The
pooh is hitting the City of London's fiscal fan.
No was always supposed to be a shoe in; I mean, when has a campaign ever over turned a 3:1 advantage for their opposition. The Westminster wonks shoogled their abacus, puffed on their crystal balls - giving them a polish and a quick look see, cut up a couple of chicken livers and other entrails then told their masters the Union was safe and as a result the UK Treasury told the world's finance markets not to worry their pretty little heads, it would be business as usual after the 18th of September 2014.
It appears the markets do not believe the UK Treasury anymore, they do not like the idea of that rUK Sterling debt pile with no oil and gas asset to under pin it and no currency union to bind it to Scotland. What is happening to Sterling, with the current devaluation going on, is the early days of capital flight as investors move to the dollar and other internationally trade-able currencies to reduce their exposure to Sterling.
The 'City' is increasingly worried the lack of a plan B by rUK outside of 'no currency union' will trigger more than a repositioning of capital to cover further drops in the value of Sterling, as has happened this week, but a Yes vote on the 19th will trigger a Sterling crash on the Monday 21st, when the markets open, which will make the ERM debacle in the 1990's look like a teddy bears' picnic as the Bank of England raises interest rates to 25+% in an attempt to halt or at least slow down the flight of capital out of the City of London (in the 1990's interest rates shot up to 29.5% for around half a day until the markets settled down and remained above 25% for most of the week causing untold damage to small and medium sized businesses cash flow - driving some to bankruptcy - and ordinary people already near the limit of their mortgage repayments into arrears they never recovered from).
Worse for Cameron, Osbourne and the rest of UKania is the Bank of England warned this was going to happen unless the UK-OK politicians stopped wittering on about 'no currency union', over two weeks ago.
A state of play report by NEF you will never see or hear of in the UK MSM or BBC has this to say about Sterling's problems:
"It is not due to Scotland leaving that a “sterling crisis” may threaten. It is due to the UK’s economic problems. Cumulatively, between falling incomes and rising debts, these mean we are already “one shock away from a further crisis.” Whether it was Eurozone stagnation, Scottish independence, or own property bubble collapsing, this is an economy almost designed to fail – at some point, and from some cause."
Beware of Geeks carrying gifts or a Sterling currency union - both could be potentially fatal.
No was always supposed to be a shoe in; I mean, when has a campaign ever over turned a 3:1 advantage for their opposition. The Westminster wonks shoogled their abacus, puffed on their crystal balls - giving them a polish and a quick look see, cut up a couple of chicken livers and other entrails then told their masters the Union was safe and as a result the UK Treasury told the world's finance markets not to worry their pretty little heads, it would be business as usual after the 18th of September 2014.
It appears the markets do not believe the UK Treasury anymore, they do not like the idea of that rUK Sterling debt pile with no oil and gas asset to under pin it and no currency union to bind it to Scotland. What is happening to Sterling, with the current devaluation going on, is the early days of capital flight as investors move to the dollar and other internationally trade-able currencies to reduce their exposure to Sterling.
The 'City' is increasingly worried the lack of a plan B by rUK outside of 'no currency union' will trigger more than a repositioning of capital to cover further drops in the value of Sterling, as has happened this week, but a Yes vote on the 19th will trigger a Sterling crash on the Monday 21st, when the markets open, which will make the ERM debacle in the 1990's look like a teddy bears' picnic as the Bank of England raises interest rates to 25+% in an attempt to halt or at least slow down the flight of capital out of the City of London (in the 1990's interest rates shot up to 29.5% for around half a day until the markets settled down and remained above 25% for most of the week causing untold damage to small and medium sized businesses cash flow - driving some to bankruptcy - and ordinary people already near the limit of their mortgage repayments into arrears they never recovered from).
Worse for Cameron, Osbourne and the rest of UKania is the Bank of England warned this was going to happen unless the UK-OK politicians stopped wittering on about 'no currency union', over two weeks ago.
A state of play report by NEF you will never see or hear of in the UK MSM or BBC has this to say about Sterling's problems:
"It is not due to Scotland leaving that a “sterling crisis” may threaten. It is due to the UK’s economic problems. Cumulatively, between falling incomes and rising debts, these mean we are already “one shock away from a further crisis.” Whether it was Eurozone stagnation, Scottish independence, or own property bubble collapsing, this is an economy almost designed to fail – at some point, and from some cause."
Beware of Geeks carrying gifts or a Sterling currency union - both could be potentially fatal.
Whether it was Eurozone stagnation, Scottish independence, or own property bubble collapsing, this is an economy almost designed to fail – at some point, and from some cause."
ReplyDeleteThe Euro is falling as we speak and pumping meg € into the economies by buyiing up debt everywhere in Euroland.
Scotland votes yes and it will be the slice gates opening rather than a squeaky bum.
sluice gates
ReplyDeletepredictive spelling