Hi All,
By way of update on my post yesterday: so The Bank of England has intervened quite dramtically by 'suspending' its decision to sell of its pile of British government bonds (Gilts) and is in fact going into the market and buying up £65 billion of new government debt. The result was an immediate relexation of yields and the pound actaully rose to 1.09 to the dollar. As I noted yesterday, part of the issue is the government being able to sell the vast quantities of debt it needs to get by, without the short position for the entire UK's energy bill and unfunded tax cuts being factorted in. I would also say that the market- being global- is extremely crowded. It isn't just the UK, but the Fed (US) and the ECB (Europe) who are looking to also unwind the massive amounts of debt they bought using printed money for a decade. The chickens of this untested policy, whose main effects have been to give the wealthy even more (hedge funds in particular), are now coming home to roost.
And this time the auesterity that will come (at best in 1/2 years or just after the next election, maybe sooner thanks to this shower we've got at the moment) could be Greek style...
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