"Run on Britain"..?

Old Mar 7th 2009, 10:01 pm
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Default "Run on Britain"..?

Dire statistics indeed...God knows what will happen if the "run" continues as there´s still $6trillion held by overseas depositors.

http://www.independent.co.uk/news/bu...y-1639413.html

A silent $1 trillion "Run on Britain" by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK – that is monies held in the UK on behalf of foreign investors – fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London.
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Old Mar 8th 2009, 8:51 am
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Smile Re: "Run on Britain"..?

Possible but unlikely.

Ask me again in six months when the bank situation has stabalised a little or continued to slide. If the economic outlook doesn't improve dramatically in '09 then UK plc. could be in trouble. You can go on borrowing for so long but in the long term "there is no such thing as a free lunch" and that debt obligation will outstrip the UKs future ability to pay . Taxes are not an infinite source of revenue.
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Old Mar 8th 2009, 9:12 am
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Default Re: "Run on Britain"..?

Originally Posted by bimcnorth View Post
Dire statistics indeed...God knows what will happen if the "run" continues as there´s still $6trillion held by overseas depositors.

http://www.independent.co.uk/news/bu...y-1639413.html
Yes. And massive demand for US dollar coming in next 12 months apparently.

Low rates are saving UK businesses but killing the UK - they might need to increase rates to get some money flowing back to save the pound (which will almost certainly cause unprecedented pain in the economy).
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Old Mar 8th 2009, 4:17 pm
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Default Re: "Run on Britain"..?

Originally Posted by mantronic View Post
Yes. And massive demand for US dollar coming in next 12 months apparently.
According to a recent article in FT, US fund managers apparently hold $30 trillion of domestic and foreign securities, compared with the estimated $7 tr of foreign currency reserves managed by the world's central banks.

Quote
Having increased their share of overseas assets from about 12.5 per cent at the start of the decade to a high of 26 per cent last summer, risk averse US funds reduced that share to 23 per cent, where it has remained so far this year.

Mansoor Mohi-uddin at UBS says further reductions in the proportion of their portfolios held in overseas markets and the subsequent repatriation of capital will help the US to continue to fund its current account deficit and thus support the dollar this year.

Furthermore, he says, long-term portfolio allocation data for all US investors shows global shocks historically have caused US investors to steer away from overseas markets for several years.
Unquote
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