What To Make of The Weak Pound

A weak pound is alarming isn't it? After all Gordon Brown said 'A weak Pound is a sign of a weak economy'. Well that much is true, but misses the point. The reason a weak pound is a sign of a weak economy is because it is necessary to engender a recovery in that economy, especially when that economy's major trading partners are in a poor position too. To quote Mr Brown again 'This is a global recession' - also very true, and this is at the centre of why we need a weak pound. It is essential that we have an export driven recovery, and at that one that is based on goods and genuine services rather than financial tomfoolery. Our major trading partners (the EU, the US) are also struggling dreadfully in the current economic climate, therefore in order to stimulate demand that actually contributes to improving the balance of payments and the current account we need a competitive currency that will make it cheap to trade in British goods. Obviously we do not want the pound to go through the floor, due to the costs this will incurr upon our national debt, but this is to be paid off in the long term and if a weak pound helps encourage investment and expansion in industry the short term losses will easily be wiped out by longer term gains. My guess on the current movement of the pound is that it is simple currency specullation - traders know that it needs to fall to a certain, artificially low level in order to help us reorganise labour in our country, thus traders sell at what was a 'high' and will buy again once they feel it has reached the level that we need. To quote a certain Lance Corporal "Don't Panic".