The Flagging Pound
Don Bowman – April 1, 2008
The article about the Chinese shunning the flagging dollar is interesting, but are you aware that the pound is also suffering at the moment and not a word is being said about it except in financial circles.
A year ago I was getting around 1.47 euros to the pound. By September this had dropped to around 1.40 to the pound. Checking xe.com today I see that the price for euros is in the region of 1.26. This is a drop of around 20 cents in a year.
This situation is compounded by the dollar rate. There is much talk about the dollar falling against the Euro, but the pound to dollar ratio has not changed anywhere near as dramatically. What this means is that the pound has been falling roughly in line with the dollar.
Recently this has also changed. The pound is now falling against the dollar as well. Last year the pound peaked against the dollar at around 2.04. According to xe.com the rate is now about 1.97. As the dollar is clearly not gaining in value, this must mean that it is the pound that is falling – and falling significantly faster than the dollar.
All this raises a very simple question in my mind – What the hell is going on?
As for the article about gold and silver. If the gold is not at Fort Knox and it is not in the Bank of England, where the hell is it?
A final thought: why do people assume that gold and silver have any more intrinsic value than paper money?
Last updated 03/04/2008