As the charts below show, the JAMAICAN DOLLAR IS IN FREEFALL versus the US dollar. As the charts below also show, it’s just hit a NEW HIGH AGAINST STERLING.

Exchange rate, JMD/US$

I’m no maths genius, but to me this suggests that the UK is in serious, serious trouble.

Exchange Rate, JMD/GBP

Now I don’t want to be harsh to Jamaica, but I’m afraid I must be for the purposes of highlighting how much trouble the UK is in. Here are some of Jamaica’s economic and political lowlights:

• Current account deficit at 23% of GDP

• 136% of GDP external debt

• 4% of fiscal revenues go to creditors

• US$1.8bn in reserves (10 weeks of import cover)

• Highest murder rate in the Western Hemisphere (62 per 10,000 in 2007)

• Gets decimated by hurricanes on a regular basis

I’m sure you’ll agree the place has its problems. Here’s how the UK compares:

• The government is asking us to spend our way to prosperity, when we’re already riddled with debt

• So-called economic stability has given way to the biggest credit and housing bubbles of all time

• The authorities have failed to acknowledge their key role in creating this mess

• A lack of gold reserves after our Chancellor sold them at historic lows

It turns out that’s all you need for a currency collapse. I’m done ranting now, just had to get it off my chest. On a serious note though, I think the pound is on something of a precipice. Taking on the debts of these huge banks could be the anvil that breaks the sterling’s back. Last month the UK government cancelled 43% of Jamaica’s debts – I think we should ask for it back.

Tags: dollar, Jamaica, Jamaican Dollar, sterling, UK
Posted in: Currencies, General, Latin America, UK
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