The British economy may experience significant recovery in 2013 owing to a series of circumstances related to the pound sterling.
Predicted UK Economic Improvement
One of the biggest problems weighing down the UK economy is the over-valued pound sterling. As the pound is basically a debt-based currency with no real support to uphold its artificially high value, it is likely to drastically fall against other major currencies on the exchange market, and this downgrading of the British currency will probably come about as a result of continuing economic collapse.
The positive aspect in this is that it will determine a marked fall in UK unemployment and an increase in exports. Imports will fall, the trade deficit will become narrower and possibly even turn in Britain's favour, becoming a trade surplus. There are some very good reasons to support the view that the super-pound, one of the biggest woes affecting the United Kingdom's economy, is finally about to undergo a thorough shearing process, reflecting more the image of a down-to-earth British pound than the hitherto overgrown sheep disguised as a lamb as we currently know it.
Britain's Gold Reserves
The UK's gold reserves amount to 310 tonnes all weighed and counted. This is a far cry from Germany's 3,400 tonnes of gold reserves, Italy's 2,450 and France's 2,435 tonnes. Even Portugal has 382 tonnes of gold reserves, 72 more than Britain, while the Netherlands have 612 tonnes, almost twice the amount the UK can boast of. Portugal and the Netherlands both have a significantly smaller population – and economy – than Britain, too!
And the United States of America can account for over 8,000 tonnes of gold reserves.
The logical conclusion in the comparison of gold stocks is that the pound sterling is unable to fall back on a monetary back-up system, whereas Italy and France, which each have a population and an economy similar in size to Britain's, both have eight times more gold reserves. These two countries, and also Germany and the Unites States of America, could use their gold stocks to back up their currencies, namely the euro and the US dollar. The USA could even use their enormous strategic reserves of oil and gas as a supplementary backup to further strengthen the dollar, whereas the now defunct British Empire does not offer Britain any control over the once abundant gold and silver mines that used to fill London's Treasury and palaces.
And how much is gold worth today? Well, with gold steadily increasing in value and close to 2,000 US dollars per ounce, this means that one tonne of gold bullion is worth between 60 and 65 million US dollars.
Revaluation of Currencies
The present financial world crisis is likely to see Britain's major economic competitors use their national gold stocks to support their currencies, thus leaving a debt-based pound with a 1 trillion pound UK Public Debt, a trade deficit and a banking system in rapid decline. Eurozone countries can count on many hundreds of billions of dollars worth of gold bullion, as too the USA, with Britain by comparison reaching a mere $18 billion.
And while Britain's North Sea oil and gas reserves are in dire decline, Greece has oil and gas reserves estimated in trillions of dollars!
So, if the pound sterling should fall in value against the dollar and the euro, perhaps by 50-75%, this should result in Britain's minimum wage, once calculated in euros and zloties, being far too insignificant to attract millions of Eastern Europeans to the UK.
British jobs would go to British people, imports would become too expensive, whereas exports would rise. Unemployment in the UK would fall, and the housing market would be free of the massive influx of Eastern European workers, thus reducing the cost of rent and the cost of mortgages.
The enormous strains on the National Health Service and on education owing to mass immigration would be greatly alleviated, and the costs of the UK benefit system would be enormously reduced as millions of British people find work.
There would be no more incentive for seasonal workers from Eastern Europe to come flocking to the Promised Land of Sheer Bankruptcy and find employment so as to send their income home, while paying hardly any tax worth mentioning on their minimum wage, but exploiting in full every social service offered in the UK.
In short, come the devaluation of the pound sterling, come Prosperity!
Written by D. Alexander