1. A question about QE in a cashless society; during the current hoo-hah I’ve been hearing a lot about how quantitative easing is a potential tool in the Bank of England’s box. But how would this work when so many transactions are cashless? Can a central bank inject cash into the system without physically printing it? In a future fully cashless society, is QE a practical option?

  2. Yes. The BoE (or federal reserve in the US) just puts a couple 0s at the end of the banks balance sheet on paper. Cash doesnt mean anything to a nation states as thats a token of currency. Its a subtle difference to you and me but nation states spend money, not currency.

  3. From out of the country can someone ELI5 what is going on with the current economic situation and how Truss screwed it so fast?

  4. The international bond market basically took one look at a budget full of non-costed tax cuts and huge borrowing and basically said “Lol nah”. The collapse in gilts then almost pushed pension funds into insolvency as they were forced to sell to try and maintain solvency at slashed rates, so the BoE had to throw £65B at the gilt market to keep it from collapsing.

  5. Because I really don't know where else to turn. The right is dominated by them and the left wants to absolutely tax me and my family into the ground.

  6. At what point are we gonna stop putting up with this Tory government lol. If millions of people were willing to protest to get a second EU referendum, then why isn't there a similar protest calling for an immediate general election? The Tories have lost their mandate by electing Liz Truss - we need a general election now. Also I'm half worried that Liz Truss' plan is to damage the UK beyond repair before the next election, so the sooner we get rid of her the better...

  7. It could be because that protest didn't work? If there's one thing we've observed it's that this political party does what it wants, moves on, and only when the public and party will are coincidentally in alignment will it pretend to be representing the people.

  8. Late finish tonight and able to claim the hours back in the morning; given Truss is meant to appear across multiple platforms prior to when I intend to be up, I’d like to wish the pound well. Keep hanging on in there till I arise.

  9. Mad how Truss and Kwarteng had their moment in the spotlight, and then immediately and absolutely fucked it. And totally fucked our economy at the same time. In just a few weeks as well. It’s quite something.

  10. This is where Black Rod's powers should come in, and smite Liz and Kwasi down and restore order to... em? err?

  11. Bold of you to write a post that includes the words "Liz", "Kwasi" and "Black Rod", given the stickied post above.

  12. I don’t think so because they’ve proposed this as “not a real budget” when in actual fact it is “very much a real budget and a shit one at that”

  13. How have I only just realised that the Bloomberg newsletter I read most days is authored by Allegra Stratton, famous for being the subject of the video that started Partygate

  14. Yes - in 1924, the government was led by Labour with support from the Liberals following an election just 10 months prior. Prior to that 1923 election, there had been another election in 1922. The Tories had won that election fairly comfortably; the Liberals had split with Asquith and Lloyd George leading rival Liberal parties, and the seats needed for a majority had fallen following the end of the Irish War of Independence. Anti-socialist fears were always simmering as well - the USSR under Lenin was devoting a lot of effort towards fostering communist uprisings in other European countries and many continental countries had experienced them.

  15. Fiscal policy is government spending and the micro economy, monetary policy is managing the currency. and macro economy.

  16. Fiscal policy affects public finances. That’s money in, and money out, through government action. For example, creating a new tax, like a windfall tax, to pay for something, like a grant for citizens’ energy bills.

  17. Yeah. The BoE was putting up interest rates to stabilise the economy and try to bring inflation under some form of control whilst the government have put in an economic policy that will cause massive public borrowing.

  18. Government (fiscal policy) doing things that put inflation up while the bank (monetary policy) doing things to curb inflation.

  19. Yeah. Basically government fiscal policy (tax cuts) causing inflation. While Bank of England monetary policy (interest rate rises and unwinding Quantitative easing) reducing inflation.

  20. Let’s get real: Most Tory voters will happily slit their own throats as long as the people they don’t like die a slightly more painful death

  21. Not quite a loan. The bank is using it's own reserves to buy the gilts, but it's been indemnified by the treasury for any losses it may make on the deal.

  22. I know the mods hate this phrase but media supporting government policy that has already had a measurable negative impact is an indicator of a failed state

  23. It was brought up earlier on, but I want to see a paper with just the simple headline Trusterfuck and a picture underneath.

  24. Is this is assuming it’s our Blair currently or a clone of Blair circa 97 with all the qualities but none of the trappings of the events of his leadership?

  25. If only the Tories had someone as decent as Major in power now, Truss is an absolute lightweight in comparison.

  26. I now live a 10 hour flight away, but before the referendum I remember trying to explain to my FiL what a cluster fuck leaving the SM would be for my industry (I work in procurement in manufacturing and do a lot of import/export business). His response to anything I said was that the EU/US/whoever would be queuing up to cut trade deals with us because "we're the fifth largest economy in the world". Well, they weren't, and now we aren't.

  27. Chris Philp is Principal Skinner trying to blag his way out of admitting he burned the dinner. He's one step away from saying an aurora borealis is causing the lack of market confidence.

  28. Dumb question: shouldn’t we regulate the financial sector enough that a drop in bond prices doesn’t risk collapsing the entire economy?

  29. That regulation would be controlled and administered by the government. The present crisis is the direct result of decisions taken by the government. If they can screw up X, then they can screw up Y.

  30. The whole point of bonds is they’re supposed to be the safe low risk option. If bonds aren’t looking viable then something is going desperately wrong somewhere else. In short, you can’t plan for extreme stupidity

  31. So they've fucked the markets so much we've had a quasi Lehman moment, we've still got interest rates to go 5-6%, and the pound has been cratered. More than that a target is on Kwarteng and Truss' back, both from the markets and the party that elected them. And now there will be more spending cuts to facilitate tax cuts for the richest.

  32. This has started the ball rolling down the steepest hill it has even been rolled down. No stopping this now...

  33. Is Chris Philp the new Peter Bone who they just shove up on the late night news to bullshit their way through it

  34. Peston is fkn angry, finally seeing a Tory getting roasted for this fuck up. Peston is not putting up with his BS.

  35. If your expecting anything politically interesting in This England just know that all that is shown about the PM being in A&E is just an advisor getting mildly annoyed with a journalist asking for news.

  36. The NHS and Councils will essentially go bankrupt at some point if this carries on. People will start to lose their homes and there will be no one to catch them. This is an absolute nightmare.

  37. Funds putting 0.5% in bonds is meant to secure pensions, fuck me how do they get away with this drivel

  38. How can they say its all fine and going to plan and stuff is nothing to do with the mini-budget whilst also going AWOL and refusing to actually say that on the record.

  39. So if we were to put it in writing, how would our constitution stop rogue actors from destroying the country again? An x% drop in the gbp/usd rate triggering a no confidence vote? Automatically trigger a GE for every leadership change? An annual referendum on how fucked shit is?

  40. More evidence that the British are among the worst idlers in the world. He needs to get on her bike and be productive for the economy.

  41. Watching some of those Sunak clips that are floating around make me realise that what was mistaken for aggressiveness at the time of the debates now comes across as frustration.

  42. Had to put the heating on for a while up to 18.5c it's still quite cold and I prefer the cold weather. Most people aren't going to be very happy in a few months, including the boomers who have fond memories of scraping ice off the inside windows and playing conkers with their heads before that political correctness went mad

  43. I was in Central America for quite a while, coming back to the uk has been such a shock to the system. Didn’t bat an eyelid in the summer during the heatwave which was great, but feeling the cold now… My house is 18c and it feels like my toes are going to snap off. But it’s not October yet so I can’t turn the heating on.

  44. the only way they can get rid of her is if 40 odd Tory MP's grow some fucking balls and vote with the opposition in a Parliamentary VONC

  45. Exactly. Labour can appear as electable as possible and everyone is optimistic as hell but that doesn't change anything. We're stuck with Truss and co for two more years.

  46. When Johnson, May, and Cameron left it wasn't because of a confidence vote. A VONC is unlikely, but party leaders leave when their position is untenable and confidence votes, in Parliament or party, are just one way of making their position untenable.

  47. If one were to be called, what’s the snappiest a snap election could be called? Enough time has been wasted with the country falling apart around us already, and we can’t be going off on a three month election trail.

  48. Do you think Liz Truss and Kwasi Kwarteng have sat down, taken pause and gone "have we completely fucked it?", or do you think they're just completely delusional and believe it's all just global forces/the future labour government/whatever they're blaming next at this point and that kind of self reflection is completely beyond them?

  49. I'm convinced they thought it was an amazing policy that would totally overshadow the Labour conference and give the Tories a huge boost.

  50. Whenever I hear about a VONC, in my head it rhymes with bonk and consists of a comedic hammer for booping an underperforming PM on the head

  51. What will this currency crisis mean for natural gas prices? Are they going to get another 10% increase, it is too volatile to even measure?

  52. It’s a shame the Queen died because Liz might’ve set this in motion sooner and we’d still be in the 14 day free returns period.

  53. 'The UK central bank has intervened to protect the UK economy from the UK Government.' - Nicholas Watt quoting a Tory source on Newsnight. Wow!

  54. Because that's how the contracts work, they're entitled to x after paying in y. If we can break contracts because of a happening then why not b?

  55. Because somehow these pension schemes seem to be able to borrow money using gilts as collateral and then use it to buy more gilts and then borrow money using those gilts and then… and then if the price drops too much we have to bail them out or the entire economy collapses. We probably need to deregulate the financial sector a bit more though.

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