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Did You Short the Pound?

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February 17, 2008 – Comments (5)

On more than one occassion I have written that the British Pound is going down further.  They have enormous spending on social programs and an excessive welfare spending, but exceptionally low spending on education. 

I taught over there and it was like living in "Lord of the Flies" for how out of control their children are, and, utterly shocking to me the students knowing that I was a teacher would ask me to buy them cigarettes and booze and they didn't see it a problem that I should see them drinking, smoking or smoking pot.  My teaching load was 247 students and went home early simply because it was life in the worst hell I've ever lived. 

Britain pays all your eduation costs if you want to be a teacher and they still can't keep teachers or catch up to the attrition rate of teachers and the results is the return of the barbarians.  School is a hell hole for students and teachers.

Anyway, when you have kids leaving school that can't do 7x8, your economy is screwed, and only 1/3rd of the students in the school I was in were expected to make the equivalent of grade 10 or sophmore.  Nationwide I think about 25% do not get to that level of education, and sophmore level is a common place where students quit school.  Their 6th form is like our senior high and many do not go on to complete it.  It is considered "higher" education.

Well, here's another nail in the British Pound, they are Nationalizing Northern Rock, the bank that had a depression era bank run last summer with people lined up around the block for three days withdrawing their money.  This is a significant tax payer bail out, and one where their is no money in government coffiers to pay for it.

Shareholders end up with nothing with this kind of deal and it the risk that bottom fishers take.  Bankrupcy is the other risk. 

Incidently, about a year ago I anticipated that there would be depression era type bank runs with people lining up to with draw their money.  It simply freaked me out to see it happen so soon after I anticipated it.  Be diversified.

5 Comments – Post Your Own

#1) On February 17, 2008 at 6:24 PM, kristm (99.75) wrote:

Just wait until Britain adopts Shariah law to meet demands of the increasing Muslim population... There will be an absolute population exodus in the UK within the next 10-15 years.

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#2) On February 17, 2008 at 7:57 PM, lquadland10 (< 20) wrote:

And people wonder why there is so much unrest around the world. To many people with to much time and not enough jobs. Also add in the One of the brokeraged firms( I think ) Morgan Stanley also closed some offices and jobs in England and the English Banks are now trying to get CHINA to invest in them. The Soviet Union and China are now starting to form ties against America.If we don't think this is world wide recession quess again. More World Wide Power Shifts and a Country run like Enron. What country will fall next because of England?

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#3) On February 17, 2008 at 8:51 PM, dwot (43.46) wrote:

When I was living there I didn't think there was much to the economy of substance.  It is a small country with lots of people so there are fewer natural resources per person.  A lot of their economy seemed to have gone to financial markets and products and those are highly transportable.  For example, they used to be the metal exchange and now there is a Shanghia metal exchange.  It seems to me they are losing those kinds of middle man jobs.

They have few natural resources,  yet they have big natural resource companies, like Xstrata.  China is developing their own natural resources.

I am not sure what you mean "fall next because of England."

I don't know what you mean by ties against America. 

I was taught as a child what made Canada and the US strong was our manufacturing base which leveraged our work out put.  Giving our manufacturing and production jobs away in favour of labour intensive service and middleman jobs doesn't seem like such a good idea to me.

Where has the economic power transferred? 

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#4) On February 18, 2008 at 12:38 AM, dwot (43.46) wrote:

another post on it, http://www.nakedcapitalism.com/2008/02/northern-rock-nationalization-best-of.html

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#5) On February 18, 2008 at 8:43 AM, dwot (43.46) wrote:

Yup, the pound went down...

http://www.marketwatch.com/news/story/story.aspx?guid=%7B1046BAC5%2DCE64%2D4094%2DB84D%2DFB478563B89D%7D&siteid=rss 

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