I am wondering about UK gilts again!!

There are warnings about a run over the British pound and I suppose UK gilt prices will wilt if this happens. However, if things get really bad economically and if we have deflation, then the relatively guaranteed income streams of UK government bonds
would become really attractive.
A mate of mine thinks Canadian dollars are a good bet because they are not printing extra. What do I know about currencies? SO, JUST TO REITERATE THIS IS NOT AN INVESTMENT ADVICE COLUMN although I love waffling about investments.
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I suppose I would have to hide the Canadian dollars under the bed since foreign currency bank accounts are not a mainstream product in the United Kingdom.

PIBS look a bit of a risky investment.

The PIBS issued by UK building societies look a bit of a risky investment with the possibility that coupons will not be paid. The rescue of West Bromwich Building Society has shown their true position in the pecking order for creditors and it is not good. The securities were bought for their yields but unfortunately the yields have gone up.
The PIBS of demutualised building societies converted into perpetual subordinated bonds. While the Nationwide, the flagbearer for the industry, is offering a running yield of 11 pct on its issue of 7.25 pct according to the Investors Chronicle, which highlights the risks and rewards of this area. The original investors in the Nationwide issue have taken a battering on the capital performance of
the PIBS.
This is an esoteric part of the market and perhaps not one for many financial advisers.
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Financial advisers are going to have to get used to charging fees.

British financial advisers (IFAs)are going to have to get used to charging fees
from the end of 2012 rather than charging commission. The UK regulator the Financial Services Authority (FSA) estimates compliance costs of £430m and an additional £40m of annual ongoing costs for the £12bn investment advice industry. This is according to the Sunday Telegraph.
The FSA wants all investment advisers, whether independent or connected to a bank, to obtain a qualification equivalent to a first year at university.
However, the Association of British Insurers (ABI) wonders about the complexity of
options such as independent advice, restricted advice and basic advice.
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I think the complex area of pensions will prove a rewarding area for IFAs. I have had to transfer sums from a company pension and I had to have a personal financial adviser to handle the transaction. The British tax legislation is so complex you really need your hand holding.

Public sector expenditure cuts are on the horizon.

In the United Kingdom public sector expenditure cuts are on the horizon. David Cameron, the Tory leader, has finally got a grudging admission from British premier Gordon Brown. There was a thoughtful article in today's Daily Telegraph, which argued that the main problem is collapsing tax revenues. Currently, benefits outstrip
income tax revenues but I don't know if Labour will get away with their trick in
2005 of winning the election then sharply increasing stealth taxes.
I think UK Chancellor Alistair Darling is praying for a quick end to the recession but he is not helping his reputation for honesty by not having a comprehensive spending review.
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To be fair to the UK, other countries are in similar situations such as Spain, Greece
and Italy. In Ireland, there have been tough spending cuts. However, we are in electoral limbo and this is exacerbated by Gordon Brown's seeming determination to struggle on until 2010. This is too long given the cabinet's propensity to implode.
I don't think we can have another ministerial reshuffle. An October general election might be better for Labour.
Also, Shadow Chancellor George Osborne might find it difficult to promote austerity measures when it is perceived he comes from quite a privileged background. Labour will be relentless about Old Etonians, investment versus spending cuts and the fact that some Tory policies don't stack up. Apparently, its educational policy is quietly
collapsing.

Another return to the tricky problem of emerging markets.

Forgive me if I return to the tricky problem of emerging markets, which are seen by some as a key area for future investment. Developed economies will not be able to match their growth rates and investors putting something away for their retirements should for collective investment schemes in emerging markets. However, I can't see these emerging markets paying out dividends to their former colonial masters. Also, the West is still the final buyer of quite a few goods from the emerging markets.
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The United States has exported quite a bit of its industry to the Far East but Obama might persuade American corporates to bring it back. We have outsourced call centres
to India but these could easily be brought back, especially if unemployment rockets.
This is probably not very free trade but the U.S Congress has already introduced "Made in America" legislation, which has upset Canada.

Paul Krugman says UK economy is well-positioned.

The distinguished U.S economist Paul Krugman says the UK economy is well-positioned compared with its European counterparts due to policies such as low interest rates.
He gives a lot of credit to British Prime Minister Gordon Brown.
However, the UK economic landscape has changed radically.
It is good to be positive but the City of London will not be a major producer of tax revenues while the car industry in Britain is getting a real battering. Exports will not be helped by a recovery of sterling against the euro and the dollar.
If the "green shoots" of recovery consolidate, then we will have to work out how to pay the bill for the UK government's borrowings. Some commentators are predicting ten years of higher taxes and lower public spending.
Some observers say the banking sector is now stable. However, Royal Bank of Scotland
(RBS) and Lloyds will be quite interested in getting down the state holdings and possibly less interested in refinancing British industry.
However, building societies seem vulnerable and the Nationwide cannot rescue them all. The recent downgrades in their credit ratings will possibly persuade the building societies to reduce their lending so as to improve their financial strength.

I am trying to consolidate two small pensions.

I am trying to consolidate two small pensions into one small one after expenses, charges etc. The charges are quite expensive but I have not got much choice. One of the two will disappear, if I don't take action by August. My financial adviser recoomended a lifestyle one, which moves into cash at the end of the term to provide some protection.
Let's hope it will perform. The financial adviser said the annuity rates were very poor at the moment so it did not make sense to get an annuity and especially at my age. I wish the charges were lower, since they hit investment returns. I suppose that
in many cases gross investment in pensions produces little after charges.