Breakingviews.com disagrees with Jim Rogers about the UK and the British Pound being finished. Though they think things are likely to get worse before they get better:
But its weakness
will be salutary. The trade deficit will plunge and the external accounts
rebalance. Export-UK will be born, selling everything possible - though, as
Rogers says, not as much oil as before.
That’s the brighter UK future - on the horizon still, unfortunately, while sombre clouds called recession, budget deficit and debt glower overhead. The fiscal cloud, if not dispelled in time, could make the fate of the UK and the pound still worse. But there is time to avert fiscal collapse, and if the pound were to dive to Rogers’s depths, its visit should be short-lived.
Last year it was the US dollar that was going to crash, and in fact it did crash in many ways. I think it was down around 40% from it's peak against the Euro. Of course right when it was at it's low point the greatest uproar was occurring, the USD was DEFINITELY finished. Then the dollar went up and up and up.
Just like stocks the bad news tends to get priced in fairly quickly I would think. Perhaps even faster in currencies as there are far more people following a currency than any stock.
Posted by: Roger | February 04, 2009 at 10:50 PM
@Roger: True, and making a living speculating on currencies seems a heck of a way to make a living. I'd go broke in no time, whereas investing in stocks allows me to achieve the same in slow motion. ;-)
On Rogers, Faber, Zulauf, I've noticed when they talk about currencies and commodities they'll give their short and long term views on each.
Posted by: CONTROLLED GREED.com | February 05, 2009 at 07:24 PM