The Economy
I have called before for an increase in interest rates and an increase in taxes, this advice is contrary to the current view but hear this.
When a foreigner invests in the UK they look at two areas, not only shares and bonds but also exchange rates. You can make money if the share price rises but that gain will be wiped out if the exchange rate goes against you. The same with yields on bonds, yes they may well pay a good rate of interest but again that will be reduced if the rate goes against you.
That is exactly why foreign investors are now deserting the UK market. Look at the dividend proposal for LloydsTSB, if they don't pay a dividend then there is not much point in holding the shares. Pension funds the need the income on the shares to pay the pensioners, with a reduced work ofrce where do you think the money comes from, thin air!
Economies throughout the globe are in trouble, look at Pakistan, Turkey, Argentina, Hungary, America, Britain etc this is deadly serious, and you have not seen anything yet, the worst is yet to come. The frailty of the American economy will become more apparent as new President takes up his post. He will not be in a position to change anything, not for the better anyway.
What will happen is that I think various inquiries will be held in to the war, and occupation of Iraq, and we in Britain will be up to our necks in it. It was not only the war, it was what happened after the war, why did it go so wrong.
When a foreigner invests in the UK they look at two areas, not only shares and bonds but also exchange rates. You can make money if the share price rises but that gain will be wiped out if the exchange rate goes against you. The same with yields on bonds, yes they may well pay a good rate of interest but again that will be reduced if the rate goes against you.
That is exactly why foreign investors are now deserting the UK market. Look at the dividend proposal for LloydsTSB, if they don't pay a dividend then there is not much point in holding the shares. Pension funds the need the income on the shares to pay the pensioners, with a reduced work ofrce where do you think the money comes from, thin air!
Economies throughout the globe are in trouble, look at Pakistan, Turkey, Argentina, Hungary, America, Britain etc this is deadly serious, and you have not seen anything yet, the worst is yet to come. The frailty of the American economy will become more apparent as new President takes up his post. He will not be in a position to change anything, not for the better anyway.
What will happen is that I think various inquiries will be held in to the war, and occupation of Iraq, and we in Britain will be up to our necks in it. It was not only the war, it was what happened after the war, why did it go so wrong.
posted by Catch22 at 2:45 AM
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