Comments on: The Governor’s sterling collapse. http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Thu, 09 Feb 2012 20:05:58 +0000 hourly 1 By: Alan http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7993 Alan Tue, 09 Dec 2008 20:16:51 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7993 Well I have supported labour for the past 30 years and I have never been so dismayed at the economic mess and collaspse of £. There needs to be a general election now and the Labour ' poverty trap for UK Plc ' needs to be stopped very soon before its all destroyed. Alan Well I have supported labour for the past 30 years and I have never been so dismayed at the economic mess and collaspse of £.

There needs to be a general election now and the Labour ' poverty trap for UK Plc ' needs to be stopped very soon before its all destroyed.

Alan

]]> By: Chang http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7992 Chang Mon, 08 Dec 2008 18:19:23 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7992 The Treasury are fools to think they can get away with this. Sterling is no longer a major international reserve currency, foreigners will avoid UK gilts like the plague because the UK's golden goose - the city - is seriously ill and laying rotten eggs, the magnet for foreign money is gone. The Treasury will have to print money to fund borrowing and continue to devalue the pound. Anything imported will soar in price and rates will have to rise sharply again to avoid total sterling collapse (and it would certainly be a condition of any IMF bailout). This is a repeat of the early 90's in slow motion, there is no comparison with Japan and their zero rate policy - they were only able to sustain this as they were (and still are) the world's largest creditor nation with vast foreign exchange reserves. Gordon Brown is maxing out his credit card and making a foolish gamble that won't pay off - but he's only trying to buy time till the next election - and condemning the country to an era of relative poverty. The Treasury are fools to think they can get away with this. Sterling is no longer a major international reserve currency, foreigners will avoid UK gilts like the plague because the UK's golden goose – the city – is seriously ill and laying rotten eggs, the magnet for foreign money is gone. The Treasury will have to print money to fund borrowing and continue to devalue the pound. Anything imported will soar in price and rates will have to rise sharply again to avoid total sterling collapse (and it would certainly be a condition of any IMF bailout). This is a repeat of the early 90's in slow motion, there is no comparison with Japan and their zero rate policy – they were only able to sustain this as they were (and still are) the world's largest creditor nation with vast foreign exchange reserves. Gordon Brown is maxing out his credit card and making a foolish gamble that won't pay off – but he's only trying to buy time till the next election – and condemning the country to an era of relative poverty.

]]> By: Robbie http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7991 Robbie Sat, 06 Dec 2008 23:01:01 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7991 I've heard many people talk of the UK joining the Euro recently due to the huge drop in the pound due to Gordon Browns mismanagement of the economy. Can someone please explain to me why we would join the Euro when the fx rate is at an all time low ? How do the British people gain from this ? Reply We wouldn't gain. It is a very bad idea. Unless Labour intend to tear up the promise of a referendum it is not going to happen, as the British people will not vote for it. I've heard many people talk of the UK joining the Euro recently due to the huge drop in the pound due to Gordon Browns mismanagement of the economy. Can someone please explain to me why we would join the Euro when the fx rate is at an all time low ? How do the British people gain from this ?

Reply We wouldn't gain. It is a very bad idea. Unless Labour intend to tear up the promise of a referendum it is not going to happen, as the British people will not vote for it.

]]> By: This Week’s Sunday Round-Up at Cllr Iain Lindley’s Diary http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7990 This Week’s Sunday Round-Up at Cllr Iain Lindley’s Diary Sun, 16 Nov 2008 00:42:14 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7990 [...] John Redwood on Thursday also points out the fall in the value of Sterling [...] [...] John Redwood on Thursday also points out the fall in the value of Sterling [...]

]]> By: Adrian Peirson http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7989 Adrian Peirson Sat, 15 Nov 2008 01:45:20 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7989 Isn't it a bit misleading comparing two fiat currencies when both are falling off a cliff. Why not but Sterling back onto the Gold Standard, it will then have some intrinsic value. Isn't it a bit misleading comparing two fiat currencies when both are falling off a cliff.
Why not but Sterling back onto the Gold Standard, it will then have some intrinsic value.

]]> By: IanVisits http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7988 IanVisits Fri, 14 Nov 2008 12:40:17 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7988 While the decline (or more correctly, a return to the correct level based on Purchasing Parity) of the Sterling to Dollar will hurt some industries, there is one which will do very well out of it. Those small businesses who operate content websites and generally tend to earn the bulk of their income in US Dollars, thanks to that being where most of the online ad agencies being based are blessing the fall in the Sterling rate. The over-valued Sterling rate earlier this year was crippling UK websites - and it is nice to be able to go out on a Friday evening and afford a beer (or three) again. While the decline (or more correctly, a return to the correct level based on Purchasing Parity) of the Sterling to Dollar will hurt some industries, there is one which will do very well out of it.

Those small businesses who operate content websites and generally tend to earn the bulk of their income in US Dollars, thanks to that being where most of the online ad agencies being based are blessing the fall in the Sterling rate.

The over-valued Sterling rate earlier this year was crippling UK websites – and it is nice to be able to go out on a Friday evening and afford a beer (or three) again.

]]> By: Duncan Crow http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7987 Duncan Crow Fri, 14 Nov 2008 03:29:49 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7987 James, I was thinking exactly the same this evening. Brown always blames somebody or something else for his Mickey Mouse economic policies. I can see him blaming a Sterling crisis on us not having joined the Euro. Within the last year the Pound has been 240 Yen. It is now 140 Yen. James, I was thinking exactly the same this evening. Brown always blames somebody or something else for his Mickey Mouse economic policies. I can see him blaming a Sterling crisis on us not having joined the Euro.

Within the last year the Pound has been 240 Yen. It is now 140 Yen.

]]> By: Tony Makara http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7986 Tony Makara Fri, 14 Nov 2008 00:50:19 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7986 Mervyn King and the government were warned time and again that Sterling was vastly overvalued and they did nothing to avoid the scenario of a massive and sudden correction. They were more interested in masking the inflationary pressures building up in demand, which though transparent in the housing market, were not visible as easy-credit and the strong Pound chased imports in huge volumes. The irresponsible talk of zero interest rates means that confidence in Sterling is unlikely to return any time soon. The only question now is how low will Sterling go? The opposition parties now need to make the collapse of Sterling into a major issue. Thirty years ago this sort of devaluation would have dominated news coverage, but now its being reported piecemeal and is slipping under the radar of most people. The public needs to understand just how serious this is, that their Pounds, in their banks, are becoming worth less with each passing day under Labour. Mervyn King and the government were warned time and again that Sterling was vastly overvalued and they did nothing to avoid the scenario of a massive and sudden correction. They were more interested in masking the inflationary pressures building up in demand, which though transparent in the housing market, were not visible as easy-credit and the strong Pound chased imports in huge volumes.

The irresponsible talk of zero interest rates means that confidence in Sterling is unlikely to return any time soon. The only question now is how low will Sterling go? The opposition parties now need to make the collapse of Sterling into a major issue. Thirty years ago this sort of devaluation would have dominated news coverage, but now its being reported piecemeal and is slipping under the radar of most people. The public needs to understand just how serious this is, that their Pounds, in their banks, are becoming worth less with each passing day under Labour.

]]> By: Lola http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7985 Lola Thu, 13 Nov 2008 23:23:33 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7985 Mr Redwood, why don't you compose one of your theoretical letters? From Gordon Brown to the IMF. Reply: Timing is everything! Mr Redwood, why don't you compose one of your theoretical letters? From Gordon Brown to the IMF.

Reply: Timing is everything!

]]> By: oldtimer http://johnredwoodsdiary.com/2008/11/13/the-governors-sterling-collapse/#comment-7984 oldtimer Thu, 13 Nov 2008 23:16:23 +0000 http://www.johnredwoodsdiary.com/?p=2079#comment-7984 The decline in the £ fx rate and the talk of putting the bank of England`s printing press onto 24/7 duty (read Gavin Davis in the Guardian) presages the Brown Banana Republic. It is closer than most people seem to realise. The decline in the £ fx rate and the talk of putting the bank of England`s printing press onto 24/7 duty (read Gavin Davis in the Guardian) presages the Brown Banana Republic. It is closer than most people seem to realise.

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