai economy is an altogether more difficult beast to get to get to grips with.

Thailand is very dependent on other major economies in particular the US. It is an export driven economy and it's GDP has and will continue to suffer greatly. In addition Thailand's growth rate was deemed on the poor side even before the global recession and there is nothing to say this will have changed. Thus, I think Thailand's recovery will also be long and slow.

Just how tough it will be depends on whether the bt. is encouraged to soften. On the one hand there is a clear economic imperative as a high bt drags on an already uncompetitive Asian nation which is 70% export driven, on the other, well why should it in purely financial terms?

One growing concern will be public debt and government debt as the present administration seek to kick start the economy from within. It's potentially a very big problem, and it's essentially about keeping the public purse together until the recession and it's slow recovery draws to, a close.

Tourism will continue to drag. Exports will not show the anticipated recovery due to a general lack of demand and the high bt as experienced in US. Thus, I don't think next year will show any more than a 2% growth largely on the back of government spending.

The nation will overcome it's recent political instability, however inefficiency, under investment, and corruption will again prove to thwart grwth still further.

For me, it's a question of whether Thailand runs out of money, before the economy recovers sufficiently. I think it probably will as it had strong public finances until a few months ago, but in 5 years time, we will see Thailand encumbered with a great deal of public debt and it will be same same.

[chiang mai]

This thread's become embarrassing, perhaps the Mods could put it out of its misery?

[mommysboy]

This thread's become embarrassing, perhaps the Mods could put it out of its misery?

Yes I agree you and drinkmore have rather ruined a vibrant topic. Let's close it! What a bore!

[CaptainARK1]

For those people who don't follow such things, GBP has fallen against USD and as a consequence it has also fallen against THB - today for the first time in a quite a while traders are talking once again about the possibility of parity with the EURO and this time around I suspect it could become a reality. SO, if you're staying in Thailand and you hold Sterling but spend THB, best get some changed PDQ because things are not likely to get any better for quite a while.

(No disrespect intended)

"you" refers to all Brits - and in large part towards the end refers also to the US, almost all soundly asleep at the wheel, the awake ones are roasting and toasting and watching in dismay

Were you asleep for the last 2 years? ..... GBP has been crashing since Nov 2007. The recent Jan - Aug rally, instead of being the opportunity to take protective means, no instead you got lulled back into Lalaland. Now you're getting f-ed again and wallowing in misery like crybabies.

Were you asleep for the last several decades, wherein decade by decade the UK gave up ground in almost every regard? So thoroughly surpassed and eclipsed by the USA that it invokes the priceless comparison, "a frog's p*ssy to the Panama canal"

Regardless where the GBP goes, hasn't the UK's past history been enough to sound the alarm about both it and the GBP? A relevant cliche ... those who don't learn from History are doomed to repeat it.

Chronology of events

England was the leading economy at the tail end of the 19th century but then was surpassed by: the US, Germany and Japan and now even overtaken by China and France, and get this, surpassed even by the now almost bankrupt California.

Lost reserve currency status to the Dollar.

Decided not to go with the Euro - in hindsight everyone is a f**in genius, so no comment here.

Recently interest rates dropping to the lowest in entire UK history.

Lloyds fall from grace into nationization (govt. owns 65%). Questions have been raised by ratings agencies such as Standard & Poors and Moody's over the long-term viability of Britain's gilt-edged triple-A rating. This event has not only been forgotten, UK-ites are back to being blissfully daft.

£--- bn stash of bad assets in euros and dollars leaves Britain on the verge of becoming the next Iceland. Next stop IMF. Remember these statements from just earlier this year? .... don't think they are a warning? Don't think they are just as valid a warning as the GBP's dance?

Gordon Brown said ... "This is an international crisis that has not been generated in Britain." He blamed the USA.

Here are the facts, Gordy and for the america bashers ...

USA leveraging = 12:1 ... Europe leveraging as high as 52:1.

Conclusion by UK thinktanks, This means European claims the US is the worst offender in this crisis, do not hold water

Read these 2 excellent DATED writeups by a Brit - astonishingly good work.

http://www.thesun.co.uk/sol/homepage/news/columnists/clarkson/article1655505.ece

http://www.nowpublic.com/tech-biz/uk-and-switzerland-could-soon-follow-iceland-bankruptcy

IMHO, UK bankruptcy is inevitable.

USA could go the same route eventually, but as long as the 3-month treauries continue to find demand, they can literally keep satisfying their short-term debt hunger indefinitely - until they can't anymore, which is anybody's guess when this whopping fiasco will eventually crash.

[Naam]

hmmm... once in a while H-ARK-monica presents some valid points

[sorensen]

USA leveraging = 12:1 ... Europe leveraging as high as 52:1.

Very good post CaptainARK. What does the above mean?

[12DrinkMore]

IMHO, UK bankruptcy is inevitable.

You can't post all that UK doom on here. Mommysboy just won't have it. He'll be hounding you around ThaiVisa for the next few days....

:D

But yes, things are looking very bleak for the UK and Merv has been out and about again. And every time he's seen in public the GBP falls another percent or two.

This time he was in Sweden, where they have taken the unbelievably crazy step of charging interest on money deposited at the Central Bank. Yes, you heard, not PAYING interest but CHARGING it.

http://www.telegraph.co.uk/finance/newsbys...licy-fears.html

Sterling dropped against a basket of other currencies, extending its recent run of falls. It came as the Bank of England confirmed that its governor had met with Riksbank officials during a visit late last week to talk to the Royal Swedish Academy of Engineering Sciences.

The BoE should now seriously consider keeping Merv in a secure cell out of the public's eye. Maybe the huge space left after Golden Boy flogged off the yellow stuff would be perfect?

And catch these vids for more Brit Bashing

:D

1 GBP=1.08 EUR=1.59 USD Up or down, not really a question....

[teletiger]

Central banks charging interest for banks deposits is a valid tool. King is trying to get the banks to lend out their reserves instead of parking them with the BoE. King must think that people who could pass the new borrowing criteria, actually want to borrow.

Fact maybe that most people wouldn't pass and those that would don't want it.

Maybe they'll lower the standards again, as they've started to do in the US. Madness.

Regards.

[12DrinkMore]

Central banks charging interest for banks deposits is a valid tool. King is trying to get the banks to lend out their reserves instead of parking them with the BoE. King must think that people who could pass the new borrowing criteria, actually want to borrow.

Fact maybe that most people wouldn't pass and those that would don't want it.

Maybe they'll lower the standards again, as they've started to do in the US. Madness.

Regards.

It may be a possible tool, but I don't see how this is going to get money out of the banks' accounts at the BoE through issuing more credit to consumers.

When banks issue credit they don't take an existing chunk of cash from their reserves at the Central Bank and then lend it out. They simply create a bookkeeping account in the name of debtor A with a number of Quids in it, up to the limit allowed by the fractional reserve requirement. Issuing of more credit simply increases the amount of reserves they are required to have.

But now what happens? The debtor A presumably has borrowed the money to do something with it, so then the money gets paid into another bank by some jiggery pokery at the end of the day when the banks balance the books. Generally this means that the respective accounts at the BoE are debited/credited accordingly.

So what is going to happen if the banks have to pay for money at the BoE? They are not going to like this extra cost, which surely will then perversely be passed on to the customers through HIGHER interest rates. They will also bring down their reserves to the minimum level possible and stuff the money into some other investment; for example gilts. In fact, negative interest rates at the BoE could be construed as a means of forcing banks to sponsor even more of Brown's massive debts. And, off course, the prudent savers will be hit once again.

But if someone can correct my argument then please do, I may be misunderstanding something here.

And, as you say, the people are moving from credit taking to paying off debts and saving. In the US Obamah has recognised this, hence the stance that the Asians should spend a little more whilst the US save a bit more.

Edited September 29, 2009 by 12DrinkMore

[teletiger]

Maybe the BoE will only charge interest on unused reserves. I.e. If a bank lends out 100 million, it needs to show reserves of 10 million. (or whatever the fractional number is) The BoE would then not charge that 10 million reserve.

Regards.

[cmsally]

There is more than a vague sense that something is going on.

Mervyn King opening his big mouth in Sweden seems to have been counteracted by a meeting of BoE and economists which was well played down in the press but basically seems to have said that they want him to keep his mouth shut, (is this the BoE telling the head of the BoE to shut up?)

as well as some retail figures thrown in for good measure.

Sterling jumps..

Lo & behold on the same day the Czechs announce they will block the EU's Lisbon Treaty thus making it very probable that if passed at all it would be after the UK election (conservatives promise a referendum on this).

Thus no President of the European Council needed just yet. I can almost sense TB's disappointment from here.

Czech mate!

Czech move to block EU Treaty

[cmsally]

Hmm.. seems Mervyn & TB maybe planning to skip off into the sunset into Euroland. Maybe his pals at BoE caught on?

BoE governor...to be number 2 ...

[Naam]

Hmm.. seems Mervyn & TB maybe planning to skip off into the sunset into Euroland. Maybe his pals at BoE caught on?

BoE governor...to be number 2 ...

rational thing to do!

[mommysboy]

http://www.bangkokpost.com/business/econom...thai-corruption

This is a story on Thai corruption. It confirms what we all know. My guess is that it will remain the single biggest impediment to Thailand's growth because of it's terrible effect on efficiency. It's a shame for everybody really. Thailand is in fact quite a rich country, but just look around at the infrastructure. Corruption prevents adequate investment. Even when a job is done it runs the risk of being inadequate from the start due to poor workmanship and dodgy materials. A simple example would be the internet system in my apartment which is wholly inadequate given the tens of thousands invested. And this small example is replicated throughout BKK.

A GBP/BT thread needs a balance about what is likely to happen in both countries. People indulge in 'symptomatic' comparison but not hard facts with their own currency, whilst painting a rosy picture for Thailand.

The way Thais do business will always act as a brake on the economy and ultimately the balue of the Bt.

[chiang mai]

http://www.bangkokpost.com/business/econom...thai-corruption

This is a story on Thai corruption. It confirms what we all know. My guess is that it will remain the single biggest impediment to Thailand's growth because of it's terrible effect on efficiency. It's a shame for everybody really. Thailand is in fact quite a rich country, but just look around at the infrastructure. Corruption prevents adequate investment. Even when a job is done it runs the risk of being inadequate from the start due to poor workmanship and dodgy materials. A simple example would be the internet system in my apartment which is wholly inadequate given the tens of thousands invested. And this small example is replicated throughout BKK.

A GBP/BT thread needs a balance about what is likely to happen in both countries. People indulge in 'symptomatic' comparison but not hard facts with their own currency, whilst painting a rosy picture for Thailand.

The way Thais do business will always act as a brake on the economy and ultimately the balue of the Bt.

It's THB Mommysboy,THB for Thai Baht - BT is the telephone company in the UK.