- The world is heading towards a global currency meltdown. We are facing an escalating currency war! Japan is now accelerating their money printing to devalue the Yen. In the end, all fiat currencies will go down the toilet bowl of currency debasement. Get real money: physical gold/silver! They are real money for the past 5000+ years!
Sterling crisis looms as UK current account deficit balloons!
by Jeremy Warner, http://www.telegraph.co.uk/
Is the UK heading for a currency crisis?
It’s the sort of problem you might have thought disappeared with the 1970s, but as the Coalition renews its wedding vows, that’s the unsettling possibility raised by economists at both HSBC and Royal Bank of Scotland. With fears of a eurozone break-up, a calamitous fiscal contraction in the US, and a hard landing in China now fast receding, it is possible financial markets will refocus their attentions on more conventional concerns. The failings of the UK economy might be prime among them.
Some of the reasons for this need little explanation. Low growth has undermined attempts to reduce the fiscal deficit, which remains one of the highest in the OECD. This in turn is likely to lead to the loss of Britain’s prized triple A credit rating this year, making the UK comparatively less attractive to overseas investors. What’s more, capital flows from the eurozone to perceived “safe havens” such as the UK are slowing as the crisis eases. There is also evidence of elevated concern among investors about Bank of England money printing.
But some of the other reasons are less well appreciated, possibly because we’ve become so accustomed to them. Almost unbelievably, Britain has not enjoyed a trade surplus in goods since 1981, or more than 30 years ago. This long-standing weakness has been partially compensated for by a relatively large surplus on services, and on overseas income, but even so, Britain has been in overall current account deficit ever since the mid-1980s.
In other words, the UK has been persistently spending beyond its means. Despite the crisis, it shows few signs of changing its ways. The holy grail of a more balanced economy, with a greater proportion of GDP coming from net trade, remains as elusive as ever. It’s perfectly reasonable for economies in their development phase, when they are sucking in resource for long-term investment in infrastructure and job creation, to run trade deficits, but when the money is being blown on current consumption, both public and private, it becomes rather more problematic.