Now you may have a poor image of the forex market. But you have to respect its lack of sentiment. If you start printing money, and generally piss on the economy, the speculators (and the serious dealers too) will dump your currency like last night's bad curry. You don't have to like the markets to recognise they are always right. Seriously.
OK, so let's cut to the chase. This is what the pound looks like against the dollar. Down means the pound is falling relative to the dollar.
Those brave enough might like to click for a larger view.
Now on the face of it, this is quite a strange outcome. I mean, what with the USA being the home of subprime and all that, why is it our currency that's f*cked and not theirs? Well, right now folks want out of equities and pretty well every other damned thing, and want to hold cash. And the cash they want to hold is the good old greenback. So its price is high.
But hold on. That's not the whole story, and not enough of an excuse for Gordon. Look at how the pound is doing against the euro. Up, in this case, means the euro is doing well and the pound is doing badly.
And as you can see, the pound is pants against the euro.
When your government tells you they are doing what it takes, be afraid. Be very afraid.
26 comments:
This makes me very twitchy indeed, having just sent one crap currency offshore in exchange for what has now become another crap currency. Funny thing is, I got out of dollars a while back when that was looking really shite. Swings and roundabouts with these things all the time and I can't help but think that in times like these there are only two places to be - property and gold. Though D would tell you arms and ammunition. Sigh.
That picture of money being flushed down the loo brings the message home more effectively than the charts for me! It really is rather worrying...my hard hat is on standby.
av - well we have opened a bullion account ... Draw the line at arms and ammo, though I see the point, sadly.
karen - indeed, just don't flush. On a related theme, there is this loo shop in Paris. They have loo rolls that look like money-on-a-roll. Also an image of barbed wire on the loo paper. Surreal.
I did hear forecasts that the pound wil strengthen against the euro next year if that's any consolation.
And you can buy clear perspex loo seats with barbed wire embedded in them if you're after that sort of thing.
So now's the time to buy a truckload of cheap sterling and then wait for it to rise and sell it for dollars then buy euros when the time is right...
....yes, there are people making fortunes out of our misfortunes.
It is a consolation lulu. Thank you. Now let it be so. (And I hasten to say it is not the barbed wire I am talking about!!)
dumdad - you're a bleeding natural.
Keep buying gold folks . . helps the Aussie economy . . nice cheap time to travel to Australia, our dollar's worth nuthin'!
baino - happy to. Now, can you make me an attractive offer?
God, I'm so glad I came over. What a depressing image. Thanks so much for that. (off in an evasive panic)
Well, my money is safely sitting in Iceland.
What?
You mean there's a problem with that plan??
Well, we still have some pounds (sadly diminished in the 6 years since we left the UK) and as the rand collapsed to over R15 to the pound the other week we decided to take advantage. We have just had the most FANTASTIC three night weekend at Cathedral Peak in the Northern Drakensberg for under three hundred quid :-) I notice the rand has strengthened slightly as of today - but we got in there in time!!
oh dear milla, sorry!
mud - frozen assets, ha ha
jeannie - better timing than I ever managed, seriously
I agree with a lot of your piece, but have a read of the following:
http://news.bbc.co.uk/2/hi/uk_news/magazine/7733794.stm
or
http://www.guardian.co.uk/business/2008/nov/18/recession-economy-uk-analysis
and
http://www.guardian.co.uk/business/2008/nov/17/pound-sterling
The last one doesn't help...but food for thought.
Thanks for those nota bene - interesting. They do highlight, though, don't they, that one opinion can be justified almost as easily as another. That's why I like to look at how currency pairs perform. As I said, traders aren't sentimental, and the prices tend to tell quite an important story.
you wrote:
"why is it our currency that's f*cked and not theirs?"
I've understood the us dollar has been f*cked for years....
I could use some gold or property....
mouse, yes you could be right. The primary problem may be that there are far too many dollars.
The greenback's value is held up, though, by the trillions that the Chinese hold (and which are therefore removed from the money supply). If they ever choose to dump these, then I think the dollar's value really will plunge.
I wondered what this falling pound business was all about. Mum kept talking about it to Uncle Hugh and I just thought that perhaps someone would catch it before it hit the ground. I think mum's got stuff in pounds and yet she spends euros, so I guess that's not a good thing at the moment.
Dear Henry, thank you for your deeply strange comments. Is Hugh really an uncle or simply someone that your mum is inappropriately friendly with?
However, back to the point, I'm pleased to tell you that the government is indeed printing money, even as I write. And that's why the pound is shite. However, that's always been the favourite way for governments to clear their debts.
And hey, it's pain free apart from the fact that any money your mum has will halve in value and then halve again. But we'll all have plenty of it, just like they do in Zimbabwe.
Come and see me sometime. We have dogs too, and I'm sure they'll be pleased to show you all their favourite pissing places. These include, but are not limited to, the piles of pound notes that I have artistically dotted around the property.
Woof woof.
What's 'inappropriate' mean? No, Uncle Hugh isn't my real Uncle, but mum is REALLY friendly with him. She'll be pleased it's going to be like Zimbabwe, then she'll be one of them millionaires won't she? In fact she might even become a billionaire - she's always wanted to be one of those. Your place sounds great:)
Hmmm. It makes you wonder where it's all going to end...
Self-sufficient subsistent farming, here I come...
quite so claire, and you'd only have to go back a hundred years or so to be in such a world
Award for you at mine!
(unless you still disagree with such fripperies...)
Ernest I've been missing from blogland for a while and glad now to be back and reading stuff like this - even if I swing wildly between understanding it, caring about it and not giving a toss.
My other half is English who has never been more excited than these past few weeks as Ireland's whole economy goes down the toilet in search of the eighties. Not because it's Ireland's economy(UK's isn't far behind) rather because he gets really excited about bank share prices, forex rates etc. etc. and there's nothing quite so gripping as all this economic news of late.
On a personal level, mind you, he's doing quite well - he's employed here by a UK company, gets paid in Euro and does well at the moment on various sterling commitments he has.
I am rabbitting on - but, despite several female commentators to this post, I am always intrigued by the male/female difference on subjects for discussion.
If the tone of this comment is off-hand, it's not meant to be at all. Just interested : )
sjw - hi there and I did notice that you were absent. Glad you are back. Offhand? Not at all. And I do think that there are some very interesting gender differences in blogoland ... with males heavily outnumbered as far as I can see. Content analysis, well I haven't really got that far, but it would repay the effort.
I say just keep pickin those mushrooms.
... and eating them, very important.
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