Defaulting banks - where will it stop?

[David Guyatt]

Jan, Jim Rogers is all over the Indy this morning with similar tales of despair. When will anyone in power move to regulate Hedge Fundsters who short sell and then talk the price lower?

According to the scumbag speculators - who should be strung up and shot - the Pound Sterling is finished... kaput... dead as the dodo....

http://www.dailymail.co.uk/news/article-...w-low.html

Sterling's finished, says Soros partner as the pound plunges to new low

By Nicola Boden and Bill Condie
Last updated at 4:28 PM on 20th January 2009

Sterling plunged to a seven-year low against the dollar today as one of the world's top investors warned the currency was 'finished'.

The pound fell more than two cents to hit a low of $1.3965 as traders reacted to the Government's latest multi-billion bailout of the banking system.

It is the first time sterling has dropped below $1.40 since mid-2001 and is on track for its biggest one-day percentage fall against the dollar since late 1992.

Less than a year ago, it was still trading at $2. Today, it was also down against the euro and the Japanese yen.

Jim Rogers, who made his fortune when he founded the Quantum Fund with billionaire George Soros, warned investors they should start dumping the pound.

He said: 'I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK.'

Maurice Pomery from IdeaGlobal in London added: 'The British economy is in deep trouble and investors are in no mood to hang around and wait for a pick up.

'Some are becoming increasingly disturbed by the cost of all this and how it will ever get repaid.'

The latest plunge came as new figures showed inflation fell for the first time ever in the run-up to Christmas, raising the dreaded prospect of deflation.

The Consumer Price Index, which measures the annual rate of inflation, fell at its fastest rate since the 90s recession between November and December, down a whole percentage point to 3.1 per cent.

Huge high street sales and the Government's temporary VAT cut helped push it down from 4.1 per cent in November, the Office for National Statistics said.

The drop, although not as large as analysts had expected, heightened fears deflation is round the corner if the Government's second banking bailout fails.

A Treasury minister has already warned the scheme to use taxpayers' money to insure the 'toxic' bank debts could last nine years.

Lord Myners told the House of Lords last night that it needed to 'take the financial markets through this economic downturn and through and beyond the next cycle.

'So we are probably talking about policy durations of not less than five years, probably not longer than eight or nine years.'

The Retail Prices Index, which includes mortgage interest payments, also fell dramatically, down from three per cent to 0.9 - its fastest drop for 28 years.

Graeme Leach, chief economist at the Institute of Directors, said: 'Inflation is most definitely yesterday's story.

'Unless the huge stimulus from the VAT reduction, record low interest rates, a falling pound and the collapse in the oil price begin to take effect soon, the UK will be staring deflation in the face.'

CPI is still well above the Government's target of two per cent but has fallen significantly from its 5.2 per cent peak last September just as the credit crisis began.

The ONS said the cut in VAT had the biggest effect on inflation, knocking one per cent off CPI in December, with greater early Christmas discounting adding to the fall.

Two-thirds of all shops passed on the temporary 2.5 per cent reduction launched by the Government in November.

Cut-price promotions have already seen a huge deflation on clothing and footwear, down 10.3 per cent in December, its lowest level since official records began in 1997.