UNEXPECTED EXCHANGE RATE

by: MisS VictoriA DaviD

I don't know what to say, surely, I am not happy with the current universal exchange rate!

In the past, the exchange rate good for UK Sterling Pounds to Philippine Peso was very assistive to one's expenses. It was like saving you from debts, if you have one, and/or adding more money into your savings account. Nowadays, the rate is quite bad (pretty low) for us who are always sending money to our old folks in the Philippines. To give you a rough estimate of the diminution, it went down to almost 50 percent and up to now it shows no signs of recovery. What a nasty and unfavourable circumstances for us?

Instead of blaming the United Kingdom's government officials and also, giving myself a hard time and wrinkles. Nowadays, every time I am sending money to my beloveds I am always making sure of their primary needs first before giving them extra dosh for their vices. However and in the past (just to compare), I was just sending £ without thinking twice, it's because the exchange rate before could cover more than their essential needs in life. So, having hesitations in sending money nowadays is inevitable especially that things here, in general, are getting more expensive too.

I am still not loosing hope that one day or within this year, the very 'stabilising' exchange rate of yesterday will revert!

*Photo courtesy of gbp.fx-exchange.com

MR. MARKET

by: MisS VictoriA DaviD

The 'market' (bond, commodity, stock, FX, etc.) in general, is like a supernatural entity and it can bring down the Governments. For example, the USSR (Union of Soviet Socialist Republics) came crashing down and adapted capitalism from the ruins of the old system. Recently, the Argentine middle classes lost there 'shirt' as the value of the peso crashed, due to Government debt.

At the moment, why there is a Greece crisis it is because they cannot afford to pay the interest of the bond debts. The money every three months become due. The recent turmoil has been caused because successive Governments had borrowed too much and can't afford the interest on the loans. These loans are called bond that are traded in the market. As Greece didn't have the money to pay the interest on their bonds they had to ask the EEC (European Economic Community) and the IMF (International Monetary Fund) to rescue them. That is the historic debts!

Any new borrowing by Greece is now price at 15% per annum. This is much more than the country earns, so, there is no way to pay without going bankrupt. This is the cost of the crisis that the market will bring to the door of any 'Govt.' or 'person' who ignores it.

Don't be surprised if the Euro or Sterling drops in value because Greece problems are endemic in many European countries.