Pauline Yong : As I was re-reading her book "Fear and Grred" for past few days, I looked into her site, and 'discovered' her blog!! And surprisingly to know that she linked mine. Ghee ... I m flattered. Why such a successful investor, author and lecturer will read/follow my blog? Hmm ... yes, for pleasure reading, I do sometimes write in the light manner. And refer to her books!! I see those authors as my 'sifu'. So, thanks for the link, sifu-Pauline. Hehe.

So, readers ... please help yourself to get a copy of "Fear and Greed" or buy a copy for your friend who are investing, particularly in KLSE. I think I like the book very much as it speaks about market PSYCHOLOGY and brief. I could bring it anywhere I go, even when I do some business in the morning. Hehe.

Below is a writing taken from her blog about British Pound. The BIG difference between hers(or other financial sifus) and my 'writing' is ... theirs are fully with KNOWLEDGE of the subject, while mine ... err ... just for entertainment la. Understand arr? More reason to read my blog the last(after you read all the 50 blogs around) and when u need some entertainment, perhaps for laughter(the best medicine, u know) or if u need someone to err ... up to u la. Haha.

British Pound by Pauline Yong (22.03.10)

For those who has been keeping track of the British pounds will notice the recent rapid depreciation of the currency. Over a period of two years, the pound has fallen almost 30% against the ringgit. How nice if I could delay paying my MBA tuition fees!

There are many factors affecting the British pounds. The following are some of them:


1. Current account deficit

Since 1997, UK's current account has been in bad shape. Having a current account deficit means that the country is spending beyond their means, or they are importing more than what they are exporting. This will increase the supply of British pounds that subsequently reduce the value of the currency.


2. Fiscal policy

Over the years, the British government has been proposing a national budget that is bigger than before. The 2009 public spending on welfare and social security stood at 650 billion pounds which was equivalent to about 46% of the UK GDP. The unprecedented size of the UK budget deficit has in fact balked by many economists as that means more public debt to finance the budget deficit. As such, many believe that the sterling pounds will remain weak and it may eventually reach parity with the euro.


3. The Greece effect

As UK is located in the Euro zone not far from Greece who also has great appetite for debt. Many people suggested that UK will be the next Greece. However, that's not the case. Although UK is highly debt ridden with a debt of 60% of its GDP, but compare to Greece, this is much better as Greece's debt is recorded at 130% of its GDP!


Overall, the above are the economic reasons for the weak pounds, however there are other factors such as political scandals, the purchase of AIG by Prudential and so on that will definitely aggrevate the problem.