Osborne v Brown

[KeithD]

So Osborne has said Brown's policy will cripple the £...........he already has.....US holidays will now cost 30% more,and it's still dropping, and won't be long before £:€ is 1:1

[andypaul]

We are all doomed.

Think im gonna go off and work in asia.

Last one to leave turn the engery efficent lights off please.

[walesrob]

So Osborne has said Brown's policy will cripple the £...........he already has.....US holidays will now cost 30% more,and it's still dropping, and won't be long before £:€ is 1:1

..and whats even more surprising is that Brown is blaming the messenger and not dealing with the message. So, lets get this right, because Osbourne says the pound is in freefall, just mentioning it in public will make it worse? At the end of the day, the job of the Opposition is to scrutinize and check what the Government is doing, so Osbourne was only doing what he was paid to do. If we all fell in line and agreed that Brown is doing a wonderful job, then we may as well abolish all political parties and make Brother Brown Prime Minister for life. Keep on talking Osbourne, your doing a great job. I'm no expert at money, but surely if I was £50K in debt and then borrow £100K more in the hope things will get better, not knowing if my job is safe, would that be seen as reckless at least, and stupid at worst. This is what Brown wants. Taxes will have to go up to pay for this. Simple.

[DaveyWallis]

What I cannot understand, and somebody please explain it to me if you know, is that I have read that the strength of a country's currency relates to the interest rates upon which you would get your return if you invested your money there, and that country's economic outlook.

So in the States where the credit crunch and recession has hit harder and deeper than in the UK the dollar is doing really well against sterling, yet their interest rate is a mere 1% compared to our 3%. Similarly the European Central Bank has a 3.25% rate with various eurozone countries in recession - but the pound is weak against the euro, and was whilst our rate was higher than the ECB. Sterling has also fallen badly against the Yen, even though the interest rate in Japan is 0.3%.

So the £ is falling whilst the factors that usually govern the exchange rates indicate that it should be rising.

At the same time Brown is putting himself forward as the man to save the world economy.

Have I missed something??????

Andy

[baboyako]

What I cannot understand, and somebody please explain it to me if you know, is that I have read that the strength of a country's currency relates to the interest rates upon which you would get your return if you invested your money there, and that country's economic outlook.

correct

So in the States where the credit crunch and recession has hit harder and deeper than in the UK

The UK is(was) the only country predicted by the IMF to go into recession. It has higher debt levels than the US so house price falls have a bigger impact. US is a big economy and has lots of exports and people work hard there

the dollar is doing really well against sterling, yet their interest rate is a mere 1% compared to our 3%.

But we were 5% before. If we go to lower than euro, everyone will invest there.

Similarly the European Central Bank has a 3.25% rate with various eurozone countries in recession - but the pound is weak against the euro, and was whilst our rate was higher than the ECB.

euro 3.25%, pound 3.00% no brainer!!!

Sterling has also fallen badly against the Yen, even though the interest rate in Japan is 0.3%.

pound basically becomes like the yen, i.e. a borrowing currency rather than an investing currency.

So the £ is falling whilst the factors that usually govern the exchange rates indicate that it should be rising.

To defend the currency the interest rates need to rise (iceland has 18% interest rates) these are tough measures but they work.

At the same time Brown is putting himself forward as the man to save the world economy.

He is setting things up to join the euro as 1:1 (within months)

Have I missed something??????

Andy

The last boat out??

[KeithD]

Because our interest rates have dropped big styles, London stock exchange is massively down, and more importantly, the PM is borrowing way beyond his means, nobody outside of the UK is dealing with ££££'s, so the loss of interest causes it to fall.....so when Brown tries to blame someone else!!!!

[andypaul]

As well as intrest rates and what not simply people from those money dealers from abroad who work in London say that sterling is dead kaput. Simple supply and demand sterling is very out of favour and has huge doubts over it existing as either a force or even at all.
Britain had one last hooray on borrowed money. I have been scracthing my head how Britain could be the 5th largest ecomony in the world when we produce so little. For years now. People all belived a lie. Japan, Germany,China and the US are huge exporters we are not.

Now the big money earner (apart from Education) the city is fately wounded it has to plument unless someone PM or treasury performs a masterstroke. Neither the reds or the blues have anyone capable of such a task unless by accident.


The sooner we merge into the eurozone the better it seems. No one will want large/medium or small quanities of a Currency which possibly will not exist in five years time.

As well as intrest rates. Just like us savers we also look for safety, stability and whats best for them.

Americas currecny due to its a world power and the obama affect is working. China and other cash rich countries need the Us to keep buying its goods and to keep the currency in a good condtion due to all the US treasury bonds they have. Otherwise they lose silly amounts of money and their biggest customer. If China stopped exporting on the scale it does currently. It would cause a huge downturn and possibly result in major unrest in the country.
As well as China many other countries need the US power politicaly or even military wise. Saudi arabia and neighbours also need the largest consumer of oil (also oil is traded in dollars) in a good condtion.

[KeithD]

Get rid of the pound and convert to the Zimbabwe Dollar.....then we'll all be millionaires overnight.........financial problem solved!

[andypaul]

Get rid of the pound and convert to the Zimbabwe Dollar.....then we'll all be millionaires overnight.........financial problem solved!

Millionaires more like billion or trillionaires