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Ambrose Goes Really Negative

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http://blogs.telegraph.co.uk/ambrose_evans...riously_alarmed

"The slide in sterling has turned "disorderly".

We can argue over whether or not the first phase of devaluation acted as a shock-absorber for a badly mismanaged economy, providing a cushion against debt deflation and the housing crash. But the latest dive has a very malign feel.

For the first time since this crisis began eighteen months ago, I am seriously worried that British government is losing control.

The currency has fallen five cents today to $1.39 against the dollar. It is now perched precariously on a two-decade support line -- the levels tested in 2001 and 1992. If it breaks that line, traders may send it crashing down towards dollar parity.

The danger is blindingly obvious. The £4.4 trillion of foreign liabilities accumulated by UK banks are three times the size of the British economy. UK foreign reserves are virtually nothing at $60.6bn. (on this, more later in a piece I'm writing today)

If the Government is forced to nationalise RBS and perhaps Barclays with their vast exposure in dollars, euros, and yen, it risks being submerged. It is one thing for a sovereign state to let its national debt jump in a crisis -- or a war -- perhaps even to 100pc of GDP. It is another to take on foreign debts on such a scale with no reserves. Yes, the banks have foreign assets as well to match the debts. But how much are these assets really worth?

This is the moment when the "rubber hits the road" -- to borrow from American argot -- the moment when the reckless debt experiment of our economic and political leaders comes back to haunt.

We cannot even do what Iceland did to save its skin. Reykjavik refused to honour the foreign debts of its buccaneering banks. It let them default, parking the losses in Resolution Committees. Small islands can do that. Iceland has fish instead, and lots of metals.

Britain cannot follow suit. The debts are too big. If London takes such disastrous action it will set off global panic and lead to an asset death spiral, drawing the entire world into deep depression.

What have our leaders wrought? The reckless conduct of City, the fiscal incontinence of Gordon Brown (3pc deficit at the top of the cycle), and the pitiful regulation of the UK housing boom have all combined to bring the country to the brink of disaster.

The England has not defaulted since the Middle Ages. There is a real risk it may do so now.

And no -- just so there is no misuderstanding -- it would not have been any better if Britain had joined the euro ten years ago. The bubble would have been just as bad, or worse, as Ireland and Spain can attest. We have our disaster. They have their disaster. When the dust has settled in five years, when we can make a proper judgement on the sterling-EMU issue. Not now.

The Baby Boomers have had their moment in power. The most spoilt generation in history has handled affairs with it characteristic hedonism. The results are coming in.

The blithering idiots."

eek!

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The Baby Boomers have had their moment in power. The most spoilt generation in history has handled affairs with it characteristic hedonism. The results are coming in.

The blithering idiots."

Bloody 'ell

Aunt Jess is going to have a coronary - In a tory rag too!!!

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The danger is blindingly obvious. The £4.4 trillion of foreign liabilities accumulated by UK banks are three times the size of the British economy. UK foreign reserves are virtually nothing at $60.6bn. (on this, more later in a piece I'm writing today)

That bit is interesting, I was wondering what the foreign bill was going to be. It's all looking a bit Iceland to me. As an STR, I would be concerned about my stash but house prices will still crash proportionally.

Isn't it better to let the banks fail, bail out the depositors with £'s and then let any surviving banks pick up the pieces, Northern Rock if necessary. Anything else looks like voluntary euthanasia.

Let the investors pay for a change, not the taxpayer.

We did that for the car industry and came out stronger.

VMR.

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If London takes such disastrous action it will set off global panic and lead to an asset death spiral, drawing the entire world into deep depression.

Now that's what I call a house price crash.

If we can just keep world trade going, I think I can handle an asset death spiral.

VMR.

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I was thinking the same thing. Its very much a baby boomer attitude. Screw everyone else except me, lets keep the party going until I'm 6 foot under then who cares.

Obviously Brown is loosing control. He will be carted out of office in a straight jacket before this is all over. Why the hell am I as a taxpayer being exposed to dodgy oversea's loans made by greedy oafs in the city. Absolutely bloody scandalous.

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What have our leaders wrought? The reckless conduct of City, the fiscal incontinence of Gordon Brown (3pc deficit at the top of the cycle), and the pitiful regulation of the UK housing boom have all combined to bring the country to the brink of disaster.

I think he's sobering up a bit

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I was thinking the same thing. Its very much a baby boomer attitude. Screw everyone else except me, lets keep the party going until I'm 6 foot under then who cares.

Obviously Brown is loosing control. He will be carted out of office in a straight jacket before this is all over. Why the hell am I as a taxpayer being exposed to dodgy oversea's loans made by greedy oafs in the city. Absolutely bloody scandalous.

You would have been no different.

HPC is a good example of the UK population - strut around when they think they are clever then scream like babies when it all goes wrong. You haven't experienced the 'when it all goes wrong' bit, but it's coming.

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http://blogs.telegraph.co.uk/ambrose_evans...riously_alarmed

Britain cannot follow suit. The debts are too big. If London takes such disastrous action it will set off global panic and lead to an asset death spiral, drawing the entire world into deep depression.

Is little britain that influencial?

& isn't the pit bottom inevitable anyway, whichever route is now taken?

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I was thinking the same thing. Its very much a baby boomer attitude. Screw everyone else except me, lets keep the party going until I'm 6 foot under then who cares.

Naah it's very much a HUMAN attitude.

Nick Leeson wasn't a boomer. The traders on the floor at Enron weren't boomers. Most sat at trading desks shorting the cr*p out of ailing banks without a thought for the consequences aren't boomers. Most EAs aren't boomers.

Just ridiculous to point the finger (and counterproductive in terms of addressing the real issues) at a certain demographic when the truth is this behaviour is a consequence of a consumerist, materialist culture which places riches and profits above anything else.

We've mostly all bought into it unquestioningly.

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Britain cannot follow suit. The debts are too big. If London takes such disastrous action it will set off global panic and lead to an asset death spiral, drawing the entire world into deep depression.

In that case the World will come to our aid! Crisis over! Woo hoo.

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It has been in finance - until now...

Exactly. So now it's close to being only another banana state why would its implosion affect the rest of the world to such a degree?

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Exactly. So now it's close to being only another banana state why would its implosion affect the rest of the world to such a degree?

Because of the size of the implosion - going back to London as centre of the financial universe!

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Articles in the mainstream press suggesting the possibility of default whatever next??

Joe public will be asking WTF default means!!!!

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Exactly. So now it's close to being only another banana state why would its implosion affect the rest of the world to such a degree?

Problem is that at that level of exposure (£4trn mentioned on a different thread) any default by the UK would cause problems to spread throughout the world. You seem to forget that, apart from the US, the UK's businesses and citizens have the largest foreign investments of any country, If we default, then some of those assets will be confiscated.

I am sure that I read somewhere that there are more current/former UK citizens now living abroad than for any other first world country. Again if we default it is quite plausible that the affected countries will not act with magnanimity to any current or former UK citizens living in their country

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time to unilaterally revalue the remaining 250 tons of gold that kn0b head didn't sell off at £500,000 per ounce.

At roughly 30k ounces per ton I make that about 3.75 trillion pounds to play with. Our assets then nearly cover our liabilities.

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http://blogs.telegraph.co.uk/ambrose_evans...riously_alarmed

We cannot even do what Iceland did to save its skin. Reykjavik refused to honour the foreign debts of its buccaneering banks. It let them default, parking the losses in Resolution Committees. Small islands can do that. Iceland has fish instead, and lots of metals.

[b]Britain cannot follow suit. The debts are too big. If London takes such disastrous action it will set off global panic and lead to an asset death spiral, drawing the entire world into deep depression.[/b]What have our leaders wrought? The reckless conduct of City, the fiscal incontinence of Gordon Brown (3pc deficit at the top of the cycle), and the pitiful regulation of the UK housing boom have all combined to bring the country to the brink of disaster.

The England has not defaulted since the Middle Ages. There is a real risk it may do so now.

eek!

I don't agree.

There will be no choice but to default - Brown or Cameron, both of them bankers bitches, will try to take on the debts of the banks in our names. Once the public understand what they're doing then Guy Fawkes will return, and he'll have serious backing this time. I'd help, and so would many others.

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Because of the size of the implosion - going back to London as centre of the financial universe!

I was just kinda hoping you wouldn't say that..................but I knew you would :)

It's this Future Wasteland Britain scenario I've been involved with, it seems so real ....

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Britain cannot follow suit. The debts are too big. If London takes such disastrous action it will set off global panic and lead to an asset death spiral, drawing the entire world into deep depression.

Good name for a band.

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Problem is that at that level of exposure (£4trn mentioned on a different thread) any default by the UK would cause problems to spread throughout the world. You seem to forget that, apart from the US, the UK's businesses and citizens have the largest foreign investments of any country, If we default, then some of those assets will be confiscated.

I am sure that I read somewhere that there are more current/former UK citizens now living abroad than for any other first world country. Again if we default it is quite plausible that the affected countries will not act with magnanimity to any current or former UK citizens living in their country

Well they left of their own accord. So phuck em!

If they want to ponce around with Johnny Foreigner then don't come bitching and moaning when it all goes wrong. Like any other investment they should weigh up the risks before poncing off to their "home in the sun".

Are they sending their income tax back here? Are the 'eckers like.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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