Uh-oh ... investors abandoning gilts.

WTF?_2

Big implications for this one (from the FT so you may need to register, for free):

http://www.ft.com/cms/s/0/e8f1b866-afd6-11dd-a795-0000779fd18c.html

Sterling tumbles to 12-year low

By Peter Garnham

Published: November 11 2008 11:19 | Last updated: November 11 2008 15:37

Sterling hit a 12-year low against a basket of currencies and a record trough against the euro on Tuesday as evidence that investors were abandoning UK government bonds weighed on the pound.

Analysts said the news could limit the scope for the UK government to deliver a fiscal stimulus to the UK economy.

Data from the Bank of New York Mellon showed that after a 12-month period of relatively stable flows of foreign capital into and out of UK fixed instruments, since mid-September extremely heavy outflows have been registered. This has coincided with severe downward pressure on sterling.

Until a year ago, sustained inflows into UK government bonds had supported the pound, sending it up to a 26-year high against the dollar above $2.11 in November 2007.

However, BNY Mellon’s figures estimate that the outflows from UK fixed instruments since September 10 this year have offset around 75 per cent of the inflows seen since the start of 2004

This could have massive consequences - if Gordon starts printing then start buying hard assets with your pounds, or suitable foreign currency, because Sterling is going straight down the pan and inflation will be shortly following.

ess0two

http://forums.moneysavingexpert.com/showthread.html?t=1279601

Some good news for a change.

kennyboy66_2

The fact that yields have actually fallen on UK gilts in the maturity range 2 year to 10 year in the last month (long gilts are roughly unchanged), would suggest that the majority of investors are less concerned about inflation than you.

WTF?_2

kennyboy66 wrote: »

The fact that yields have actually fallen on UK gilts in the maturity range 2 year to 10 year in the last month (long gilts are roughly unchanged), would suggest that the majority of investors are less concerned about inflation than you.

"Hear no evil, see no evil". The MSE bull mantra.

kennyboy66_2

And now for some better news. Exports rising faster than imports!

http://www.ft.com/cms/s/0/db6b0fe8-afd7-11dd-a795-0000779fd18c.html?nclick_check=1

And look at this !

http://www.ft.com/cms/s/0/1ed859b6-af0b-11dd-a4bf-000077b07658.html

Despite the pound falling - import prices between September & October actually fell 2.3%

Surely you might now admit that things are looking so bad that cutting rates was actually the correct thing to do.

WTF?_2

kennyboy66 wrote: »

And now for some better news. Exports rising faster than imports!

http://www.ft.com/cms/s/0/db6b0fe8-afd7-11dd-a795-0000779fd18c.html?nclick_check=1

And look at this !

http://www.ft.com/cms/s/0/1ed859b6-af0b-11dd-a4bf-000077b07658.html

Despite the pound falling - import prices between September & October actually fell 2.3%

Surely you might now admit that things are looking so bad that cutting rates was actually the correct thing to do.

Of course they're rising faster - a devalued pound will put downward pressure on imports and help exports. Too bad we have a massive reliance upon imports (including food and energy, not quick/easy to replace with home produced) - this is going to make it very hard for a lot of people.

Still, we need to wean ourselves off it sooner or later and become a producer if we are to have any sort of wealth to base our standard of living off of. Living off of money borrowed from foreigners and cheap imported goods wasn't sustainable.

kennyboy66_2

!!!!!!? wrote: »

"Hear no evil, see no evil". The MSE bull mantra.

Now, now, !!!!!!, you are fond of admonishing others for hurliing personal insults or resorting to sarcasm.

You are also a great one for claiming "the markets are telling us this & that" like some modern day Oracle from Delphi.

However when the markets (check the FT if you don't believe me) indicate something that goes against your, lets be honest, somewhat dogmatic views, out comes the sarcasm.

I am only disappointed you didn't put one of those "roll-eyes" sarcasm thingymajigs you are so fond of.

When events change, I am quite happy to change my mind - what do you do ?

StevieJ

!!!!!!? wrote: »

Of course they're rising faster - a devalued pound will put downward pressure on imports and help exports. Too bad we have a massive reliance upon imports (including food and energy, not quick/easy to replace with home produced) - this is going to make it very hard for a lot of people.

Still, we need to wean ourselves off it sooner or later and become a producer if we are to have any sort of wealth to base our standard of living off of. Living off of money borrowed from foreigners and cheap imported goods wasn't sustainable.

Wait a minute:
Despite the pound falling - import prices between September & October actually fell 2.3%

WTF?_2

StevieJ wrote: »

Wait a minute:
Despite the pound falling - import prices between September & October actually fell 2.3%

And how much more would they have fallen had the pound NOT devalued?

Can't confirm it but saw someone claiming that petrol would right now be approx 70p/litre if the pound was as strong as it was this time last year. Sounds about right.

StevieJ

!!!!!!? wrote: »

And how much would they have fallen had the pound NOT devalued.

Can't confirm it but saw someone claiming that petrol would right now be approx 70p/litre if the pound was as strong as it was this time last years.

We are not on this one again :rotfl:Imports have reduced in price, end of.

WTF?_2

kennyboy66 wrote: »

Now, now, !!!!!!, you are fond of admonishing others for hurliing personal insults or resorting to sarcasm.

You are also a great one for claiming "the markets are telling us this & that" like some modern day Oracle from Delphi.

However when the markets (check the FT if you don't believe me) indicate something that goes against your, lets be honest, somewhat dogmatic views, out comes the sarcasm.

I am only disappointed you didn't put one of those "roll-eyes" sarcasm thingymajigs you are so fond of.

When events change, I am quite happy to change my mind - what do you do ?

The only thing that has 'changed 'is that my prediction of likely trouble ahead selling Sterling bonds has now been confirmed by the Financial Times.

If you really are determined to ignore that fact, not much more I can do really.