A phrase used for a dozen years in the UK to deride any attempt to spend money on nice things, repeated dutifully by every political reporter and the state broadcaster is, "there's no magic money tree."BREAKING:@bankofengland: “ will carry out temp purchases of long-dated UK government bonds from 28 September. The purpose of these purchases will be to restore orderly market conditions.”
— Ed Conway (@EdConwaySky) September 28, 2022
“The purchases will be carried out on whatever scale is necessary to effect this outcome.”
Lads, they found the magic money tree.
They're now both fighting inflation and fighting a spike in government borrowing costs. If you want to give them credit for being clever, it's "raise short term rates and lower long term ones," but I don't think that's a trick they can pull off.
...after I typed this, but before it published, they stopped the "raise short term rates" part.
Right wing economics hits reality, blows up the economy yet again, but somehow never loses its credibility.
As for this:
I honestly can't think of a obvious scenario such that pension funds would be blowing up, unless they were hideously mismanaged, which of course some of them are. Somehow "hedging" (making small side bets to reduce risk) became synonymous with "leveraging" (borrowing immense amounts of money generally to try to make large amounts of money on tiny swings in risky assets) so the discourse around this is all fucked up.I'm told by a city source it's hard to overstate how serious the situation is today. There is concern over the health of pension funds and this is why the Bank of England has acted
— Sam Coates Sky (@SamCoatesSky) September 28, 2022