Where is Pound £ heading?

Glen_Clark

Brassedoff wrote: »

2. Our GDP is 1/5th of our borrowing,

I suspect its even worse than that, because so much borrowing is off balance sheet - like PFI

Brassedoff wrote: »

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!

Basic levels of Benefits are about the lowest in Europe. Housing Benefit is the only thing that makes UK benefits so high, and that is a reflection of housing costs which Osborne is pumping up with his Help to Bubble house price scam.

You ignore Britain's military spending, which is the highest in Europe.
If we were only defending Britain it should be amongst the lowest because we enjoy the huge defensive advantage of being surrounded by water - it was enough to stop Hitler!
On the one hand Cameron is castigating Starbucks for not paying tax, whilst on the other bankrupting us with military spending to maintain foreign tax havens like Gibraltar.
(Makes you wonder how much money his supporters have got stashed away in them)

sabretoothtigger

Banks have a lot more capital

That is the really basic flaw. They cant just invent value, the banks have received cash which is ultimately of lower value then previous to the QE.

I can buy a house with a diamond, I could swap it for some cars maybe or I can pay with millions of peanuts.

Are we rating the house price in peanuts as worth more because the price goes up as the items exchanged for it go lower in worth


The banks have more it appears because others have less, because the cash is less and the banks obligations are in cash owed

John1993_2

Glen_Clark wrote: »

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

No, but the poster to whom I was respondng used "$", the symbol for the USD, which is, of course, widely accepted in Jamaica.

Nick_C

Isn't the exchange rate for Sterling low because we have incredibly low interest rates?

The big boys buy and sell currencies as if they were buying and selling shares. Low interest rates = low returns = low demand.

And surely a low value pound is good for Britain. Cheaper exports, dearer imports, make us more competetive.

zerog

Nick_C wrote: »

Isn't the exchange rate for Sterling low because we have incredibly low interest rates?.

Euro and US also have low interest rates, but people are talking about gbp vs eur and usd.

blinko

Nick_C wrote: »

Isn't the exchange rate for Sterling low because we have incredibly low interest rates?

The big boys buy and sell currencies as if they were buying and selling shares. Low interest rates = low returns = low demand.

And surely a low value pound is good for Britain. Cheaper exports, dearer imports, make us more competetive.

low value £ also pushes up the cost of purchasing. The above scenario assumes that we are producing and exporting enough to take advantage of the low currency

lvader

Yet the pound is at or close to 12 month highs against many other currencies.

Glen_Clark

lvader wrote: »

Yet the pound is at or close to 12 month highs against many other currencies.

currently 1.16 Euros to the pound.
You could select any two points to show the pound as up or down to suit your argument.
But to be unbiased I would suggest comparing the two from the date when the Euro was introduced - at 1.40 Euros to the pound.
Yet, despite the Euro faring 17% better than the pound, some people in England deride the Euro as a Basket Case.

lvader

There is more to world currencies than the Euro which has been one of the strongest this year. Compared to the USD the current rate is about average for the last 30 years or so.

sabretoothtigger

Seemingly sterling is topping out now which times in with FED tapering.

Of course the real dynamic is fed is as screwed as we are but expecting some pullback for now

Sterling Index At 1500 GMT

(JAN 2005=100) INDEX GBP/USD EUR/GBP
 PREVIOUS CLOSE 81.9 1.5688 0.8526
 OPEN 81.7 1.5616 0.8540
 10 AM 81.5 1.5588 0.8567
 NOON 81.6 1.5574 0.8548
 2 PM 81.6 1.5601 0.8552
 4 PM 81.4 1.5573 0.8570

 August 22, 2013 11:01 ET (15:01 GMT)