You can always depend on traders to come up with great nicknames. For our next stop on our "world currency tour," we present you with our vote for the world's best asset nickname. Our stop is Great Britain.
For years, the letters "GBP" have signified "Great British Pound" in the investment markets… just like "USD" signifies "U.S. dollar." But as Tom Dyson profiled weeks ago, Britain's government has gotten so deep in debt, and treated its currency so badly, traders are now using GBP to signify "Gordon Brown's peso"… a knock on the country's prime minister and his financial bungling (and a knock on Latin America's time-honored tradition of currency crises).
For a picture of this bungling, we'll look at the GBP since 2009. The sovereign debt problems of Greece, Spain, and Great Britain became big news late last year. Since then, Gordon Brown's peso has lost about 8% of its value.
As Tom mentioned, Great Britain is just as broke as Greece or Spain… it's going to devalue its currency to make its debt payments easier… and this new downtrend has farther to run.
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