Sterling crisis looming

I have been forecasting the collapse of the British Pound for quite some time and I am very bearish on this currency (last post was in March 2009: GBP to be devalued by 50%-70% within next 6-12 months). The recent rally in the GBP, which follows the rally in Equities and Bonds - the market playing the V shaped extremely fast recovery - is so ridiculous that I took it as an opportunity to increase my short position and I have kept capacity to do so for the time being.

Now it seems like other people are getting worried about the GBP (Jim Rogers has been extremely bearish on it, but as far as I know, he's one of the only guru openly predicting the collapse...) so it's refreshing to see this kind of report on Bloomberg:
June 30 (Bloomberg) -- The state of the U.K. economy fills British financial historian Niall Ferguson with foreboding.

“The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,” the Harvard University professor says.

Ferguson’s concern stems from the deterioration in the U.K.’s public finances, which prompted Standard & Poor’s to warn on May 21 that the country could lose its AAA debt rating. The firm estimated the cost of propping up Britain’s banks at 100 billion pounds ($166 billion) to 145 billion pounds and said government debts could double to almost 100 percent of gross domestic product by 2013.

Chancellor of the Exchequer Alistair Darling said on April 22 that this year’s government deficit would hit 12.4 percent of GDP. Alan Clarke, a London-based economist at BNP Paribas SA, expects it to reach 17 percent of GDP in 2010.

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