Posted on 12/01/2008 2:09:15 PM PST by SunkenCiv
Sterling has fallen sharply against the dollar as yet more bad economic data points towards a prolonged recession and further interest rate cuts.
The pound was down 5.2 cents to $1.486, its largest one day fall in percentage terms since sterling crashed out of the Exchange Rate Mechanism (ERM) in 1992.
Sharp falls in the FTSE 100 index - down 5.2% on Monday - also served to undermine the currency.
The pound was also down 3.5 cents against the euro, at 0.851 pounds.
The poor economic data increases the likelihood that the Bank of England will cut interest rates on Thursday.
HSBC confirmed on Monday it is cutting 500 jobs across the UK, while carmaker Aston Martin announced it will cut 300 full-time and 300 temporary jobs.
Mortgage approvals also fell in October, according to figures released by the Bank of England, suggesting house prices may fall even further.
(Excerpt) Read more at news.bbc.co.uk ...
Sterling hits 12-year low on gilts sell-off
The Financial Times | 11/11/2008 | Peter Garnham, David Oakley, Chris Giles and Jim Pickard
Posted on 11/11/2008 9:05:39 PM PST by bruinbirdman
http://www.freerepublic.com/focus/f-news/2130558/posts
Gordon Brown risks ‘collapse of sterling’ says George Osborne[UK]
Telegraph | 15 Nov 2008 | Graham Tibbetts
Posted on 11/15/2008 11:04:16 AM PST by BGHater
http://www.freerepublic.com/focus/f-news/2132717/posts
China’s currency falls by record against U.S. dollar(race to the bottom?)
Market Watch | 12/01/08 | Chris Oliver
Posted on 12/01/2008 7:36:11 AM PST by TigerLikesRooster
http://www.freerepublic.com/focus/f-news/2140807/posts
Panic In China Over Jobs, Economy, Cotton
Mish’s | 11/28/08
Posted on 11/29/2008 4:47:35 AM PST by TigerLikesRooster
http://www.freerepublic.com/focus/f-chat/2139945/posts
US’s road to recovery runs through Beijing
Asia Times | 11.15.08 | Francesco Sisci and David P Goldman
Posted on 11/29/2008 8:39:14 AM PST by Dr. Marten
http://www.freerepublic.com/focus/f-news/2140017/posts
Don’t Rush to Declare the U.S. Done (Mild Russian BDS Alert)
The Moscow Times | December 1, 2008 | Alexei Bayer
Posted on 11/30/2008 5:32:08 PM PST by 2ndDivisionVet
http://www.freerepublic.com/focus/f-news/2140581/posts
US$ vs British pound, Jan vs Dec:
2007-12-31 December 31, Monday 0.503956 GBP
2008-01-01 January 01, Tuesday 0.503956 GBP
2008-01-02 January 02, Wednesday 0.504439 GBP
2008-01-03 January 03, Thursday 0.506765 GBP
2008-01-04 January 04, Friday 0.50615 GBP
2008-11-28 November 28, Friday 0.651551 GBP
2008-12-01 December 01, Monday 0.673854 GBP
This parallels the slide in oil prices which started around the same time
This is both funny and disturbing...
When all currencies are fiat currencies, how do you stop the freefall?
I’m thinking global hyperinflation for commodities and essentials, and high value asset deflation - real estate and equities. Food and metals will rise. Automobiles will be a disaster, things like auto parts will sell well.
There will be a return to value as PE ratio and income will be the determinants once again.
What happens when the whole world hyperinflates?
During tough times people will still buy:
food
fuel (but less of it)
shelter but not necessarily high priced real estate
Auto parts but not autos
safes and alarms and security
drugs and alcohol
weapons and ammunition
sweets
bargain priced goods (as evidence by Black Friday)
They will not buy:
cars
vacations
big homes
expensive electronics
fashions
sporting goods
boats, aircraft
Something good to invest in:
Gold
Silver
Non-dollar denominated stocks with good INCOME
Income producing assets
Companies engaged in packaging food for storage
Just my off-the-cuff take.
Anything I missed? :)
2 cheers for socialist competence, here’s to you Obama wannabes! (sarc)
The fact that Gold, Silver, Platinum, Palladium have unfortunately dropped like a rock today. Silver down 10 % just today. Gold dropped 5 % just today. Platinum dropped 10 % just today. Palladium dropped 7.5 % just today. Looks like its going to be guns and butter.
Might be early, but when they are talking about throwing trillions into the craters created by the current meltdown - without spending a dime on job creation or other schemes... and we only entering the woods...
there is nothing else to do but inflate our way out as the Friedmanites would say... except I think the term hyperinflate will end up being more accurate in the long run.
At that point, some year or two down the line, metals and commodities will prove to have been a wise investment.
Once they fire up the printing presses... the money will not go back into real estate, as the credit landscape has changed forever. They will not go into equities - unless there is substantial income - and there will not be any time soon...
Foreign currencies? They are all fiat currencies too nowadays.
The newly printed paper has to go somewhere.
Since there is no gold backed currency of refuge, eventually some value will find its safest haven... precious metals, and the list above.
That is the trillion dollar question. Apmex stopped selling their silver eagles that were 3.50 over spot. Now they have an older one that is 5 to 6 over spot. Crazy stuff. They also stopped selling the gold buffaloes. When the commodities drop fast the retail market drys up because no one wants to sell what they have. The volatility of the market is probably affecting the liquidity of the market. It has been amazing watching the incredible swings up and well mostly down. I am still on the sidelines waiting to jump into silver and maybe some gold. Started looking when it had peaked.
Don’t worry about it. Zimbabwe’s in free fall. There may be some other flyspeck country with something similar (if less severe). No one else. Any country (typically, industrialized country, or major developing country such as India or China) which relies on imported petroleum (pretty much all of ‘em) will see a major turnaround in 2009, because crude has dropped almost 70 per cent of its peak price. There will be noticeable drops in all commodities, other than the panic-money precious metals and such — and those will not hold their value. By the election campaign of 2012, Obama will be taking credit for the boom that is going on at that time, the US gov’t current deficit will be much smaller, tax revenues will be up (with or without a continuation of the Bush tax cuts), and the first of the postwar boom babies will be 65 in 2011, and not worried too much about their Social Security.
Droppin’ dime on me, huh? Apropos, since this is a financial topic...
I was just reading a Financial Times article stating that the dollar would plummet in 2009. I think it is wishful thinking.
Gold is down another 10 to 766. Isn’t this fun?
OPEC Has Already Turned to the Euro...The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.
GoldMoney Alert
February 18, 2004
|
US Imports of Crude oil
|
|||||
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
|
Year
|
Quantity (thousands of barrels)
|
Value (thousands of US dollars)
|
Unit price (US dollars)
|
Average daily US$ per € exchange rate
|
Unit price (euros)
|
|
2001 |
3,471,066
|
74,292,894
|
21.40
|
0.8952
|
23.91
|
|
2002
|
3,418,021
|
77,283,329
|
22.61
|
0.9454
|
23.92
|
|
2003
|
3,673,596
|
99,094,675
|
26.97
|
1.1321
|
23.82
|
We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.
As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence. It is more likely the result of purposeful design, namely, that OPEC is mindful of the dollar's decline and increases the dollar price of its crude oil by an amount that offsets the loss in purchasing power OPEC's members would otherwise incur. In short, OPEC is protecting its purchasing power as the dollar declines.
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
[snip]
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