Posted on 08/30/2023 8:08:02 AM PDT by EBH
Both the Treasury and the BOE knew when the APF was implemented that its early profits (£123.8 billion as of September last year) would become losses as interest rates rose.
However, the pace at which the central bank has had to tighten monetary policy in a bid to tame inflation means the costs have risen more sharply than anticipated. Higher rates have driven down the value of the purchased government bonds — known as gilts — just as the BOE began selling them at a loss.
uly’s public finances data showed that the Treasury transferred £14.3 billion over the month to the Bank of England to cover the losses on its quantitative easing program, £5.4 billion above the figure projected by the independent Office for Budget Responsibility in March.
Sanjay Raja, senior economist at Deutsche Bank, noted that a total of £30 billion has so far moved from the Treasury to the central bank since September, and the indemnities are likely to continue to run well above the government’s forecasts for two reasons.
“First, interest rates have risen far above levels assumed in the fiscal watchdog’s spring forecasts. And second, gilt prices have fallen further – particularly in the longer end of the curve, resulting in further valuation losses as the Bank actively unwinds the APF through active gilt sales,”
(Excerpt) Read more at cnbc.com ...
Margin Call - on steroids.
I’ll never know why deadbeat China doesn’t have junk bond status from their refusal to pay even a single payment in many decades on the $1.6 trillion in Chinese bonds that U.S. bondholders own.
Isn’t this the bank that Soros nearly broke back in the early ‘90s?
Tax payer bailout?
Bank Account haircuts ala like Cyprus?
People, financial folks, I listen to have recently started talking depression by 2025. Not next year, we’ll just be watching the runup to it.
Depressions/Recessions are deliberately timed to fall under a Republican administration/congress.
George Soros’s indelible mark on UK runs deeper than Black Wednesday
https://www.theguardian.com/business/2023/jun/12/george-soros-indelible-mark-on-uk-runs-deeper-than-black-wednesday
Yet he will be forever known as the financier who broke the Bank of England by leading the speculative attack on the pound more than 30 years ago.
And with good reason. Black Wednesday, as it became known, was a seminal moment. It was the classic demonstration of the power of financial markets. What’s more, it led to a rethink of the UK’s entire economic strategy and the establishment of the inflation-targeting regime still in place today.
Cue the Duke Brothers.
L
BoE, BoC, Deutsche Bank, and a bunch of US regional banks are in for a ride.
Luckily we have all time high in CC debt, near low in savings, inflation, flat wages, and CRE to fall back on…
Yup—if you are the first one running out the door you are not panicking...
;-)
"The program ran from 2009 to 2022 and was designed to improve financing conditions for companies hit by the 2008 financial crisis. It saw the BOE accrue £895 billion worth of bond holdings while interest rates were historically low."
Profits go to the "private" while their losses go to the "public."
Seems smart until the public wise up to the scam and multiple Ponzis schemes.
When IceSave went bankrupt, Brits and Dutch who deposited "big" at interest offers which were impossible, the British and Dutch governments and big banks tried to pressure little Iceland to "back stop" IceSave's losses and turn it into "public debt."
Courageously and sensibly, the Iceland government instead arrested the IceSave scum bankers, and told the depositors in unsecured funds to pound sand.
That is the model all nations should follow.
See: https://en.wikipedia.org/wiki/Icesave_dispute
Worth a bit of reading for us all.
https://www.investopedia.com/terms/g/greaterfooltheory.asp
Quntative Easing = kicking the can down the road
Yes, in similar circumstances.
They just tried to fight the market forces and they lost (will likely loss again).
Soros got himself rich out of the money of British taxpayers!
Then he repeated similar strategies in Thailand, Malaysia and maybe somewhere else.
Soros is one of the few billionaires who made their money by making others miserable.
And over in Australia...their bank is going full WEF Climate Change.
The intergenerational report says climate is a ‘profound’ risk to Australia. But the full picture may be even worse
https://www.theguardian.com/australia-news/2023/aug/24/intergenerational-report-jim-chalmers-climate-change
Climate change and the way the world responds to it “may be the most profound driver of change” for Australia’s economy over coming decades, according to the latest intergenerational report (IGR).
The report is easily the most comprehensive attempt to quantify risks and opportunities, with an entire chapter devoted to climate change and energy. There is a fivefold increase in references to “climate change” versus the 2021 IGR, a similar ratio for “disasters” and triple the naming of “renewable”.
And, as reported on Wednesday, Treasury sought to put a price on costs, such as a loss in productivity amounting to as much as $423bn out to 2063 and falls in crop yields and tourism. But most long-term predictions tend to be unreliable, and this IGR recognises the challenges for projecting global heating’s impacts.
And then let’s just throw in some BRICS and a World War, ain’t we got some fun now? Oh and we can’t leave Covid out of this either.
yes, yes, yes...everything is fine and going as planned
Agreed.
As the days pass, I am becoming more sure of linking all the recent "developments" and corresponding new lingo being spread around to a same larger tide. A group of aligned interests -- an elite, for none of this is a grass-roots affair -- seek 'cooperatively' to control through such as mandates, lockdowns, debt, media manipulation and more. To further profit, since these aligned interests might sometimes contend with each other, but it seems a quasi-competition to carve up the little guys and gals and the rubes of this world into those who must work to pay on perpetual bonds. In a quite feudal way.
Consider: "A perpetual bond is a bond with no maturity date that is not redeemable but pays a steady stream of interest forever." More....
Source: https://www.investopedia.com/articles/investing/082313/perpetual-bonds-overview.asp
Compare and contrast this to indentured servitude, which at least had its time limits.
One reads -- "The idea of indentured servitude was born of a need for cheap labor."
Source: https://www.pbs.org/opb/historydetectives/feature/indentured-servants-in-the-us/
"...going full WEF Climate Change" in OZ must mean the population WILL be controlled. And under the force of law. As it could here.
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