The Telegraph reports that the Pound is approaching parity with the Euro. Well, there's a shock piece of news, eh?
It ain't rocket science. If you print up more currency, the value of all the other pre-existing currency will reduce due to dilution. It's elementary supply-and-demand. You create significantly more supply, there'd better be significantly more demand or there will be tears before long.
When it comes to currencies, everything is relative -- because all currencies today are backed by nothing but promises and confidence. All governments are on a printing and spending spree right now. However, nobody is printing and spending on the public creditcard with more abandon than the UK government. This is the extremely simple explanation of why the pound has been sliding against all other currencies, it is of no surprise to me (or you, if you have been reading for any length of time).
It is also the extremely simple explanation for why people buy gold and/or silver, or some other tangible store of value, when push comes to shove and the government resorts to printing paper fiat money to cover their past and present mistakes. (And there have been a LOT of mistakes to be paid for over the last decade...)
Here in the UK we have massively increased supply of pounds in the system, and there is dwindling international demand for them at the same time. That is a deeply toxic brew right there! At some point, before too long now, the world is going to finally choke on this huge supply of pounds, and it'll puke them right back in Gordon Brown's face. I wouldn't be surprised to find that I wake up one day and the pound is worth half what it was the day before. Whatever you decide to do about this to protect yourself, don't keep all your eggs in Gordon's basket -- he will trample all over them without batting an eyelid. Then he will reverse back and run over them again and again. Finally after you die he will then take half of whatever you managed to keep hold of and thought you would pass on to your loved ones. Then he will finally be happy and leave you alone. Gotta love socialists, always looking after the little guy like you and me.