Quid to Drop Further in Value

purch

Soros is the guy who makes billions from currencies. He is hardly going to tell people to copy him (and sell sterling) as he only makes money when he acts the opposite of what the majority are doing

I don't entirely agree.

Soros (and those like him) use their "fame" (notoriety) to push their own agendas and trades.

In 1992 Soros told everyone that he thought GBP to be overvalued, and that he thought that we could not sustain our tie to the ERM. It was the Quantum Fund that led the selling of GBP, and Soros made huge amounts by getting the 'herd' to follow him and push GBP down and ultimately out of the ERM.

Generali

purch wrote: »

I don't entirely agree.

Soros (and those like him) use their "fame" (notoriety) to push their own agendas and trades.

In 1992 Soros told everyone that he thought GBP to be overvalued, and that he thought that we could not sustain our tie to the ERM. It was the Quantum Fund that led the selling of GBP, and Soros made huge amounts by getting the 'herd' to follow him and push GBP down and ultimately out of the ERM.

I've heard Soros described as a bit of a one trick pony - that he never did anything of note before or since.

Admittedly that's by people who have quite notably failed to make a billion by the pound leaving the ERM!!!

purch

Admittedly that's by people who have quite notably failed to make a billion by the pound leaving the ERM!!!

:rotfl:

I think I probably worked for the only major Bank that didn't follow Soros in 1992.

Our Head of World Wide FX 'decreed' that Soros would lose, and no trader was allowed (officially) to be short of GBP during that fateful few days :eek:

Luckily some of us managed to find a way around this lunacy, but overall the Bank lost a 'packet'

Generali

purch wrote: »

:rotfl:

I think I probably worked for the only major Bank that didn't follow Soros in 1992.

Our Head of World Wide FX 'decreed' that Soros would lose, and no trader was allowed (officially) to be short of GBP during that fateful few days :eek:

Luckily some of us managed to find a way around this lunacy, but overall the Bank lost a 'packet'

You could even make money by buying DEM travellers cheques!

morg_monster

oh !!!!!! our honeymoon is just getting more and more expensive by the day :-( not to america, east africa but everything bar the flights is priced in dollars and we've only put down deposits so far. oh well I'm sure I won't care when I'm on the beach in zanzibar with a cocktail in one hand and a wedding ring on the other...

Generali

Congrats morg_monster.

WTF?_2

JasonLVC wrote: »

Soros is the guy who makes billions from currencies. He is hardly going to tell people to copy him (and sell sterling) as he only makes money when he acts the opposite of what the majority are doing.

The Pound is taking a beating at present, it dips each time BoE drops interest rates or Gordon Brown opens his gob - but then it makes a gentle recovery thereafter.

I suspect the Eurozone is getting itself deeper into a recession and has been slow (so far) to act against it (a bit like the UK last year). At some point very soon, the ECB is going to have to drop interest rates again and when it does, the value of the Euro will drop markedly.

Back to Soros. If he tells everyone to sell Sterling NOW then he can buy it up tomorrow at a greatly devalued price (and the Pound is already under-valued). When the Euro takes a dive sometime in Spring, everyone will be rushing to buy Sterling again, Pound will go up against the Euro and Soros will have most of the money as he bought it from the pancked people he panicked earlier - at a bargain basement price.

It's a bit like those "How to make a million" books, why would anyone want to give their secret away and then face competition. Same with Soros, he's giving everyone a red herring here I think.

I'm thinking of moving some cash into the Euro after it crashes, IMO it is way overvalued and I can't understand how it has got away for so long without taking a beating.

I still think Sterling is the currency with the worst long term outlook. The US is in a horrendous situation on the face of it but could recover if they leverage their resources properly (plus it is global reserve and petro currency), if the Euro survives it has the strength of a huge and diverse economic bloc behind it - but there is very little going for the pound.

The UK economy is going to absolutely tank with retail and financial services being decimated. We currently import energy and food so a currency crash is going to hit hard and require a very noticeable adjustment to lifestyle for most people.

michaels

DO you think the EUR area will lose any memebers - Eire for example - can the govt afford to bail out the banks? If not will Germany really be happy to in effect support Eire Eur bonds?

WTF?_2

From the Guardian, rumblings of 'Sterling Crisis' in the City:

http://www.guardian.co.uk/business/feedarticle/8291328

"There's a real danger of the decline in sterling becoming a full-blown crisis. The government and the Bank of England have to change their tune on the pound pretty quickly," said Neil MacKinnon, director and chief economist at ECU Group, a hedge fund based in London.

SEA OF DEBT
On Tuesday sterling fell as low as $1.3860 in its biggest one-day slide against the dollar since Britain crashed out of the Exchange Rate Mechanism, a pre-cursor to the euro, in 1992.

The latest wave of selling came a day after Prime Minister Gordon Brown unveiled new plans to shore up banks and gave the Bank of England scope to print money if needed.


Until now King and finance minister Alistair Darling have regularly referred to the benefits to exports from a weak pound.


But a growing number of analysts say this is no longer a viable stance. With the global economy in its most serious slump since the Second World War any competitive advantage for UK goods simply disappears into a void of non-existent demand.


Some say he has to quell speculation that the pound's slide could trigger a crisis of confidence among overseas investors in UK assets -- the last thing King and other policymakers want given the economy's reliance on foreign capital inflows.


"I would say we're close to a sterling crisis," said an analyst at one UK bank who asked not to be named.
He noted that the markets are making their view on the BoE's FX policy stance crystal clear: it has to change. "The market is doing it for him (King). Clearly, what's happened today has nothing to do with UK rate expectations."

Not looking good for "slash rates, borrow hundreds of billions, print money and bail out everything in sight".

However, Brown is likely stubborn enough to continue.

bubblesmoney

michaels wrote: »

DO you think the EUR area will lose any memebers - Eire for example - can the govt afford to bail out the banks? If not will Germany really be happy to in effect support Eire Eur bonds?

isnt it a bit like the uk where england financially supports scotland and wales. england doesnt have free prescriptions or less tuition fees like the other two and many drugs and treatments not available in england for free are available in scotland and wales. same goes for old age care etc. so if uk can remain an union despite these inequalities why cant the EU survive even if there are parts eating into the profits other parts of the EU make.