Sterling, Silver

On Monday CU offered us a contrarian punt on Sterling, so here's a different view.  I don't much like the look of any of the major currencies right now, what with talk of competitive devaluation and every currency-bloc having its own compelling tale of woe. I took to billing in EUR again 6 months ago, which has served me well, but now I find myself unable to judge.  Is it all hopelessly relativistic ?  I am no macro-economist.

But there is always bullion to consider as a possible reference-point for paper money.  Readers will know I am a long-term holder of gold (strictly physical) which has been a one-way bet for several years now.  There have been some lurid commentaries on the precioussss just recently but I am unmoved: and quite by chance (Moody's having inexplicably failed to tip me off) I decided at the end of last week that we had reached a bottom.  So I went long silver, which I haven't held for ages now, and is by far the more volatile of the two traditional PMs: but I expect to be at my desk for a bit now, and able to watch the screen.

So if the post-Moody pound is to weaken against the dollar, I shall be even more glad of the decision.  Then again, CU may be right and Sterling may bounce, which would take some of the shine off it.  

As always, just MHO, DYODD etc etc.

ND

Update: and now there's this - 

"Sterling is winning the currency wars, having overtaken the yen as the world's worst-performing major currency this year, although economists suggested the pound's biggest falls could be behind it"

Wherefore the Pound now?

Now here is an excellent article. The world of forex trading is relatively alien to me. Everyone I know who does it professionally seems to work on the basis that you need a few millions to punt with and then try and take a tenth of a percent a day here and there and somehow make your self rich. It always sounded remarkably hard to me - although I am yet to meet a poor FX broker which suggests there know something I don't.

Also FX Trading lends itself well to technical analysis of charts - which is all very well and good but not one of my stronger points; my strategies in trading tend to be more focused around event driven moments.

However, as the link shows, perhaps now is one of those moments. With the AAA downgrade likely to have an impact on economic prospects, the most obvious suggestion is to say that the pound will fall further.

However, a glance at the various charts proves this to be unlikely, the fall has already bee fairly precipitous and the idea that somehow the Euro is a long-term stronger option that the Pound must be ludicrous given the contradictory strains present within the European Union.

The entire markets too are long on the Norwegian Kroner and Aussie Dollar (tipped here years ago as the place to be, of course), which will be positions unwound one day along with the Swiss Franc.

So there we go, everything in place for a contrarian bet and the pound to make a steady recovery...anyone buying this?