Pound Falls Further After Bank of England's Emergency Move - Breaking News

[LawrenceChard]

Pound Falls Further After Bank of England's Emergency Move - Breaking News

This may affect all precious metal pricing in pounds sterling.

https://www.bbc.com/news/live/uk-politics-63056188

The Bank of England has announced it will step in to calm markets after the government's mini-budget causes the pound to slide
The Bank says it will buy government bonds on a temporary basis to help "restore orderly market conditions"
The pound tumbled to $1.0560 after the news, down 1.6% against the dollar
It comes as financial leaders react to the International Monetary Fund's criticism of the UK's tax-cut plan
The IMF says the £45bn proposal will "likely increase inequality" and suggests a fiscal statement in November could be a chance to "re-evaluate" the changes
UK Chancellor Kwasi Kwarteng has strongly defended the tax cuts - he is meeting with investment banks today

Watch this space!

😎

[Bluenitsuj]

Meanwhile Truss seems to be missing in action......

[sixgun]

The UK Gilt market is crashing.
As an example the 40 year Gilt has collapsed - last December it was around 100 and since had fallen to 25.
The markets are not confident about the Truss Government - they expect as i do she will be a transient visitor to number 10. This puts the Tory Government in peril. You get a run on the pound and a vote of no confidence is not far behind. Truss was chosen b/c the other candidates were 4th division players as well. The market is not just unconvinced by Truss but they have a sinking feeling thinking about Sir Keir who doesn't even know what a woman is. Imagine him and the Ginger Minge leading the country. 

UK pension funds hold large amounts of Gilts - the value of funds has evaporated. i hear that some pension funds are now insolvent. The price of Gilts is falling and there are no buyers - so the BoE has had to step in.

The BoE has spoken of QT (quantitative tightening - off loading government securities) - what we see here is big time QE. They cannot stop creating currency - which of course is just petrol on the fire by inflating the money supply.
As Gilts fall, Gilt yields rise. This puts pressure on the BoE to raise interest rates - we have been hearing about another interest rate rise. A 0.1% just wouldn't do - it would have to be a decent jump. The problem then is the property market Ponzi scheme is put in jeopardy. 
We would be looking at a full scale financial crisis. A currency crisis with a housing market collapse. Let's imagine Sterling went into free fall. Gilts prices would collapse further - who wants to hold UK Government paper when the yield paid in GBP is worth less and less? The rising Gilt yield is the market saying interest rates must rise and the BoE would have to do that to support Sterling. The mortgage rates rise. When we have had what amounts to ZIRP - a zero interest rate policy for over a decade, even small increases in mortgage rates make huge percentage changes in repayments. We would see an avalanche of mortgage defaults and forced property sales.
At the tail end of last year we saw headlines like Lloyds Bank aiming to become giant UK landlord - in my mind this was telegraphing that Lloyds - Halifax were expecting what we see now and expecting to scoop up fire sale repossession properties. The property market talks about small falls in property prices - they don't want to do otherwise for fear of triggering panic. 

i have been expecting this - i have been expecting blood in the street. Now let's see.

Edited September 28, 2022 by sixgun

[sixgun]

1 hour ago, Bluenitsuj said:

Meanwhile Truss seems to be missing in action......

Look here she is - last seen practicing manoeuvres on Salisbury Plain.

Edited September 28, 2022 by sixgun

[sixgun]

Looks like the guys on The Duran agree with me. Alexander suggesting this could cause the break up of the Union @Minimalist

 

Edited September 28, 2022 by sixgun

[Minimalist]

1 hour ago, sixgun said:

this could cause the break up of the Union @Minimalist

The break up of the Union is inevitable.

[sixgun]

1 hour ago, Minimalist said:

The break up of the Union is inevitable.

The Minimalist and his Weegies preparing for the border checkpoint to Alba.

Edited September 28, 2022 by sixgun

[Minimalist]

1 hour ago, sixgun said:

The Minimalist and his Weegies preparing for the border checkpoint to Alba.

[sixgun]

The end of cheap money: is this finally it for UK house prices?

[sixgun]

One Tory's view on dropping tax rates for top earners.

[Darr3nG]

3 minutes ago, sixgun said:

One Tory's view on dropping tax rates for top earners.

BS! https://en.wikipedia.org/wiki/Rosie_Holt

[sixgun]

5 minutes ago, Darr3nG said:

BS! https://en.wikipedia.org/wiki/Rosie_Holt

Shush - don't spoil it.

[Darr3nG]

Just now, sixgun said:

Shush - don't spoil it.

In fairness, I saw it earlier and did a double-take! Wouldn't surprise me if one of them didn't come out with this!