BRITISH POUND HITS NEW LOW AGAINST EURO: I BLAME BUSH!

BBC:

The pound fell to an all-time low against the euro after weak manufacturing data underscored a gloomy outlook for the UK economy.

Sterling dropped to its weakest since the single currency was introduced in 1999, at 75.86 pence to the euro, before later strengthening to 75.63p.

The pound also hit a 10-month low to the dollar at $1.9485 in earlier trade.

After a strong 2007, the pound is expected to weaken in 2008 as interest rates fall and the UK economy slows. The pound hit a 26-year high against the dollar last year, above $2.

... A weaker pound would make UK exports more competitive on world markets but it could also make imported goods more expensive and raise costs for Britons travelling abroad.

The problem for many economists is that the drop in the pound will not have an immediate effect on economic growth or manufacturing, forcing the Bank of England to cut rates throughout 2008, weakening the pound even more.

"While the fall in the pound is a positive, it is unlikely to provide a boost until late this year or even 2009," said Paul Dales of Capital Economics.

• THE MSM LOVES TO USE WORDS LIKE WEEK TO DESCRIBE CHEAPER DOLLAR AND POUND, BUT THIS IS PURE UNADULTERATED NEGATIVE SPIN.
• AS THIS BOTTOM OF THE EXCERPT POINTS OUT, A CHEAPER POUND IS GOOD FOR THE BRITISH ECONOMY.
• AS THE CHEAPER DOLLAR IS GOOD FOR THE USA ECONOMY.

BOTTOM-LINE:

• AS WITH ALL MACRO-ECONOMIC CHANGES, THERE ARE WINNERS AND LOSERS.
• CHANGES IN RELATIVE CURRENCY VALUATION CHANGES THE GAME, BUT IT DOESN'T SPELL DOOM FOR ANYONE WHO IS BRIGHT AND LIGHT AFOOT, SO-TO-SPEAK.
• BUSINESS IS ALWAYS FULL OF CHANGE AND GOOD BUSINESSMEN AND ENTREPRENEURS EXPLOIT THIS MOMENTS; THEY DON'T WHINE.

AND THAT'S A GOOD APPROACH FOR DEALING WITH ALL CHANGE!

PS: THE OVERLY STRONG EURO IS BASICALLY BAD FOR CONTINENTAL EUROPE - AND EXPORT ECONOMY.

PRODI AND SARKOZY - AT OPPOSITE ENDS OF THE POLITICAL SPECTRUM AGREE ON THIS.

ONLY THE ECB DISAGREES - EVEN THOUGH THE EXPENSIVE EURO HURTS THEIR EXPORTS AND EUROPEANS WORKERS.

GO FIGURE.

• ACTUALLY THE EXPLANATION IS SIMPLE: THE ECB IS MORE INTERESTED IN HAVING THE EURO BECOME THE WORLD'S STANDARD CURRENCY THAN IN HELPING THEIR OWN ECONOMY - AND THE WORLD'S.
• IOW: IT'S "DOLLAR ENVY".