Is Sterling stuffed? or just a blip?

In Australia we have been almost entirely sheltered from the effects of the GFC but occasionally a newspaper article comes along which succinctly illustrates how bad things really are in Europe. This article was in the financial section of the Sydney Morning Herald today, it starts:

"The Australian dollar may have retreated from historic highs against the greenback, but that hasn't stopped it from notching new records against other major world currencies.

The British pound has lost its dominance over the Australian dollar over the last four years, with the local unit setting a 28-year record against the pound overnight, as the UK economy struggles with poor growth and high levels of debt. It has also reached a four-and-a-half year high against the Japanese yen."

Click here to read more: http://www.smh.com.au/business/markets/surging-dollar-notches-records-against-pound-yen-20130308-2fpj1.html#ixzz2MwJNJAjX


It is worth reading if for no other reason than to see how the UK/Europe is viewed from outside and the startling information that the $AUS has gone from being worth 33p in 2001 to 69p now.


I read in here and similar news/chat groups complaints about the austerity measures put in place by the UK, Greek and Spanish governments but I must admit I tend to dismiss it as just whinging (lets face it we do it in this country too). However this article really brings home how the purchasing power of the pound has dwindled and how the debt crisis must be affecting ordinary people.

As an aside it is undoubtedly good for the UK's economic revival because I notice that on Ebay goods sourced from the UK are good value for money here even with postage - a situation previously only enjoyed by the USA and China (of course). I myself bought a camping kettle from the UK a few months back much cheaper than I could buy it here.

As another aside a banker said on TV yesterday that Japan was probably the next basket case economy to rival Spain Greece Italy and the UK. He also mentioned that the future for Irish economy was looking bright after they bit the bullet and enacted their austerity measures.

Re: Is Sterling stuffed? or just a blip?

Bruce - Simple fact - If the UK were part of the Eurozone currency we would be in a far worse position than Greece.

It's only by allowing the pound sterling to weaken that the UK has (just about) been able to keep it's credit rating (Albeit downgraded one notch recently)

Although you've benefitted by buying that camping kettle, in the main UK exporters have not really seen a big boost to business 'tho a low pound is helping at the margins.

Austerity in UK It needs to get much worse before things will improve, a decade of frivolous spending funded by debt by both individuals and the Blair / Brown government has meant every man. women, and child in UK now owes £68,000

They used to call Australia the 'Lucky country' when I was there and it looks like it still is.

Re: Is Sterling stuffed? or just a blip?

The global strategist at Morgan Stanley, Gerard Minack (the bloke that predicted the GFC) has said that because the underlying problems of debt has not been properly addressed the same could happen again but because interest rates are now so low he fears depression will be the resulr

Read it and weep

Or listen to it here