What the Hell is Going On With the Pound?

I'm wondering if someone more attuned to current world/British economics can help me understand why the British pound has sunk to such a low!?

It's causing me some concern, Not because it's so weak but because it's so weak compared to the dollar and euro. We're all going through this economic recession, and if ATS is to be used as any kind of marker, the situation in America is at least as bad as here in Britain.

For those who don't know, a pound today buys $1.45 or €1.25. A matter of just two years ago, it was closer to $1.80 or €1.50. This is a huge drop. And what's perplexing me more than anything is why no-one seems to be talking about it.

I have my theories:- This is carefully designed to force us - by economic necessity - into the euro. So the strength of the euro I understand - it is vital for the interests of Globalism and one-world government. But the strength of the dollar (in relation to the pound) I just don't get. I was sure both countries (UK and the US) were destined for the same rough-ride.

reply to post by Cythraul


According to XE.com a pound is only buying 1.15 euros! We buy a lot of our business materials in the UK and sell on here in Spain so it's working in our favour.

However, my parents are coming over to visit at Christmas and have totally ignored me about buying their euros, weeks ago. It's going to seriously affect the tourism here (Malaga area) because usually Brits came here for holidays and their pounds went a long way. Lots of restaurants and bars are empty and usually, at this time of year, they're full of the people that come south for winter. Our business doesn't rely directly on tourism but it will definitely have a knock on effect because no-one will have any money to spend.

Maybe they're trying to push the Brits into joining the euro?

Be happy the pound is sinking a little. It will increase your exports. It is a good thing for jobs in England.

Two reasons.

1. Interest rates...

The BOE rate is perpetually lower than the ECB rate, which makes it better for institutional investors to buy into Euros rather than Pounds.

The BOE rate has just been cut a few minutes ago to 2%. This will destroy the pound by the end of the day.

It may not be quite as bad as Black Wednesday in that it has occurred over a longer period of time, but the pound is at the lowest level against the euro in recorded history.

2. Economic stability.

Investors see Europe as more stable and more economically competitive in the future.

Thanks to good old Gordon from Fife, the UK is no longer a competitive trading environment. Taxes are too high, the regulation is too tight and the infrastructure isn't what it used to be. The only reason businesses stayed in London was because of its reputation for super-human stability. No bank had ever been run on; no major bank had gone bust (apart from Barings bank) and the political climate was also more stable.

All that has gone.

Hence the Pound will suffer an inexorable decline against all major currencies, especially the Euro. Its going to be a dark day for Britain and the Pound. Conspiracy theorists may well point out that this is all a clever ruse to get the British public to ditch the Pound in favour of the Euro.

Thanks for the replies. Quite insightful - particularly yours 44soulslayer. Still, I don't quite understand why the US dollar isn't plummeting alongside the pound. Is our government really that inept that we're just not managing the crisis as well as our cousins across the Atlantic? Or do you see this as deliberate - to help exports and warm us to the euro?

there was a report the last few days, saying the UK is now seriously considering the euro

[edit on 4-12-2008 by warrenb]

Yes, I heard talk about that recently. The moment the pound dropped, my first thought was that this can only lead to adoption of the euro. The Globalists were always going to strike at some point, causing something to nudge us towards the euro. It's sickening. If I didn't believe in the 'new world order' before, I sure as hell do now. As far as they're concerned, nobody is allowed to say 'no'. Look at Ireland and the Lisbon treaty. And if a nation says 'no', they'll find a way to do precisely what they want anyway.

reply to post by Cythraul


Im not sure, but I would guess that the dollar is strengthening because American investors are pulling their own money out of shares and holding cash (thereby strengthening the dollar).

I think its only temporary though... there's no way that 1.48 to the sterling is a fair value for the dollar. Im sure it will fall!

reply to post by 44soulslayer

there's no way that 1.48 to the sterling is a fair value for the dollar. Im sure it will fall!

You've got to be kidding. The Fed has been printing / handing out trillions.

The dollar is on the verge of oblivion.

Mind you, I don't expect any currency is anywhere near 'safe' bearing in mind the prevailing economic conditions. Even the Euro could tank.

Originally posted by pause4thought
Mind you, I don't expect any currency is anywhere near 'safe' bearing in mind the prevailing economic conditions. Even the Euro could tank.

I think the only thing that is truly safe is precious metals. No fiat currency is safe because it is fundamentally worthless.

Thats my opinion anyway...

Originally posted by LiquidMirage
I think the only thing that is truly safe is precious metals. No fiat currency is safe because it is fundamentally worthless.

Thats my opinion anyway...

And I agree with it. The major Western currencies are doomed - except maybe the euro due to its use in furthering the world currency. Anyone can see this. What's surprising to me is that we're not all sinking at roughly the same rate. This volatility just makes me put more faith in precious metals and tangeable assets. It should be clear to us all by now that IOU notes don't make honest currency.

One reason: Rothschild stooge Peter Mandelson.

'Lord Mandelson was at the centre of a row last night over 'secret' plans to ditch the pound after an explosive claim that Britain is ready to join the euro. The European Commission president said the UK was 'closer than ever before' to signing up to the single currency. Jose Manuel Barroso said he had held private conversations with 'the people who count in Britain' and knew that they were ready to move into the euro-zone.'

The economic crisis and adopting the Euro is all part of the same plan for a centralised World banking system.

ABSOLUTE PROOF that the "Economic Crisis" was Engineered

www.dailypaul.com...

www.dailymail.co.uk... l

Originally posted by Cythraul
I'm wondering if someone more attuned to current world/British economics can help me understand why the British pound has sunk to such a low!?

It's causing me some concern, Not because it's so weak but because it's so weak compared to the dollar and euro. We're all going through this economic recession, and if ATS is to be used as any kind of marker, the situation in America is at least as bad as here in Britain.

For those who don't know, a pound today buys $1.45 or €1.25. A matter of just two years ago, it was closer to $1.80 or €1.50. This is a huge drop. And what's perplexing me more than anything is why no-one seems to be talking about it.

I have my theories:- This is carefully designed to force us - by economic necessity - into the euro. So the strength of the euro I understand - it is vital for the interests of Globalism and one-world government. But the strength of the dollar (in relation to the pound) I just don't get. I was sure both countries (UK and the US) were destined for the same rough-ride.

I think that Brown who managed to shut up a very divided Labour Party with Tony Blair, when Blair said 'trust me' and Brown made up five rules. I am not saying the Tories were anything but divided at the time. Brown was a Europhile, but has recently taken steps to the old guard and is a position to lead them on this now. The aim is to win the election, we cannot go in with the pound as low as this, and the Tories need some kind of drug to fix the electorate. I suspect the Euro will figure in the next election.

I can tell you exactly why.

The UK has just as many or more banks that failed than the US.

RBS one of the biggest banks in the UK, heck even here in the US they own a lot of banks was just bail out by your government. Now they own 60% I believe.

Many banks in Europe and the UK were following the lending protocol the US was, not as long but long enough.

Originally posted by Jim Scott
Be happy the pound is sinking a little. It will increase your exports. It is a good thing for jobs in England.

Exports to where, exactly? Unless they can undercut China's prices they can't sell much.

The US $ and yen are gaining because investors see them as safe havens.

www.marketwatch.com...