The collapse of the pound sterling (prologue)

I believe that it is time for someone to call the MI5.

The hour of the truth has come for the pound sterling and the British economy and the expectations are not good at all. The quotation of the pound sterling has fallen down today to his rock bottom opposite to the dollar in the last ten months exceeding the barrier of 1,50 dollars up to staying in 1,47. It has been the worst evolution in only one day from January, 2009. Opposite to the euro, the descent came up to a 0,91 pounds value. The analysts are sure that the fall will not stop.

If the pound sterling has always been a rock that was showing the soundness of his economy, now the cracks are so numerous that there are great those who think that the markets soon will apply to Great Britain the same harassment that suffers Greece. Not in vain his budget deficit will reach at the end of exercise 12,6 % of the GDP, to only one tenth of the Greek number.

The descent has been the form in which the markets have received the last electoral opinion poll that places the Labours Parties members to only two points of the conservatives. In these conditions, no party would obtain the absolute majority. A stage of political instability would be more difficult that the new Government will approve the clipping of the necessary public expenditure for sanear the public accounts.

Another way of saying it is that the markets were betting for a victory of the tories (that have promised expense clippings with more intensity that the Labours Parties members) that now it is not so clear that it is going to take place.

“This morning (per yesterday) we have been witnesses of what we might call the beginning of the collapse of the pound sterling”, has said Nick Beecroft, of Saxo Bank. It does not discard that very quickly it falls down to 1,40 opposite to the dollar and to 1,20 in summer.

Alarmist can dream, but other analysts coincide that the country is not going to be able to continue for much time at his current debt levels. “The United Kingdom has lived of his economic glories of the past and that cannot continue a lot of time”, said James Hughes, economist chief of Cardinal Black Swan in a report known Friday. “More soon or earlier, the status of financial refuge that has the pound sterling will be deteriorating while there is known the authentic scope of his structural deficit”.

The currency will not be the only victim of this situation. In fact, the cost of the financing of the debt also has gone off. From November, the differential with the German bonds to ten years has gone on from 0,35 points to 0,90, what it places to him in a position similar to that of Italy. As the agency of qualification S&P grants Italy the rating A +, one does not discard that AAA whom the United Kingdom enjoys could turn degraded in the next months. A blog of Financial Times emphasizes it.

And, as would say Pepe Blanco, this cannot be a coincidence. Are the Anglo-Saxons conspiring against themselves?