Posted on 09/25/2022 8:21:35 PM PDT by Oldeconomybuyer
SYDNEY, Sept 26 (Reuters) - Sterling slumped to a record low on Monday, prompting speculation of an emergency response from the Bank of England, as confidence evaporated in Britain's plan to borrow its way out of trouble, with spooked investors piling in to U.S. dollars.
Broadening worry that high interest rates will hurt growth hit Asia's currencies and equities too, with exporters from Japanese carmakers to Australian miners hit hard.
The pound plunged nearly 5% at one point to $1.0327, breaking below 1985 lows. Moves were exacerbated by thinner liquidity in the Asia session, but even after stumbling back to $1.05 the currency is still down some 7% in just two sessions.
"You've got to buy the dollar as a risk off-trade. There is nowhere else to go," said Rabobank strategist Michael Every in Singapore.
"The BOE are going to have to step in today, surely, at which point everyone's going to end up with massively higher mortgage rates to try and stabilise sterling."
The collapse sent the dollar higher broadly and it hit multi-year peaks on the Aussie, kiwi and yuan and a new 20-year top of $0.9528 per euro.
(Excerpt) Read more at finance.yahoo.com ...
The global economy is largely the US economy and Biden is crushing it
Money marketers got too used to cheap money (low interest rates) for about 20 years.
That bubble was bound to burst one day.
Historically, around 6% interest was considered the norm until the early 2000s.
Now it looks as though the ‘sanctions’ against Russia are starting to make sense - we tell Europe that Big Bag Putin is about to attack Europe after he finishes off Ukraine, so Europe has to impose the ‘sanctions’, thereby crippling their own economies and crippling their own currencies.
Meanwhile, the US makes out like BANDITS.
Just blows my mind that the Europeans took our bait!
Actually it all makes sense now. If Europe begins to look like those shit hole countries, why would Putin want to bother invading Europe. That is why all those sanctions were imposed in hopes of discouraging Putin from invading Europe.
I think they call that 4D Chess.
The fallacy in your thought is that Mother Russia has shown she is incapable of invading Europe.
Mother Russia shot her wad in Ukraine. The world knows Her best weapon is a poker face bluff
Ooops......Wrong thread
Exactly. When I first became active in business the rate was around 6%
I worried we might not survive the early 70’s as rates rose and business dried up
We did but it was a tremendous struggle
We are, once again, the least bad house in a bad neighborhood.
The least stinky shirt in the laundry pile.
There’s more, but you get the idea.
Walter Wriston said this back in the 80s. There is nowhere to go. It all comes back to us.
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