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THE DEATH OF THE POUND IS IMMINENT

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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Londonrake » Thu Aug 31, 2017 9:40 am

A point - well a couple actually :D - I was trying to make was that although Brexit was the trigger for current Sterling volatility it was crystal clear that the currency wasn't set to go floating happily along at a rate of €1.30, even had the vote been to stay.

Currencies move in response to all sorts of events and perceptions. To blame the current €/£ strength on Brexit is a failure to understand that. The Euro has gained against all major currencies. For example, at the beginning of this year it sat at $1.03, today it's $1.19. That's got nothing to do with Brexit.

It's a moot point now of course but Sterling was significantly overvalued prior to June 2015. It was almost certainly heading for a significant correction:

"In February, the International Monetary Fund said the sterling was overvalued by somewhere between 5% and 15% in 2015. Just before the referendum, the IMF put the over-valuation slightly higher, saying that sterling was overvalued by between 5% and 20% in 2015. Other experts, like the former governor of the Bank of England and the IMF, have agreed that sterling was overvalued."

https://fullfact.org/economy/exchange-rates-and-imf/

Indications are that the Euro is considered to be overvalued now and that the ECB will move in some way to weaken it.

Despite the "Told you so!" "Little Englander" temptation - the weeping 'n' wailing that's being posted regularly about Sterling across Forums isn't by any means wholly a result of Brexit.

.
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby CBBB » Thu Aug 31, 2017 11:44 am

Londonrake wrote:Despite the "Told you so!" "Little Englander" temptation - the weeping 'n' wailing that's being posted regularly about Sterling across Forums isn't by any means wholly a result of Brexit.

.

But it didn't help!
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Pyrpolizer » Thu Aug 31, 2017 12:32 pm

Londonrake wrote:A point - well a couple actually :D - I was trying to make was that although Brexit was the trigger for current Sterling volatility it was crystal clear that the currency wasn't set to go floating happily along at a rate of €1.30, even had the vote been to stay.

Currencies move in response to all sorts of events and perceptions. To blame the current €/£ strength on Brexit is a failure to understand that. The Euro has gained against all major currencies. For example, at the beginning of this year it sat at $1.03, today it's $1.19. That's got nothing to do with Brexit.

It's a moot point now of course but Sterling was significantly overvalued prior to June 2015. It was almost certainly heading for a significant correction:

"In February, the International Monetary Fund said the sterling was overvalued by somewhere between 5% and 15% in 2015. Just before the referendum, the IMF put the over-valuation slightly higher, saying that sterling was overvalued by between 5% and 20% in 2015. Other experts, like the former governor of the Bank of England and the IMF, have agreed that sterling was overvalued."

https://fullfact.org/economy/exchange-rates-and-imf/

Indications are that the Euro is considered to be overvalued now and that the ECB will move in some way to weaken it.

Despite the "Told you so!" "Little Englander" temptation - the weeping 'n' wailing that's being posted regularly about Sterling across Forums isn't by any means wholly a result of Brexit.

.


So what was it's price back then? About 1.3 to the Euro?
From 1.3 to 1.1 today that's well above the mid over-valued price
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Londonrake » Thu Aug 31, 2017 12:38 pm

CBBB wrote:
Londonrake wrote:Despite the "Told you so!" "Little Englander" temptation - the weeping 'n' wailing that's being posted regularly about Sterling across Forums isn't by any means wholly a result of Brexit.

.

But it didn't help!


Of course not - as I said. However, for nearly 15 months, every time there's been even a small drop in Sterling you can get a flurry of anti-Brexit posts. It's not the only factor that's in play though.

Moreover, if people can be bothered to look into the situation back in mid 2015 the £ was set to go down anyway.
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Pyrpolizer » Thu Aug 31, 2017 12:40 pm

Robin Hood wrote:
Milti:
Mate, Sterling is in for a rough time over the next year or so all thanks to the .........


In my eyes .... currency speculators, although you never said a truer word! But it won’t be just Sterling ...... they could/will all collapse.

The USD has value because in a master stroke when the US offered to make the Saudi King rich beyond his wildest dreams if he sold oil ONLY in USD, they created the Petro-dollar. Everyone needed the USD to buy energy as the ME was at the time the main supplier. As other sources were developed, most often by US companies, the Petrodollar was the only way it could be purchased. Anything bought by the US was also purchased in USD as the recipient country needed USD to buy its energy. That condition was perpetuated by all other oil producers. This means the American Dream was based on buying resources and products with IOU’s backed by nothing other than a promise of ‘Trust me!’! Effectively they got it all for free! :shock:




The petrodollar issue as you describe it is of course true, but to correct it a bit the Americans do spend a lot in war machines to "protect" the oil producing countries in the Gulf (remember the war to save Kuwait from Iraq's invasion) plus so many other wars they got themselves into with various excuses all hidden behind the true reason of oil.
There has not been even one American President who hasn't started a new war so far. This Trump luny might even start a nuclear one. :shock:
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Robin Hood » Sat Sep 02, 2017 5:04 pm

Milti:

Would you consider this to be confirmation that most probably the currency speculators and the real economy are singing from different song sheets? Doom and gloom from The Currency Market and the report of a trade surplus, record low unemployment and now this, seems the UK is not doing so badly after all? What is there to be gloomy about?

The speculators must have got the latest news before they quit for the weekend ..... it rose from 1.0864 to 1.09256 in just two hours on Friday (10-1200 hrs) and levelled off at 1.0921, for the next 48 hrs. :wink:

British manufacturing defies Brexit doom by posting one of the biggest growth results in three years in 'clear sign confidence is returning'

http://www.dailymail.co.uk/news/article-4846208/British-manufacturing-defies-Brexit-doom.html


OK .... so it is from the Daily Mail so it could be an exaggeration! :D
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby miltiades » Sat Sep 02, 2017 6:52 pm

If the ...news are so good one wonders why the ...speculators
Haven't reacted as the did following the Btexit results.
By the way, nothing will please me more than to see sterling make a recovery.
The future , as far as I can see, does not look rosy. Time will tell.
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Robin Hood » Sat Sep 02, 2017 7:16 pm

miltiades wrote:If the ...news are so good one wonders why the ...speculators
Haven't reacted as the did following the Btexit results.
By the way, nothing will please me more than to see sterling make a recovery.
The future , as far as I can see, does not look rosy. Time will tell.


Because this sort of news shows them up for what they are ........ useless thieves on the fringe of society that have nothing to contribute! I would bet it really pissed them off to make even that small adjustment, but they still made a profit for themselves and their paymasters! :x
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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Londonrake » Sat Sep 02, 2017 9:00 pm

Robin Hood wrote:OK .... so it is from the Daily Mail so it could be an exaggeration! :D


From one of the leading Project Fear protagonists. We are all doomed! From day one - apparently.

http://www.cbi.org.uk/news/manufacturer ... ut-growth/

:roll:

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Re: THE DEATH OF THE POUND IS IMMINENT

Postby Pyrpolizer » Sun Sep 03, 2017 4:12 pm

Robin Hood wrote:Milti:

Would you consider this to be confirmation that most probably the currency speculators and the real economy are singing from different song sheets? Doom and gloom from The Currency Market and the report of a trade surplus, record low unemployment and now this, seems the UK is not doing so badly after all? What is there to be gloomy about?

The speculators must have got the latest news before they quit for the weekend ..... it rose from 1.0864 to 1.09256 in just two hours on Friday (10-1200 hrs) and levelled off at 1.0921, for the next 48 hrs. :wink:

British manufacturing defies Brexit doom by posting one of the biggest growth results in three years in 'clear sign confidence is returning'

http://www.dailymail.co.uk/news/article-4846208/British-manufacturing-defies-Brexit-doom.html


OK .... so it is from the Daily Mail so it could be an exaggeration! :D


You should thank the speculators then :wink:
From the same article:

The pound has fallen by 13 per cent against a basket of currencies since the Brexit vote, which has proved a boost for manufacturers as it makes UK goods more attractive to overseas buyers.

And don't forget the UK is still a member of the EU with full rights and no burdens for it's exports.
Do you think the same boom will occur after it exits?
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