One of my biggest worries about the UK leaving the EU was the impact on our trading position and our ability to compete in world markets. The UK hasn’t been an exporting nation for a while, our presence in the EU allowed for substantial economic growth and the freedom of movement mean’t a strong currency and cheap labour opened the flood gates. This led to massive economic growth and unrealistic social mobility from real estate investing. Now that is all about to go, the leave campaign seems to not have a future plan.
Listening to Mark Carney, it was like listening to a central banker who had no options and just didn’t give a damn. The mantra going forward is ease, ease, ease. £150 billion is just the start. We are yet to see how much we will lag behind the rest of the world in terms of growth. Since we have nothing really to export, we need a plan fast to offer the world what it needs and to compete with the likes of the US, Germany and Japan that already have a vast export market. My theory is, to encourage exports, to the US and Europe under the new rules, the Pound would have to be cheaper in my opinion than the Euro and the Dollar for us to survive. This will no doubt spark a currency war, the rising Euro, will need to devalue and the US despite raising rates may well hold off and balance the Dollar. The Aussie is likely rise in future alongside commodities, but with a 175 basis point rate, there is a limit to the bull run. Well, I predicted on myblog the under 1.3000 drop prior to now, I was probably the few people calling Cable short at the time.
What levels do you think Sterling will trade to before it becomes attractive to speculators, that are weighing the risk?
NIce thread… Well, Emeraldorc, as they say in the House of Lords debates, ‘My Lords, I declare an interest…’ because I am long the Pound and am locked into that view against certain currencies in particular, though not the US Dollar. . . If I may, however, come away from my more narrow trading bias, I would say that if the UK were to sell anything, it would be its degree industry, as for many years there has been an attractiveness to gaining a British degree; how many of the existing universities will manage to continue churning out meaningful degrees at the current rate, well, that is a big questions.
Undoubtedly, manufacturing and exports are down, so there must be other things that the UK can sell:
Scotland will continue to attract tourism through shooting estates (game) and scenic travel (the Highlands and Islands); Cornwall and other historic areas of England too; London will continue to attract for a number of reasons… Will fracking be the next big thing?
Perhaps it may that a new excellence in R&D will blossom in the United Kingdom, and that people from around the world will want to come and participate in that industry… I am not sure… but there has to be a plan, and, like you say, the only plan the Leave side seem to have is ‘Out of Europe, but business as usual’, which is a poor capitalisation on a mandate from the people…
Well, I only imagine, that the rich Middle Eastern crowd will still keep coming for degrees but with countries like Georgia attracting India for university and Czech Republic being the new go to for Medicine, I imagine we should be worried.
Fracking? That is still firmly US territory, with the environmentalists poised to strike, I doubt that industry willl take off ever.
Yes, great point on Scotland, free university, great scenery, don’t mind harbouring enemies of the crown (Al Fayad), great sights of course and North sea Oil, well all cause for the next Scottish referendum that would mostly likely end with an exit. Well, things could be worse with Teresa May set to be the next PM anything can happen.
Well, I am still bearish on Sterling even though I can smell the bottom of the pit. That being said, the 1984 lows are firmly in sight. I think it will be better to have a cheaper Pound than an expensive one in the face of this mess. I think Carney feels the same.
The crypto realm hasn’t gained legitimacy yet and is incredibly risky. I, love taking risks - especially leveraged ones - but, even I won’t mess w/ something like BTC. Too unpredictable and the potential to get whacked for no apparent reason seems lurking around every corner.
Etherium was a very huge gain this year. Crypto is picking up steam. I am not a huge fan as I look at them more like Gold as a safe haven in terms of instability. In regards to fiat there is no real advantage other than they are traded on exchanges most of the time.
It is currently an exciting story and a lot of new traders and old are just looking for a new asset that offers return. Since December last year BTC is up 100%, so it would have been tough for you to lose cash, you would have to be a real plunker.
That story will only continue if Gold keeps rising but so far it seems it has more life in it. A lot millionaires got made this year from the Crypto bonanza as a consequence, it is the next best thing but beware when wall street goes main street.
