Pound Starting To Stenghen.

[mommysboy]

In the light of what is happening elsewhere I think it would be a mistake to focus on the UK.

I do fear a global meltdown at this point.

And a further strengthening of the baht!. Quite what chance Thailand will have after that is anyone's guess.

[whichschool]

Housing in the UK will go down - Sell now whist you can .

Sterling Down along with the Euro and $ to follow / Asian currencies will be forced up as everything else goes down .

Interest rates ARE going UP as are Taxes - Wages probably down - House prices down .

Surely rising interst rates would see people put their money into the pound as theyd get a return thus raising it value.

With rising inflation i cant see wages falling, only in relative terms as that of the value of property ..,. inflating the way out of our debt is Gords masterplan. via QE

Edited February 5, 2010 by whichschool

[Thongkorn]

UK House price up, Unemployed going down , OK its a small amount but in the right direction , Out of recession Just ,again in the right direction,The UK will return stronger. A lot of businesses are returning to the UK for two reasons , product are not as reliable and transport costs, If the UK is that bad why are foreign country's rushing to invest, IE cadburys bought out by an American company .

[chiang mai]

UK House price up, Unemployed going down , OK its a small amount but in the right direction , Out of recession Just ,again in the right direction,The UK will return stronger. A lot of businesses are returning to the UK for two reasons , product are not as reliable and transport costs, If the UK is that bad why are foreign country's rushing to invest, IE cadburys bought out by an American company .

Sorry but I don't see Kraft's takeover of Cadbury as investing in the UK, Kraft bought a business, a brand name and products, UK jobs will go as a result.

Nobody is suggesting that the Uk is a bad place etc. What people are trying to do here (I hope) is to identify what might happen and where British expats might be in say 6, 12 and 24 months time, based on likely economic events. We've already seen the Pound/Baht go from low 70's to mid 50's and now the indicators are we're headed into the 40's, it would be nice to try and anticipate what might happen next (but without trying to appear critical of the UK which is not the intent).

So yes, UK house prices are up very slightly but a fall is due (overdue), unemployment will increase to in excess of 2.9 mill (2.8 mill was the magic number last time around that caused home-owners into forced sales), personal bankruptcies just hit a record high so that wont help the housing picture - businesses returning to the UK, I'm unsure about that, the Cadbury sale will cost the UK jobs so that's a bad thing but I take your point about quality.

Interest rates, forecast to be around 2% (max) by end 2011 so that's not going to help the Pound - I think it's now only a matter of time before we see the sub 50 Baht/Pound and that's going to hurt the British expats on fixed income such as pensioners, seriously bad news. Unfortunately, the strength of the Pound is linked to the strength of the Euro (or lack of it) since UK banks currently have over 100 bill in Euro denominated debt.

And the very worst of all of this is yet to come since there's a good chance that the elections may produce a hung Parliament, the impact of that would likely cause markets to have no confidence at all in governments ability to eliminate debt. Honestly, as much as I'm trying desperately to find it I cannot see any positive short or medium term news about the UK, from a UK expat perspective and I dearly wish that things were different..

[JimsKnight]

A hung parliament could be the best thing that ever happens to the nation.

It might knock some sense into the politicians and get them to be sensible for a change.

QE, low-interest rates, spend spend spend mentality plus the world-crisis is perpetually screwing the UK sideways.

The only glimmer of hope is that the Euro might collapse and benefit the UK as other nations buy into £.

http://economictimes.indiatimes.com/news/i...how/5540608.cms

http://www.independent.co.uk/opinion/comme...ins-574403.html

[chiang mai]

A hung parliament could be the best thing that ever happens to the nation.

It might knock some sense into the politicians and get them to be sensible for a change.

QE, low-interest rates, spend spend spend mentality plus the world-crisis is perpetually screwing the UK sideways.

The only glimmer of hope is that the Euro might collapse and benefit the UK as other nations buy into £.

http://economictimes.indiatimes.com/news/i...how/5540608.cms

http://www.independent.co.uk/opinion/comme...ins-574403.html

Personally I don't see the Euro collapsing and even if it did, I think that USD would be the safe haven that money would head for. Somebody, anybody, give me a couple of solid non-emotive reasons why the Pound is not toast.

[whichschool]

^^^^

Because its survived the dollar becoming reserve currency over it, 2 worlds wars, a depression and plenty of recessions.

Oh yes and a educated work force, a world class infrastructure, natural resources (coal, oil, farming) its a very innovative country, has been a global centre of finance from the year dot, and despite problems in finance the country is ran so it continues to flourish.

Yes things arent looking to good and Gordon and Osama have delayed the crash and slowed any future recovery with their spending but it'll survive.

[chiang mai]

^^^^

Because its survived the dollar becoming reserve currency over it, 2 worlds wars, a depression and plenty of recessions.

Oh yes and a educated work force, a world class infrastructure, natural resources (coal, oil, farming) its a very innovative country, has been a global centre of finance from the year dot, and despite problems in finance the country is ran so it continues to flourish.

Yes things arent looking to good and Gordon and Osama have delayed the crash and slowed any future recovery with their spending but it'll survive.

I'm looking for solid current economic reasons rather than a list of past achievements, having an educated workforce and being a financial centre, seem to be the only ones there that have any mileage in the debate.

And yes, "it will survive", the question is what will happen to it between now and the ultimate recovery in several years time.

Edited February 7, 2010 by chiang mai

[Naam]

Oh yes and a educated work force, a world class infrastructure, natural resources (coal, oil, farming) its a very innovative country, has been a global centre of finance from the year dot, and despite problems in finance the country is ran so it continues to flourish.

let us not forget to mention the victorious Falklands war

[GuestHouse]

I'd stay off the subject of Victorious Wars if I were you Naam.

Or - You can't have it both ways so choose which way you want.

[jesimps]

Oh yes and a educated work force, a world class infrastructure, natural resources (coal, oil, farming) its a very innovative country, has been a global centre of finance from the year dot, and despite problems in finance the country is ran so it continues to flourish.

let us not forget to mention the victorious Falklands war

I can think of two retorts to your post pal, but not being a complete twit, I won't send them. You should have been banned from these forums a long time ago. If there are any mods reading this, I'd like to object to Naam's posting.

[mommysboy]

Solid fact! Well it is out of recession- just!. Manuafacturing figures up. Wasn't there an OECD report showing a big rebound? Yes, overseas investment up?. Not good but at least UK is through the intial stage. Ironically, the low pound is helping greatly and I guess it will stay there until other currencies come in to line. Bubbles always burst, so yes of course the Euro will fall and the baht and a good few others. I hope not too soon so that UK gets all it's long term real investors in place. That's what is needed- a long term production led economy, to then be backed up by a booming service economy, and that's what will happen. UK will probably com out ahead of the whole lot in the end IMHO. But for now, the sackcloth and ashes people and institutions richly deserve.

[chiang mai]

Solid fact! Well it is out of recession- just!. Manuafacturing figures up. Wasn't there an OECD report showing a big rebound? Yes, overseas investment up?. Not good but at least UK is through the intial stage. Ironically, the low pound is helping greatly and I guess it will stay there until other currencies come in to line. Bubbles always burst, so yes of course the Euro will fall and the baht and a good few others. I hope not too soon so that UK gets all it's long term real investors in place. That's what is needed- a long term production led economy, to then be backed up by a booming service economy, and that's what will happen. UK will probably com out ahead of the whole lot in the end IMHO. But for now, the sackcloth and ashes people and institutions richly deserve.

The last time you told us that manufacturing and overseas investment were up I posted the links showing that in fact the reverse was true, nothing has changed on that front in a week or so and merely writing the words, "solid fact" before the statement doesn't make it any less incorrect!

[mommysboy]

Solid fact! Well it is out of recession- just!. Manuafacturing figures up. Wasn't there an OECD report showing a big rebound? Yes, overseas investment up?. Not good but at least UK is through the intial stage. Ironically, the low pound is helping greatly and I guess it will stay there until other currencies come in to line. Bubbles always burst, so yes of course the Euro will fall and the baht and a good few others. I hope not too soon so that UK gets all it's long term real investors in place. That's what is needed- a long term production led economy, to then be backed up by a booming service economy, and that's what will happen. UK will probably com out ahead of the whole lot in the end IMHO. But for now, the sackcloth and ashes people and institutions richly deserve.

The last time you told us that manufacturing and overseas investment were up I posted the links showing that in fact the reverse was true, nothing has changed on that front in a week or so and merely writing the words, "solid fact" before the statement doesn't make it any less incorrect!

I suppose it really comes down to what prayer sheet you are singing from. I would have thought you have to give some credence to The Times, Telegraph, etc, and the OCED report was genuine enough. Anybody would think UK is a complete tailspin and alone in it's troubles. I think also that reported figures are quite historic.

[chiang mai]

Solid fact! Well it is out of recession- just!. Manuafacturing figures up. Wasn't there an OECD report showing a big rebound? Yes, overseas investment up?. Not good but at least UK is through the intial stage. Ironically, the low pound is helping greatly and I guess it will stay there until other currencies come in to line. Bubbles always burst, so yes of course the Euro will fall and the baht and a good few others. I hope not too soon so that UK gets all it's long term real investors in place. That's what is needed- a long term production led economy, to then be backed up by a booming service economy, and that's what will happen. UK will probably com out ahead of the whole lot in the end IMHO. But for now, the sackcloth and ashes people and institutions richly deserve.

The last time you told us that manufacturing and overseas investment were up I posted the links showing that in fact the reverse was true, nothing has changed on that front in a week or so and merely writing the words, "solid fact" before the statement doesn't make it any less incorrect!

I suppose it really comes down to what prayer sheet you are singing from. I would have thought you have to give some credence to The Times, Telegraph, etc, and the OCED report was genuine enough. Anybody would think UK is a complete tailspin and alone in it's troubles. I think also that reported figures are quite historic.

The manufacturing news that was reported in the media resulted from the CIPS/Markit surveys which comprises PMI data, an index that had risen according to Markit, the private company that produces and sells the information to companies at £500 a time. CIPS jumped on the news and gave a positive spin tot he recovery angle, fair enough I suppose. But if you dig a little deeper into the whole piece you'll find that the index is compiled by Markit contacting all of the purchasing managers who buy their monthly reports and asking, how do feel things are going - from those subjective individual views the index is derived.

On the other hand, the Office of National Statistics reports reports actually production numbers but like the Land Registry Office, their data is delayed by a couple of months - the last time the ONS did report was in December when they reported a fall. The analogy is akin to Nationwide reporting that house prices and volume have increased and then two months later the Land Registry reports the actual numbers for the same period which show the opposite.

The message here is, consider the source of the data and don't believe everything that is reported in the newspapers.

[12DrinkMore]

http://www.independent.co.uk/opinion/comme...ins-574403.html

Jeeze, that reference is SIX YEARS old.

With all PIGS and their problems in the news, the ridiculous figures bandied around by those <deleted> at Nationwide saying the UK property market is once more making double figure gains, the massive pension scheme deficits, the unbelievable improvement in unemployment (December is a month where people are taken on for seasonal work), and the 0.1% (YEAH) growth in the UK economy; surely you could hit us with something at bit more relevant?

Lies, lies and more lies. Expect even more distorted economic indicators to come out of the UK as Brown desperately tries to get reelected.

But back to Greece, even though the thread is supposed to be GBP related, I have still to read how a country can exit from the EUR.

Greece should NOT be bailed out, the have been slurping at the benefits of the Euro for a decade or so and pissed it up against the wall by awarding themselves high wages, subsidies, extremely generous pensions, kept up an inefficient system of tax collection and lying to the rest of the world; basically living it up on the backs of the Germans.

This has to stop.

If there is any indication that Greece will reintroduce the Drachma, there would be an instant flood of EUR out of the country and nobody would accept the Drachma in transactions, as it would be constantly devalued.

Nope, they have to fix the problems.

And the UK should join the EUR for exactly the same reasons. Instead of devaluing the GBP, basically screwing all holders of the GBP, the inefficiencies should be solved, the government waste stopped, and industry encouraged. Surely the future bills cannot be paid based on printing money, increasing administration, and taxing the population even more? Stuff has to be manufactured, produced, extracted to make real money. Anything else, including the massive bank bonuses with their pseudo-profits and house price inflation is simply another tax on real wealth generating activity.

Edited February 7, 2010 by 12DrinkMore

[mommysboy]

http://www.independent.co.uk/opinion/comme...ins-574403.html

Jeeze, that reference is SIX YEARS old.

With all PIGS and their problems in the news, the ridiculous figures bandied around by those <deleted> at Nationwide saying the UK property market is once more making double figure gains, the massive pension scheme deficits, the unbelievable improvement in unemployment (December is a month where people are taken on for seasonal work), and the 0.1% (YEAH) growth in the UK economy; surely you could hit us with something at bit more relevant?

Lies, lies and more lies. Expect even more distorted economic indicators to come out of the UK as Brown desperately tries to get reelected.

But back to Greece, even though the thread is supposed to be GBP related, I have still to read how a country can exit from the EUR.

Greece should NOT be bailed out, the have been slurping at the benefits of the Euro for a decade or so and pissed it up against the wall by awarding themselves high wages, subsidies, extremely generous pensions, kept up an inefficient system of tax collection and lying to the rest of the world; basically living it up on the backs of the Germans.

This has to stop.

If there is any indication that Greece will reintroduce the Drachma, there would be an instant flood of EUR out of the country and nobody would accept the Drachma in transactions, as it would be constantly devalued.

Nope, they have to fix the problems.

And the UK should join the EUR for exactly the same reasons. Instead of devaluing the GBP, basically screwing all holders of the GBP, the inefficiencies should be solved, the government waste stopped, and industry encouraged. Surely the future bills cannot be paid based on printing money, increasing administration, and taxing the population even more? Stuff has to be manufactured, produced, extracted to make real money. Anything else, including the massive bank bonuses with their pseudo-profits and house price inflation is simply another tax on real wealth generating activity.

Whilst I certainly agree with much of what you say reference Greece and the UK as a general stance, I don't agree with your comments on taxation or necessarily on inefficiency. And Greece will have to be bailed out, precisely because the EU will have to face up to it's collective responsibilities, it's not an option.

Surely the whole point of exacerbating the devaluation of the pound is to promote industry which seems to be happening. As for joining the EU, are you joking? UK would go in with it's currency probablu undervalued as much as 20%, and PIGS are in such a mess precisely because they can not devalue.

Governments around the worlsd basically have to lie, because people are not prepared to accept that having a decent quality of life requires a great deal more than 20, 30, 40% of their wage. I don't blame Gord and his chums for this mess, it's hardly been 10 yearsof the loony left and if anything they've overplayed to big business.

[12DrinkMore]

Whilst I certainly agree with much of what you say reference Greece and the UK as a general stance, I don't agree with your comments on taxation or necessarily on inefficiency.

25% of the employed in the UK are working for the government. In some areas even up to 50%. This is crazy. The civil service does not produce anything; it is a cost to the tax payer. They have, under Brown, not only rapidly expanded, but also awarded themselves above inflation salary increases until they are now earning above industry rates. And then add in the tax payer funded guaranteed pensions. The inefficiencies start at the top, from the fraud/theft/overclaiming expenses, call it what you will, and continues right down through the whole system. With people building up little empires to ensure that they are "irreplaceable". I know because my father was a civil servant his whole career, reaching the upper hierarchy of the local administration. Efficiency is not what is wanted, it is a world of increasing the budget and then over-spending it, so next year's budget is even bigger.

And Greece will have to be bailed out, precisely because the EU will have to face up to it's collective responsibilities, it's not an option.

Actually there is no collective responsibility to bail them out. There IS however a responsibility that the Greeks have failed to meet. The Greeks lied about their economy when applying to join, have constantly lied about the state of their national finances and constantly been late in submitting the lies. Why on earth should the Germans support the lifestyle that the Greeks think they should have but are not prepared to work for? If they are bailed out, then they will receive the justification they need to carry on as before.

No, the Greeks must either fix their own mess, probably causing a bigger mess, as the whole country goes on strike. But so what? Let 'em, I don't care. All subsidies and EU finance should be stopped. They can carry on using the Euro if they want, that is not an issue. Any bailout of Greece will probably take the form of bailing out the non-Greek banks for any loans they made, although I strongly disagree with this too, as the bastard banks would be taking even more money from the tax payers.

Surely the whole point of exacerbating the devaluation of the pound is to promote industry which seems to be happening. As for joining the EU, are you joking? UK would go in with it's currency probablu undervalued as much as 20%, and PIGS are in such a mess precisely because they can not devalue.

That is supposed to be one "advantage" of devaluing a currency. But it is the soft option of not getting the country's economy in order. However, I don't think that UK exports have been particularly boosted. I am not even sure what is still manufactured in the UK anymore. The other side of the coin is that all imports suddenly go up by 20%. And as most manufacturing industries rely also on import the devaluation can only provided a short term support.

Governments around the worlsd basically have to lie, because people are not prepared to accept that having a decent quality of life requires a great deal more than 20, 30, 40% of their wage. I don't blame Gord and his chums for this mess, it's hardly been 10 yearsof the loony left and if anything they've overplayed to big business.

That is a load of <deleted>.

Blair took over a healthy economy from the Tories and, as usual, the Labour Party went on a spending binge and screwed us all. Labour always do this, but unfortunately the UK population has a short term memory and forgets. This time, however, the 10 years of catastrophic mal-administration have left a huge hangover which will take decades to fix.

[MJP]

Going . . . going . . .

http://www.thisislondon.co.uk/standard-bus...-debt-crisis.do

Sterling crashed to an eight-and-a-half month low against the dollar and analysts warned further falls were on the way. The rate of return demanded from UK gilts also hit its highest level against the equivalent German bund for two-and-a-half years.

With Government borrowing in the UK set to hit £178 billion this year - a record 12.6 per cent of gross domestic product - investors fear that Britain could lose its AAA credit rating and face a debt crisis of its own.

Simon Johnson, a former chief economist at the International Monetary Fund said the UK was in a similar situation to Greece and Spain.

Thought it might be worth adding this too, not part of the article.

Edited February 8, 2010 by MJP

[neil324]

The recent falls in Sterling are because of the stock markets getting ahead of themselves,falling and seeing a return of the flight to safety in the Dollar. Many people saying there is a big round of deleveraging coming which will increase this further.

Added to this in the near term you have the problems of the UK,which could add to the falls.

[MJP]

The recent falls in Sterling are because of the stock markets getting ahead of themselves,falling and seeing a return of the flight to safety in the Dollar. Many people saying there is a big round of deleveraging coming which will increase this further.

Added to this in the near term you have the problems of the UK,which could add to the falls.

http://online.wsj.com/article/SB1000142405...tion_Currencies

[chiang mai]

The recent falls in Sterling are because of the stock markets getting ahead of themselves,falling and seeing a return of the flight to safety in the Dollar. Many people saying there is a big round of deleveraging coming which will increase this further.

Added to this in the near term you have the problems of the UK,which could add to the falls.

http://online.wsj.com/article/SB1000142405...tion_Currencies

And if that wasn't believable, read what pal Mervyn had to say today!

http://www.telegraph.co.uk/finance/economi...sts-for-UK.html

[MJP]

The recent falls in Sterling are because of the stock markets getting ahead of themselves,falling and seeing a return of the flight to safety in the Dollar. Many people saying there is a big round of deleveraging coming which will increase this further.

Added to this in the near term you have the problems of the UK,which could add to the falls.

http://online.wsj.com/article/SB1000142405...tion_Currencies

And if that wasn't believable, read what pal Mervyn had to say today!

http://www.telegraph.co.uk/finance/economi...sts-for-UK.html

I've run the numbers, based on an annualised mean of 50 THB to the quid. The basic running costs still come out at £6000 a year. It wasn't that long ago I was making more than that a month.

Starting to think 50 THB is optimistic.

All discretionary spending has been cut. Still £6k a year.

Spreadsheet attached. The 'One-offs' is a wish list. Looking pretty bare.

Household_Thailand_Budget_MJPv2.xls

[chiang mai]

Everybody of course has different circumstances, but for many I suspect the strengthening Baht will mean that Thailand is no longer a cost effective place to live. But the strength of the Baht and the weakness of Sterling, combined with low rates of return on Sterling make for a near perfect storm for a majority of UK expats I reckon - tough times ahead for those not fully hedged because I'm sure that a sub 50 Pound is not far away.

Edited February 11, 2010 by chiang mai

[sharecropper]

The recent falls in Sterling are because of the stock markets getting ahead of themselves,falling and seeing a return of the flight to safety in the Dollar. Many people saying there is a big round of deleveraging coming which will increase this further.

Added to this in the near term you have the problems of the UK,which could add to the falls.

http://online.wsj.com/article/SB1000142405...tion_Currencies

And if that wasn't believable, read what pal Mervyn had to say today!

http://www.telegraph.co.uk/finance/economi...sts-for-UK.html

I've run the numbers, based on an annualised mean of 50 THB to the quid. The basic running costs still come out at £6000 a year. It wasn't that long ago I was making more than that a month.

Starting to think 50 THB is optimistic.

All discretionary spending has been cut. Still £6k a year.

Spreadsheet attached. The 'One-offs' is a wish list. Looking pretty bare.

I just looked at your spreadseet. You can live on just over GBP 6,000 pa here? Or am I missing something?

[MJP]

I've run the numbers, based on an annualised mean of 50 THB to the quid. The basic running costs still come out at £6000 a year. It wasn't that long ago I was making more than that a month.

Starting to think 50 THB is optimistic.

All discretionary spending has been cut. Still £6k a year.

Spreadsheet attached. The 'One-offs' is a wish list. Looking pretty bare.

I just looked at your spreadseet. You can live on just over GBP 6,000 pa here? Or am I missing something?

Yes. £6k a year is the minimum. No frills. But depends on your situation. I have a house and no rent, live in Issan, it's only me and daughter and I kick 5000 Baht a month to mother-in-law for which I get a truck and child care (bargain). The purchasing manager's been fired, no sign of her for the past 6 months.

Guess I could pack up smoking, would save £300 a year. Probably won't use as much grocery either.

Money suddenly has value again. It means something.

[mommysboy]

The UK economy is just mirroring what else is around. Just look at today's news ref Germany slipping back in to recession. I said so all along- so once again for the record- THEY ARE ALL IN THE CART! UK actually less badly placed than most others. Just look at Germany, negative growth, not wrote down nearly enough, and now a currency to bail out! Crazy times.

[MJP]

The UK economy is just mirroring what else is around. Just look at today's news ref Germany slipping back in to recession. I said so all along- so once again for the record- THEY ARE ALL IN THE CART! UK actually less badly placed than most others. Just look at Germany, negative growth, not wrote down nearly enough, and now a currency to bail out! Crazy times.

I refer you to the chart in Post#79.

Worst placed.

Yes, everywhere is bad. But the UK has not cleaned up, far from it.

What's the news on the bailout of Greece? Last I heard there was no chance.

[mommysboy]

Greece failed to secure assurances of a bail out, but would receive help if it meets its pledge to reduce debt. But of course if it did that it wouldn't need help anyway! anybody ever read Catch 22?

Greece's problem is that some of its debt matures within the next month or 2 and it needs money fast. So somebody's bluff is about to be called. Either Greece will have to sign up to a draconian budget to receive EU funds, go cap in hand to the IMF (mosdt likely im my view), or we will see the first of many nation defaults.

IMHO, world creditors have not written off nearly enough debt yet and they'll have to!

[MJP]

Greece failed to secure assurances of a bail out, but would receive help if it meets its pledge to reduce debt. But of course if it did that it wouldn't need help anyway! anybody ever read Catch 22?

Greece's problem is that some of its debt matures within the next month or 2 and it needs money fast. So somebody's bluff is about to be called. Either Greece will have to sign up to a draconian budget to receive EU funds, go cap in hand to the IMF (mosdt likely im my view), or we will see the first of many nation defaults.

IMHO, world creditors have not written off nearly enough debt yet and they'll have to!

Make you right there. Niall Ferguson recently mentioned this scenario . . . next it heads across the channel to the UK and then on to the US, I think were his words.

You are of course right. Everywhere is up the creek, minus paddle.