Weak sterling will deliver UK surplus

[heard_it_all_before]

A headline from the other day, but nevertheless one that has had me wondering.

If this spin (pump) is to be believed and we are to return to being a country of prosperity, (and you never know that they might even re-stock the country's Gold Supplies), whose to say that the bungling fools in charge won't just pisss it all down the river with the rest of wasted billions

Weak sterling will deliver UK surplus

Britain is to transform itself from chronic over-spender to a global surplus country as the weak pound revives its export industry, according to a report by Goldman Sachs.

Ben Broadbent, the bank’s UK economist, said the 20pc slide in sterling over the past year was “enough to push the UK’s current account into comfortable and permanent surplus”. Britain has not had a durable surplus in living memory.

The bank issued an alert yesterday advising clients to build up sterling positions. It said the economy was in better shape than it looked, with public debt likely to peak at under 80pc of GDP — lower than Germany and France. [Read More....]

By Ambrose Evans-Pritchard
Published: 8:55PM BST 22 Sep 2009

So a question for all the City Types:

For all of us that like nothing more than seeing the back of blighty while we toast ourselves on a Mediterranean beach, how much longer are we going to be subjected to the devalued Pound and continue to have to pay what is in effect, a 20% foriegn travel tax..?

 

[uncle_vanya]

Get one. Cyclops McRruin along with his economic ‘Advisors’ (Muppets) will soon be telling everyone that ‘Things will get better…’ Didn’t Teflon Tony keep saying the same thing?

Of course, they have to ‘Big Everything Up’ for the Neues Arbeits Shin-dig. Even McRuin was ‘larging it up’ when interviewed by Andrew Marr on BBC TV this morning. The speculation around Cyclops’s ‘state of mind’ and general health was dismissed by McRuin. He says that he is in ‘Tip Top Shape’… so there!!

McRuin and Pals have to be ‘Radical’ again, new ideas and new policies to flog to the weary voters… more ‘Del Boy’ bull droppings. The Labour manifesto will be full of the usual crud in due course. This labour government is totally incapable of changing. They will promise to be radical, listen to the public, blah, blah, blah… we’ve heard it all before, time and a gain. Previous Manifestos ‘Promised’ all sort of things, but they were reneged on. It was ‘More of the same’. More Laws to ‘Control us all’, more taxes (which is expected even from the Tory’s), more bull-droppings for sure.

Nues Arbeits is congenitally incapable of change because they have become so sure that their own lies and propaganda ‘Is the Truth’, they are arrogant with it. Pa McBroone will go into the next election, that is for sure, unless something drastic happens to force him to resign. But there are apparently more ‘Political Banana Skins’ in the offing whence all our Boys and Girls in Parliament return to work from their summer frolics on the beach.

 

[Semper_Flexibilis]

So all the Boss's doom and gloom the other day is misplaced?

Days of plenty are about to return on Planet Brown and no more penny pinching in the MOD!


Hiurrah! For Prudence the Master of the Economic Universe! He created wealth out of thin air!

 

[parapauk]

So a question for all the City Types:

For all of us that like nothing more than seeing the back of blighty while we toast ourselves on a Mediterranean beach, how much longer are we going to be subjected to the devalued Pound and continue to have to pay what is in effect, a 20% foriegn travel tax..?

While not a city type, I'd take a guess at the answer being a mix of:

(a). Never: the pound was overvalued against both the dollar and to a lesser extent the Euro.

(b). Never: most of the Med states would have had a de-facto devaluation of their currencies during this recession but their euro membership is proping their exchange rates up at a level that hurts both them and anyone visiting from the non-Eurozone

(c). About six months: most of the financial would still looks to the US, UK, Chinese, Japanese and German economies as the leading lights and tends to drift over the rest. With the recession over and a chance for the market to stop and think about everyone else, as this report shows the first signs of them doing, there will be a great collective "Oh Shit!" with regards to the economies and debt levels in much of the Eurozone, and this will drag the Euro down.

 

[Mediaeval]

Hang on though - might this be correct? A few pennies that seem to be dropping lately:

- Economic crisis largely due to banks "maxing out their credit cards" - sub-prime a symptom not a cause.

- Ergo, medium-term, banks can't afford to lend much until world capital values rise to provide collateral.

- Meanwhile, Brown's economic strategy has devalued the pound - so if it continues (according to GS) our public debt begins to reduce at a rapid rate

- Surely then, a combination of bank lending down (to individuals and the private sector) and public debt reducing will in due course create a situation where the Govt is the only institution in UK that can actually spend (tax receipts + falling debt gradually >expenditure)?

Perhaps Gordon isn't mad after all, although ironically the Tories are likely to reap the windfall of the storm, rather as He did as Chancellor in 1997..

Standing by to be enlightened...!

 

[Artificer356]

Britain is to transform itself from chronic over-spender to a global surplus country as the weak pound revives its export industry, according to a report by Goldman Sachs.

What export industry? Do we still manufacture anything. We have no car industry, no aviation industry, no steel industry, no ship building industry. So what do we export?

 

[Manley]

Britain is to transform itself from chronic over-spender to a global surplus country as the weak pound revives its export industry, according to a report by Goldman Sachs.

What export industry? Do we still manufacture anything. We have no car industry, no aviation industry, no steel industry, no ship building industry. So what do we export?

Pissed off native Brits old boy, Pip!,Pip!

 

[jagman]

Britain is to transform itself from chronic over-spender to a global surplus country as the weak pound revives its export industry, according to a report by Goldman Sachs.

What export industry? Do we still manufacture anything. We have no car industry, no aviation industry, no steel industry, no ship building industry. So what do we export?

I suggest you look again.
Whilst we may not be the industrial powerhouse we used to be we still manufacture quite a lot and have huge potential to produce more.
As an example take a look at steel production figures of 2007 and compare that to the early 1980's. Or try the figures for the amount of cars produced You might be surprised.
We have large mineral reserves sitting untaped, we have a huge unused workforce. As soon as we get rif of the halfwit Brown and actually make an effort we can put ourselves back at the forefront in many sectors.

 

[MikeMcc]

Britain is to transform itself from chronic over-spender to a global surplus country as the weak pound revives its export industry, according to a report by Goldman Sachs.

What export industry? Do we still manufacture anything. We have no car industry, no aviation industry, no steel industry, no ship building industry. So what do we export?

Shed loads. British-waste-of-space, EADS Astrium, Qinetiq, Airbus, Rolls-Royce, Minis, major car plants for Toyota and Honda. That's before looking at SMEs like the one I work for that's a world leader in drug discovery automation.

 

[heard_it_all_before]

The problem with relying upon exports, is that largely speaking, the raw materials or component's and parts are first imported from either Europe or Aisa in the first place.

However, one area of production that's nearly entirely constructed from UK sources is the caravan industry. The very same Industry that has strong UK sales, exports to Europe, employs thousands of people in the North East and is that same industry that Mandelson chased out of Downing St when they asked for a trade in scheme like the cars got. Like them or not, unlike the cars, they're nearly entirely 'Made in Britain'.

 

[Semper_Flexibilis]

However, one area of production that's nearly entirely constructed from UK sources is the caravan industry. The very same Industry that has strong UK sales, exports to Europe, employs thousands of people in the North East and is that same industry that Mandelson chased out of Downing St when they asked for a trade in scheme like the cars got. Like them or not, unlike the cars, they're nearly entirely 'Made in Britain'.

My Honda is more 'British' than most Fords and Vauxhalls… Go figure.

 

[jonwilly]

Devaluing your way out of a crisis is an old trick thats why some Nations requested that it does not happen this time.
UK exports will become cheaper, mind you imports will cost more.
Ask yourself
Do we export more then we import ?

'Nues Arbeits is congenitally incapable of change because they have become so sure that their own lies and propaganda ‘Is the Truth’, they are arrogant with it.'

Yes, Uncle V I do agree with that statement and I believe so do many Labour types.
Look up, http://order-order.com/
and see the photo taken at the Brighton Conference.

john

 

[nigegilb]

I have a stack of gilts in my pension fund. The only way the Govt is going to make headway in the massive amount of UK debt is to inflate its way out. Think about it. A 30K mortgage 20 years ago was a lot of money, now 100-140K is the norm. Inflation is forecast to start picking up next year. Then a key moment, does BoE stop QE or continue it for a while longer? Too cautious and we are in double dip territory, leave it going for longer than necessary then inflation will pick up. I suggest a deliberate loosening up policy will ensue.

Nothing like a few years of inflation to reduce debt.

 

[Semper_Flexibilis]

I have a stack of gilts in my pension fund. The only way the Govt is going to make headway in the massive amount of UK debt is to inflate its way out. .

I can see a problem here…


Labour has created a huge 'client state' on inflation linked benefits.

 

[nigegilb]

I have a stack of gilts in my pension fund. The only way the Govt is going to make headway in the massive amount of UK debt is to inflate its way out. .

I can see a problem here…


Labour has created a huge 'client state' on inflation linked benefits.

FY 2009 Govt Spend 631Bn of which 15% welfare and 17% pensions a tad more than national debt which is currently 175Bn but with inflation as a percentage of national spend it will decrease over time. Agree though, the figures are eye watering. I can't keep track of what percentage of GDP is being spent, probably breach 100% at this rate. Most recent check was just short of 60% forecast to go to 80% but we are already borrowing way more than forecast. Italy without the sun?

 

[Semper_Flexibilis]

I have a stack of gilts in my pension fund. The only way the Govt is going to make headway in the massive amount of UK debt is to inflate its way out. .

I can see a problem here…


Labour has created a huge 'client state' on inflation linked benefits.

FY 2009 Govt Spend 631Bn of which 15% welfare and 17% pensions a tad more than national debt which is currently 175Bn but with inflation as a percentage of national spend it will decrease over time. Agree though, the figures are eye watering. I can't keep track of what percentage of GDP is being spent, probably breach 100% at this rate. Most recent check was just short of 60% forecast to go to 80% but we are already borrowing way more than forecast. Italy without the sun?

So Prudence Browns 'Big Plan' would be rampant inflation to cut his debts even if it also wrecks the economy even more?

 

[nigegilb]

I would expect the Tories to do much the same. Many economists think a bit of inflation is a good thing, trouble is, such is the scale of the QE, if things are loosened up too much, we could rapidly get rampant inflation, which really would be damaging.

Either way, I think I'll hang on to my gilts. Labour have a habit of wrecking the economy, weakening the pound and ramping up inflation.

First one - check
Second one- check
Third one - just a matter of time........

 

[heard_it_all_before]

After all of Gordon's gobbing off at the G20 about protectionism, I would have thought that purposely engineering your currency to be devalued would also fall under the same banner that he's been trying to prevent the rest from doing. i,e, protecting their own interests.

Aren't we, as a major player within the EU, supposed to be part of a free trade and movement society? Not much free about it when travelling to any EU Capital would see you paying through the nose for even simple things like a cup of coffee.

They can't force us to stay in the UK, but they can, and are, making leaving a very expensive habit.

 

[Herrumph]

Thank you Parapuke - the old "the pound was over-valued against the dollar and euro" argument. Similar in tone to the assertion that "the pound in your pocket remains the same" used by good old Labour the last time they screwed the country.

Of course when the pound fluctuates there will always be some pros and cons, some winners and losers but overall a fall in the currency against most other currencies is universally considered a bad thing. Unless of course you have your currency backed up by something valuabe like, ... errr .. gold. Damn we sold that off didn't we Gordon.

The pound was probably a bit over-valued at 2 dollars but the euro - over-valued at 1.20. New Labour weren't complaining when it was at 1.70 odd after they'd had a couple of years in power - it was a sign of how successful Gordo was as a Chancellor if I remember correctly.

 

[jonwilly]

"Nothing like a few years of inflation to reduce debt. "

How true Nigeglib
I remember the late 60's early 70's.
I have told this tale before, in mid-late 60's I could buy 16 pints of best bitter for a quid. 1 & 3 a pint.
Now ?
john