Author Topic: Why the fall in the Pound has nothing to do with Brexit  (Read 5188 times)

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The Prophet

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Why the fall in the Pound has nothing to do with Brexit
« on: October 22, 2016, 06:40:24 am »
Since the financial crash in 2008, the Bank of England has created money out of thin air, a process known as "Quantitative Easing" – basically buying government debt (Gilts) with new money.
So how much has been created? 
Some will be surprised to learn that total QE so far is at £375bn.
That equates to £6,250 for every person living in the UK.

This has enabled to government to keep on borrowing as QE has lowered the interest rates paid on this borrowed money, by stoking up demand for Gilts, which increased prices and subsequently lowered yields.  This in turn has created a pension deficit time-bomb for many of Britain's biggest companies and yields on Government Bonds (Gilts) have fallen and fallen.

So when the Governor of the Bank of England forecasted the pound would fall if Britain voted to leave the EU was he right? Considering he has ultimate control over the value of the pound he can surely make his prophecy come true. 
By cutting the BoE base rate by half to 0.25% and at the same time ruling in more QE he has single-handedly caused the pound to fall.
If he had announced a doubling of the interest rate to 1%, the pound would have risen against other currencies as investors piled in for better rates.
In short, Carney is making his forecast of doom come true.
In the process, the Government is free to borrow and spend, in the full and certain knowledge that the BoE will buy up its debt, with yet more created money and so it goes on.

But sooner or later the wheels will come off.  Your money will be worthless.
Britain will have high inflation (above 10% maybe even 50%) and everyone will be trashed.
It won’t be due to the markets, or the global economy, or even Brexit.
It will be down to an incompetent arrogant central bank and government monetary policies.
We’re all going to hell in a hand cart!
You heard it here first!  No one else wants you to know!