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Great British Pound Collapse

Posted on October 27, 2022October 5, 2022 by cryptoagrocash

Now as disappointing as Link’s price action has been it’s nothing compared to the price action of the Great British pound, one of those words is clearly redundant, which has been absolutely brutal.

My beloved British pound fell by a full four percent against the US dollar last Monday.

That’s more than most coins on that day.

God Save the King, indeed in all seriousness it’s important to remember that the pound has been falling against the US dollar for decades.

This has been the case ever since the pound stopped being the world’s Reserve currency around World War one.

Note that the US dollar became the world’s Reserve currency after World War II, since that time a series of crises have taken the pound ever lower.

This time it was the UK’s energy crisis, specifically the UK government’s response to said energy crisis.

Our new prime minister and her Chancellor saw it wise to simultaneously spend billions of pounds to subsidize energy while also cutting taxes for the rich.

This is called burning the candle at both ends and it’s a concept that many people in power don’t seem to be familiar with, that’s probably because they’ve never had to live with the consequences of their decisions.

In this case that was the sudden insolvency in the UK debt Market which threatened UK pensions.

The UK’s currency crisis also threatened BlackRock which in turn threatened to Halt trading of UK government debt on its platform.

For reference BlackRock is the largest asset manager in the world and there’s no way in hell it’s going to lose money because of some BS government policy.

Anyways the bank of England subsequently bailed out the bond market and vowed to do whatever it takes to protect the pound from completely imploding.

So far so good, but it’s quite possible that the worst is yet to come.

That’s because the UK is facing an energy shortage like the rest of Europe.

Given that all international trade is done in US Dollars, the UK will have to sell large amounts of British pounds to get the dollars, it needs to buy energy this will further suppress the pound.

At the same time the bank of England is way behind the curve on inflation interest rates are a measly 2,25 while inflation continues to flirt with the double digits.

Meanwhile over in the states the FED continues to flex its muscles and is dedicated to crushing inflation at all costs.

At the end of the day it doesn’t matter though because all Fiat currencies are doomed to fail, the British pound happens to hold the record as the longest surviving fiat currency, it’s been around for over 325 years, but that doesn’t mean it’s immune from economics and human fallibility.

The moment you give a person the power to print currency eventually that power will be abused to a point.

That said currency becomes worthless, this has been proven time and time again throughout history and it’s a lesson that many countries are going to learn the hard way in the not so distant future.

Posted in Articles, Crypto NewsTagged gbp

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