British currency is on the brink according to billionaire financier
Thursday, Feb 25th, 2010
Billionaire financier Jim Rogers has predicted that the British Pound could completely collapse within weeks, sending shockwaves throughout the global economy and heralding the beginning of a downturn that would make the recent economic crisis look tame in comparison.
“Other currencies aren’t strong and the Euro has real problems, with cracks much wider than Greece beginning to show,” Rogers said.
“But it’s the Pound that’s most vulnerable. In real terms, it’s already devalued against virtually every currency barring the Zimbabwean dollar and it’s especially exposed over the weeks running up to the UK election. In a basket of currencies, the Pound is potentially a basket case. And that will put Britain in an extremely bad position for the shakedown.”
“The last few months have seen a ‘false bounce’, shorn up by massive short-term injections of government underwriting,” Rogers, the former business partner of George Soros, said.
“But it can’t last. We’ve been applying temporary sticking plasters, not long-term cures. Later this year we’ll see the start of the real recession, with more Lehman-scale disasters and a fallout which won’t stop until the underlying malaise is genuinely cured.” he added.
Rogers was quoted in a press release ahead of a keynote appearance at next month’s Global Trading Day seminar in Westminster along with investment advisor Dr Marc Faber and British trader Vince Stanzione.
The British economy is facing a “double dip” after January figures put the idea of a recovery firmly on the backburner.
Rogers’ sentiments echo those of Swiss Bank UBS, which this week speculated that there could be a run on the pound if the government too aggressively tackles Britain’s huge deficit, projected to reach £178bn this year.
Last week, Sterling hit a nine month low against the dollar, falling to $1.05, and slumping beyond parity for the first time against the euro.
An announcement yesterday by Mervyn King, the Governor of the Bank of England, that the bank was ready to print more money and “do whatever seems appropriate”, sent the currency sinking once more.
Sterling fell sharply, from $1.5529 at 9.13am, just before King began speaking, to $1.5398 at 10.30am, when he finished giving evidence to MPs.
The stark downturn has led Jim Rogers and Marc Faber to predict a currency crash foreshadowing a full scale global “shakedown”.
This article was posted: Thursday, February 25, 2010 at 10:51 am