PowerSwitch

Is the UK's economic prognosis in fact worse than that for the US and that of the £ worse than that of the $?

Sterling has noticeably be falling against the dollar recently and even worse against the Euro (over 8% in the last month alone).

The UK's balance of payments deficit has been widening spectacularly over the past 10 years.

Since we let much of our manufacturing industry go to the wall in the 1980s and now we're a net importer of oil and gas, if the financial sector is collapsing what have we got to sell to the rest of the world?

Will we see a collapse in the value of Sterling far worse than that predicted by American doomers for the US Dollar?

Won't that mean rampant inflation and national impoverishment?

Should I get my savings out of Sterling now while I can still buy meaningful quantities of Euros (or even gold)?

...But then again, I was one of those people predicting we'd see $200 oil by the end of the year.

Yogi

Not having all ones eggs in one basket is always a good idea. Apart from that general principle, the current level of uncertainty results in no desire on my part to suggest any particular direction.

If I had substantial savings I'd put them into agriculturally productive land. Preferably mixed forestry, arable, orchards with it's own watercourse running through.

If I didn't have enough to do that, I'd buy precious metals - that's real physical metal in my hand not some bit of paper which says I own some metal in someone's bank vault. I'd expect to pay more than the published market prices suggest I should.

That's what I'd do - I'm not saying that's what you should do.

Buy guns, lots of guns.

Haggis wrote:Buy guns, lots of guns.

And ammo
And crossbows and bolts
And body armour
And fags, booze, dope and a large stock of Mars bars.

Not that you should take any notice of me, I 've already spent most of my money on women booze and drugs, what was left I wasted.

Hehehe. Article here about Sterling going to hell in a handbag....

You could of course invest your savings in my mortgage...

http://www.moneyweek.com/investments/wh ... 36056.aspx

I agree that Sterling is more likely to continue falling against the Euro because of our worsening balance of payments/fiscal position; but it is still a gamble. In the same way that it is very hard to predict the price of oil at a certain point in the future, it is almost as hard to say what the exchange rate will be when you need to convert the money back to sterling later.

I think it is worth putting a portion of any savings in Euro, as long as you accept the risk of getting your fingers burnt.

Filter Feeder wrote:If I had substantial savings I'd put them into agriculturally productive land. Preferably mixed forestry, arable, orchards with it's own watercourse running through.

If I didn't have enough to do that, I'd buy precious metals - that's real physical metal in my hand not some bit of paper which says I own some metal in someone's bank vault. I'd expect to pay more than the published market prices suggest I should.

That's what I'd do - I'm not saying that's what you should do.

The Food Water & Energy Company has been trying to get me to invest in arable land in Argentina. For £20,000 one can buy about 50 acres in northern Argentina.

http://www.food-water-energy.com/index.html

Have any of you had dealings with this company?

YogiEdwards wrote:Should I get my savings out of Sterling now while I can still buy meaningful quantities of Euros (or even gold)?

Apparently a lot of people are taking out their savings and depositing them with Irish banks, where the government has guaranteed 100% of the amount deposited.

Presumably those accounts are denominated in Euro.

Personally I wouldn't invest in land. I'd buy it. Have your name on the deeds and ownership papers. Pay no management fees.

That company could work on a 'reserve' basis. i.e. ony 10% of punters will want to sell their land at any one time, so only need to buy 10% of the land... put the rest into whatever.... also, how do you know what they are doing with the land? Do they buy rainforest and cut it down for soya? Do you want to fund that kind of activity?

Also what use is land to you if it's in Argentina should the unthinkable happen. In my book land has to be a short walk from home to be useful.

I remember one analyst saying that the £ would go 2:1 against the Euro and then there would be a push for Britain to adopt the Euro, who knows, there are enough weaker countries in the Euro area to start pulling its value down as well.
I think I wrote on a thread here over the summer that one canny investment would be to buy US gov bonds based on the fact that all this deleveraging would be dollar positive. not looking like a bad call now.
Otherwise if gold goes back into the low 700's again this month, its your last chance to board that train

I've had a load of my savings in euros and yen for the last 18 months (is there a smug smiley? ).

Anyway, I tried to get my euros back yesterday but ran out of time.

I would be very nervous about the eurozone if I were you - it could be in a very bad position. The squabbling about what to do has started and it doesn't have the US $ reserve currency status to fall back on.

To be honest I'm not really sure where's good. If they inflate out of this maybe gold (forgive my sins), property even. Who knows. I was thinking of buying lots of generators to hire out - think that would be a good investment.

That company suggested I read the following two articles

http://www.moneyweek.com/investments/co ... 24628.aspx

http://www.guardian.co.uk/environment/2 ... food.sudan

I haven't read them yet.

SunnyJim wrote:Personally I wouldn't invest in land. I'd buy it. Have your name on the deeds and ownership papers. Pay no management fees.

This is what I meant. I'd live on that land too. I would not invest in land on the other side of the planet, not unless I was going to emigrate. Keep it simple. Put your money where you can see it.

Andy Hunt wrote:

YogiEdwards wrote:Should I get my savings out of Sterling now while I can still buy meaningful quantities of Euros (or even gold)?

Apparently a lot of people are taking out their savings and depositing them with Irish banks, where the government has guaranteed 100% of the amount deposited.

Presumably those accounts are denominated in Euro.

The Irish economy isnt that big... I doubt the Irish govt could afford to cover all the money in Irish banks. It's a confidence building bluff.