UK Politics Thread (Part 2)

[Flobs]

What’s the relevance except whataboutism?

[odin_telamon]

Didn’t that then chancellor go on to state they saved the world ?

[redfanman]

@Flobs

Looks nasty as if BoE ends up with very low gold reserves it will be forced to buy gold with a highly weakened pound which will put even more pressure on the pound.

Why would it need to buy gold?

[Flobs]

The gold is used to buy pounds to prop up the pound. When that’s over it will need to replenish it’s gold stocks with the same weakened pound it was propping up. It’s the financial logic.
Of course the BoE could decide not to replenish it’s stock but that would be a fundamental error as the Tories are always devalueing and so you always need gold to stop the pound plunging to the bottom of the ocean, don’t you?

[redfanman]

@JU97ICE

I don’t get how this works. Are the only Conservative MP’s that had vision of the budget plans before the public announcement those directly in cabinet, or is there a larger group that saw it? Even then, how do 22 humans look at Kwarteng’s budget plans and say ‘yep, checks out’?

We’ve had the entire week prior to the announcement of economists saying that Kwarteng’s budget would be a very bad idea, and I didn’t hear any worry from the Tory MPs. Only when they announce the package and the pound does in fact tank as everyone predicted are they suddenly starting to panic.

Just more evidence of the Tory intelligence vacuum we have experienced since Brexit.

Not sure.

My impression is that few actually know what is being discussed and there are changes being constantly being made upto the announcements itself.

The leaks are often deliberate to gauge likely response.

[Kopstar]

@Flobs

What’s the relevance except whataboutism?

You referenced the danger that the BofE could end up with very low gold reserves, making the position for the pound even more precarious, and you don’t see the relevance of referencing how our gold reserves were significantly depleted under Gordon Brown?

Sheesh. There are people here who reference slavery and oppression committed under a monarch of more than 200 years ago to attack the current royal family, there are people here who reference a proposed ‘managed decline’ of Liverpool in the 1980s that never actually happened to criticise the current Conservative party, but refer to Brown selling off more than half our gold reserves in response to a point about the level of our gold reserves and suddenly it’s whataboutism…

The offer of a dictionary still stands.

[redalways]

Didn’t they do it because gold prices were too volatile, and subsequently reinvested it in a basket of currencies, which would have helped with stabilisation of the pound now?

Also, didn’t they actually sell it at pretty much what were market prices back then?

Loads of hindsight bias going on here when it’s pretty much obvious what the idiots in power were going to wreak on the economy.

[Kopstar]

@redalways

Didn’t they do it because gold prices were too volatile, and subsequently reinvested it in a basket of currencies, which would have helped with stabilisation of the pound now?

Also, didn’t they actually sell it at pretty much what were market prices back then?

Loads of hindsight bias going on here when it’s pretty much obvious what the idiots in power were going to wreak on the economy.

Whichever way you slice it, it was an extremely bad call. The gold was sold at a discount below the value due to the intention to do so being made public. That tanked the price of gold.

Of course, gold prices didn’t go south at all (as Brown speculated). Brown sold 56% of the reserves for $3.5 billion. Ten years later they would have been worth $11.8 billion. 20 years later they would have been worth $16.4 billion.

[redalways]

@Kopstar

Whichever way you slice it, it was an extremely bad call. The gold was sold at a discount below the value due to the intention to do so being made public.

Did he have a choice around making an announcement of such, i.e. could he have sold off that significant an amount without making such an announcement?

@Kopstar

That tanked the price of gold.

And yet he still managed to avoid selling it that much below the price of gold at the time of the announcement. The average was USD275/oz, compared to USD282.4/oz at the time of the announcement.

@Kopstar

Of course, gold prices didn’t go south at all (as Brown speculated). Brown sold 56% of the reserves for $3.5 billion. Ten years later they would have been worth $11.8 billion. 20 years later they would have been worth $16.4 billion.

Yes, because the 20 years of market history preceding that supported the view that the price of gold would skyrocket in the next 10 years.

EDIT:

Edited to add this graph:

SECOND EDIT:

Subscribe to read | Financial Times

Brown’s golden shot was not the miss his critics would have you believe

[Aurelio]

@Kopstar

Brown sold 56% of the reserves for $3.5 billion. Ten years later they would have been worth $11.8 billion. 20 years later they would have been worth $16.4 billion.

So pretty small numbers compared to the amount of borrowing this budget has committed us to… without anything to show for it

[redfanman]

@Flobs

The gold is used to buy pounds to prop up the pound.

But its only part of the currency reserve, so we have a choice when to buy or sell it if at all.

I might be wrong but the tonnage appears to be similar to that left from after Brown reduced its holding.

Ironically perhaps gold will be of greater importance going forward if the UK’s reputation continues taking a hit.

[Flobs]

@Kopstar

you don’t see the relevance of referencing how our gold reserves were significantly depleted under Gordon Brown?

No because it’s irrelevant to the current situation and hence off topic, hence whataboutism.
It has also been done to death many times.

To defend Liz Truss with such whataboutism as you have stinks of desperation. If I were you I’d rein it in.

Your examples are of no relevance to me. As I have pointed out repeatedly and for many tears on here, my concern is the Tories go to tool of devalueing the pound and all the concequences that has.

You wanted to take the discussion off topic with an irrelevant nonsense that indicates your lack of intelligence. I suggest you invest in an education!

[Flobs]

So you understood my point?

[Flobs]

@redalways

it’s pretty much obvious what the idiots in power were going to wreak on the economy.

That is what ‘we’ are predicting however there must be a small percentage chance that they know better than ‘us’ and are on to a golden age.

[Kopstar]

@Flobs

@Kopstar

you don’t see the relevance of referencing how our gold reserves were significantly depleted under Gordon Brown?

No because it’s irrelevant to the current situation and hence off topic, hence whataboutism.
It has also been done to death many times.

To defend Liz Truss with such whataboutism as you have stinks of desperation. If I were you I’d rein it in.

Your examples are of no relevance to me. As I have pointed out repeatedly and for many tears on here, my concern is the Tories go to tool of devalueing the pound and all the concequences that has.

You wanted to take the discussion off topic with an irrelevant nonsense that indicates your lack of intelligence. I suggest you invest in an education!

How is the amount of gold we have irrelevant to your point about potentially leaving gold reserves further depleted if we have to prop up the pound?!

If you just ignore how much gold we currently have then your remark is without context and entirely pointless.

As for defending Truss…where the fuck have I done that? You seem to read whatever you want to read. Your lack of comprehension is not something I can help you with.

[Flobs]

Get an education!

[Kopstar]

@odin_telamon

Didn’t that then chancellor go on to state they saved the world ?

Tbf, Gordon Brown’s legacy is very much a mixed bag. He was certainly key in getting the international community together to tackle the global financial crisis of 2008 and a lot of the steps he took to deal with that were sound.

Equally, however, public borrowing went through the roof and he failed to put money aside for a rainy day (as the Germans did), which left us hugely exposed when the (inevitable) financial disaster hit. The infamous, “There’s no money left” note that was left on the desk for the incoming coalition government in 2010.

[Kopstar]

@Flobs

Get an education!

How much more of an education do you think I need? Presumably a doctorate? Do you know of any universities that offer a doctorate in deciphering what the fuck you’re going on about?

[odin_telamon]

Like talking to LFC Eddie

[Arminius]

@Sweeting

I still have some debts to pay in the UK… Not sure whether it’s worth transfering dollars to £ now or wait another few days and see how bad it gets for sterling.

I think there is now a very real chance of a true run on the pound - those earlier comments about BoE independence now stand to cost the UK tens of billions. Either the BoE monetizes the debt or it gets into the disastrous position of having monetary policy work directly opposite fiscal, while also beginning a directly political conflict. There isn’t a good choice there.

I am not much of a believer in technical trading patterns, but for currency the symbolism of numbers can be somewhat more powerful. My gut says if the pound doesn’t rebound this afternoon, we will see parity this week.

edit: It looks like the markets think the BofE will have no choice but to intervene in an emergency meeting - the phenomenon of the pound plunging while interest rates are trending higher seemingly discounted as a one-off. Upward creep since the overnight lows. Fun times…