Everyone knows that Sterling is on a long term fall due to continuing balance of payments problems. The green line in the graph below shows the Purchase Power Parity level of the pound (the level that would happen without currency speculation):
The UK Balance of Payments has been terrible for years due to membership of the Single Market:
This is causing a steady decline in the underlying value of the pound. As the OECD put it: "The current account deficit has reached 7% of GDP, the highest level on record, increasing vulnerabilities." Although the OECD avoided the obvious conclusion that the answer to the problem was to leave the Single Market. The pound is not sustainable within an EU Single Market that is dominated by the Euro (See The Imbalance of UK-EU Trade..).
On 7th October the pound was trading at near 1.24 dollars which is below the PPP value. Given that the UK is likely to be leaving the Single Market and so will experience a recovery from the extraordinary Balance of Payments deficit it now looks like a good "buy" for any speculator who is not of a nervous disposition.
Those who take the long term view can see that the pound is actually stabilising after a long fall since 2014:
One disturbing aspect of the latest sell-off of the pound is that it is being orchestrated by the US Investment Banks who worked together to run the UK Remain campaign. Goldman Sachs, Citigroup, JP Morgan, Morgan Stanley etc. have mounted large scale publicity campaigns to suggest that the pound would fall massively and all provided huge funds to finance the Remain campaign in the UK. The recent Flash Crash of the pound in the quiet hours of last night could have been a deliberate intervention to create a headline after Theresa May implied that the UK would leave the Single Market. Flash crashes are artificial swings in market values that require a quiet moment in the markets and the sort of software and market knowledge that these Investment banks possess.
(See Funding of the StrongerIn Campaign, US Investment banks are running the campaign to get the UK into the Single Market. Such foreign involvement in national politics would not have been permitted in most countries and has been conveniently ignored by the broadcast media).
Of course, Goldman Sachs, Citigroup, JP Morgan and Morgan Stanley will all be buying futures ready for the return of the pound to PPP values having pushed the pound down with their concerted advice.
Goldman Sachs had a pivotal role in the Greek financial crisis and has appointed the retiring head of the EU Commission, Jose Manuel Barroso, ex-EU Commission President as CEO of its International Division.
Goldman Sachs is particularly famous in the UK because it, and the other big US, "Stronger In" backer, JP Morgan, precipitated Gordon Brown's give away of UK gold between 1999 and 2002. No-one knows why Brown rescued these US Banks with British taxpayer's money. We do know that Tony Blair retired into Directorship with JP Morgan which also involved huge consultancy fees.
There are strong hints here of the major banks attempting to control global politics for their own interests. What is deeply suspicious is that the banks are now routinely offering large salaries and pay-offs to friendly politicians after they leave public life. "... Transparency International, the anti-corruption group, has highlighted the growing frequency of revolving-door moves. It cites US data showing that in the early 1970s, only 3 per cent of retiring senators went on to become lobbyists, whereas now the figure is close to 50 per cent." (Financial Times).
The UK Balance of Payments has been terrible for years due to membership of the Single Market:
 |
| See The Imbalance of UK-EU Trade.. |
On 7th October the pound was trading at near 1.24 dollars which is below the PPP value. Given that the UK is likely to be leaving the Single Market and so will experience a recovery from the extraordinary Balance of Payments deficit it now looks like a good "buy" for any speculator who is not of a nervous disposition.
Those who take the long term view can see that the pound is actually stabilising after a long fall since 2014:
One disturbing aspect of the latest sell-off of the pound is that it is being orchestrated by the US Investment Banks who worked together to run the UK Remain campaign. Goldman Sachs, Citigroup, JP Morgan, Morgan Stanley etc. have mounted large scale publicity campaigns to suggest that the pound would fall massively and all provided huge funds to finance the Remain campaign in the UK. The recent Flash Crash of the pound in the quiet hours of last night could have been a deliberate intervention to create a headline after Theresa May implied that the UK would leave the Single Market. Flash crashes are artificial swings in market values that require a quiet moment in the markets and the sort of software and market knowledge that these Investment banks possess.
(See Funding of the StrongerIn Campaign, US Investment banks are running the campaign to get the UK into the Single Market. Such foreign involvement in national politics would not have been permitted in most countries and has been conveniently ignored by the broadcast media).
Of course, Goldman Sachs, Citigroup, JP Morgan and Morgan Stanley will all be buying futures ready for the return of the pound to PPP values having pushed the pound down with their concerted advice.
Goldman Sachs had a pivotal role in the Greek financial crisis and has appointed the retiring head of the EU Commission, Jose Manuel Barroso, ex-EU Commission President as CEO of its International Division.
Goldman Sachs is particularly famous in the UK because it, and the other big US, "Stronger In" backer, JP Morgan, precipitated Gordon Brown's give away of UK gold between 1999 and 2002. No-one knows why Brown rescued these US Banks with British taxpayer's money. We do know that Tony Blair retired into Directorship with JP Morgan which also involved huge consultancy fees.
There are strong hints here of the major banks attempting to control global politics for their own interests. What is deeply suspicious is that the banks are now routinely offering large salaries and pay-offs to friendly politicians after they leave public life. "... Transparency International, the anti-corruption group, has highlighted the growing frequency of revolving-door moves. It cites US data showing that in the early 1970s, only 3 per cent of retiring senators went on to become lobbyists, whereas now the figure is close to 50 per cent." (Financial Times).
A Note on the Fall of the Pound
The fall in the pound is not due to Brexit, it has been happening for two years and ironically it is due to being a member of the EU. It is impossible for the UK to keep the pound when almost all the other countries use the Euro:
(See The Imbalance of UK-EU Trade..).
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