Financial Times/Robin Wigglesworth/9-29-2022
“The UK’s wounds are to a large extent self-inflicted, from longtime issues like the yawning current account and budget deficit, to recent “own goals” like last week’s “fiscal event”. But it was unquestionably more vulnerable because of the Fed — the entire world’s de facto central bank — ratcheting monetary policy tighter and tighter.”
USAGOLD note: As has been the case repeatedly over the last couple of decades, the markets were completely taken by surprise when the source of UK’s systemic problems was identified. Wigglesworth digs deep into the UK’s crisis for those who want the details. Inevitably, it gets down to derivatives, leverage, and margin calls. When one considers where the blame lies as he outlines in the snippet above, it would be foolhardy to believe that there aren’t other, similar stress points pulsating out there.
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