Where is Pound £ heading?

lvader

It was reported today that Ben Bernanke has the best record in the history of the Fed for keeping inflation under control. So clearly QE per say does not debase currencies.

blinko

lvader wrote: »

It was reported today that Ben Bernanke has the best record in the history of the Fed for keeping inflation under control. So clearly QE per say does not debase currencies.

I'm not sure on that, the only way for QE not to devalue a currency would be if the measure of economic output increased but in most cases this is rare and even if GDP does increase then most currencies simply remain at there current value....

Although we could always argue that a QE reduction is now priced into the market

sabretoothtigger

Inflation is the expansion of the monetary base divided by the GDP so he has certainly inflated the dollar
. If governments choose to hold that money as bonds not spend it then retail prices wont rise so much but its not magicked away and he is not a success except as a confidence man - mission accomplished there

He is the only QE FED chairman so there is no comparison and overall the Fed is a failure, since they existed and at an ever increasing rate the dollar is reducing to zero

lvader

sabretoothtigger wrote: »

Inflation is the expansion of the monetary base divided by the GDP so he has certainly inflated the dollar

Says who? That doesn't even make sense as a calculation and doesn't take into account the increase in cost of goods and services which is what inflation is really about.

sabretoothtigger

I do as of 3pm. It'd make more sense then just monitoring prices which obviously dont include all the possible uses for money especially when dollars are used globally so how can Ben B tell the price inflation in Africa or South AMerica. Simply put he doesnt care what the effects are

Though I'd like to hear someone more credible then me say so or write but the Arab Revolution is partly a reaction to Federal Reserve policy effects and so it will continue

Every action has an equal and opposite reaction and you can bet someday Fed will suffer in proportion

lvader

The difference is that in this case the extra money supply isn't reaching the parts of the economy that can cause price inflation. Banks have a lot more capital but they can't lend it out because of the new rules. Large companies are hording cash because it is stuck in tax havens. All this extra money is actually sat doing nothing.

jabba42

I keep GBP, mainly EUR, USD, small amounts of chf and czk because I live in cz.

You should really keep the currency in the country you intend living in as currency risk is also something that keeps me awake at night

As for the pound they say Carney will keep it down but interest rates may force his hand. If it gets to 1.26 again I am buying euros. If it goes down to 1.05 versus the euro I am stuck with them

Brassedoff

sebastianj wrote: »

I thought Euro was going down the pan and $ will follow it but now £ is almost equal to Euro, where will this stop. We do not have oil nor manufacturing industry, on top of every thing we have dodgy Banking.

If only we could get the investment Banking integrity back, then we can manage World monies and perhaps live off the commission. Any one with any views?
sebastian

I really don't think the future will be that bright. We have three major problems that are looming like an iceberg ahead. No one in power is prepared, nay, able to do the right thing I read an article way back in 2007 that pretty much put reasonable timings on what I knew would happen.

The three I see as major issues unless HMG takes two specific sets of action.

1. Sterling has been printed that much it's gone from those days of flying into Jamaica at Xmas 2007 and getting $2.52 = £1.00, grand rates. These can only get worse unless the BOE quietly starts to pull the money supply back in. The banks will not let them, so who or where can they get it?
2. Our GDP is 1/5th of our borrowing, that's the same as Japan and they are still in a 20 year recession.
3. Our welfare/NHS is simply so large, no politician will ever get to grips with it under the current system of Government. It totals 67% of GDP!

How can we cure it?
1. [STRIKE]Manufacture[/STRIKE] and export our way out?
Sorry, we only have manufacturing capacity that's less than 14% of our GDP, unlike Germany who has 47%.
2. Lopp off our state Pensions, NHS, Welfare State, raise taxes 5p in the £1.
If we did that, the lefts angry cry, general strikes, action, protests.... Would see the Government of the day kicked out in favour of one who would promise to return everything back to the status quo ante.

The other way could pay it off over a period on 10 years. Allow nationionwide "nationalised" exploration of fracking. Northumbria has 1/10 of the gas and oil reserves to make the UK self sufficient for 50 years!!!! Do it nationwide and we have the position they have in the USA. Complete and total self sufficiency in energy for the next 150 years based on the exploration of their current wells, those wells are 1/60th of what they have found so far. They were aiming to import oil and gas by 2015. Now by 2015 they will be exporting it. Household energy bills have been cut by 80%.

It's exsimated that if the UK were in production of the current finds, 10% of the national debt could be paid off each year. (And we have not counted the Falklands where the finds are being kept under wraps until we can park one of those two new carriers down there).

So I ask you. Which solution would you take. Allow the green lobby their way and we will be back to 1930's living and conditions, or move them aside and get fracking ASAP!

Interesting read here

John1993_2

Brassedoff wrote: »

1. Sterling has been printed that much it's gone from those days of flying into Jamaica at Xmas 2007 and getting $2.52 = £1.00

Christmas 2007 the USD was at about $2.10 to the pound. I stopped reading at that point, as there's not much point, if someone's going to make up figures to suit their argument.

Even $2.10 was a brief high-water mark for the pound, it was at $1.40 only a few years earlier.

Glen_Clark

Brassedoff wrote: »

Sterling has been printed that much it's gone from those days of flying into Jamaica at Xmas 2007 and getting $2.52 = £1.00

John1993 wrote: »

Christmas 2007 the USD was at about $1.20 to the pound. I stopped reading at that point, as there's not much point, if someone's going to make up figures to suit their argument.

I didn't know Jamaica was in the USA - have they moved it