Sliding down the Rabbit Hole?
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Hi Folks,
Sliding down the Rabbit Hole:
Thing is if the BoE continues to do nothing about the slide of the pound, by following a traditional policy of devaluation since the 1930s which has had mixed results such as 1970s ‘stagflation’, it maybe forced to suddenly raise interest rates possibly very hard to stop a total collapse. That event would wreak havoc with all that outstanding debt, and given the UK’s position in international finance could crash the system entirely. If foreign investors get spooked, they could reverse their taste for London property bargains and suddenly see nothing but risk and dump all their sterling assets, and not just property. The debt mountain would implode and the QE press would blow up trying to fill it. Rather than finding that having an ‘independent’ currency has benefits of controllability, it maybe the case that circumstances hijack that very controllability leaving a no win situation, or rather the realisation of the inevitable…
L,
Sid.The Queen could always make Lloyd Blankfein a knight if things got really desperate. Then Sir Lloyd could perform some of his God’s work on the poor currency and save them. He would no doubt know how to run the shorts, and he and the queen could also do a massive score in the forex markets as their heavenly reward for doing the work of the lord.
“There will always be a London”, so they say.
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