Bank of England rolls out money printing press to tackle serious retirement problems

The collapse of the pound and government bonds forced the Bank of England to immediately turn on the money printing presses. Fund managers at England’s largest pension fund received a “margin call” on Wednesday, meaning they will be liquidated if they don’t put up more collateral soon.

Bank of England steps in

The Bank of England had to intervene immediately to prevent the bond market from falling into a deadly vortex. “The Bank of England’s intervention was necessary to avoid a vicious cycle that could force pension funds to sell their positions,” said Claus Mackenzie, a partner at Aon Investments.

The swift and significant response from the Bank of England is testament to the extent of the slump in pension funds and bond markets. Clearly, if pension funds are forced to sell, the UK bond market could crash outright. This was prevented by the intervention of the Bank of England.

In principle, pension funds use historical data from their risk models. With this, they can determine how much risk they can take with leverage etc. The problem with this is that you will always be surprised by the unique situation, which seems to be the case at the moment.

The Bank of England said it would provide “as much help as possible” if there were “significant risks to UK financial stability”. So it’s a complete emergency, the central bank has to print a lot of money, and on the other hand it’s trying to fight inflation.

What does this mean for Bitcoin?

Sterling is collapsing, UK government bond yields are rising above Italy and Greece, and central banks must step in to prevent more pain. Against this backdrop, the country must also contend with high inflation. We’re talking about a dark scenario for the UK and just hope the country can recover from it.

In principle, this is another example of where your money is not safe anywhere. The entire traditional financial system is closely linked, and in principle only Bitcoin (BTC) is completely separate from this. For many, such an event can be a wake-up call to the question “What is money?” A very important question for understanding Bitcoin.

So the Bank of England is now doing quantitative easing while *raising* interest rates.

You can’t make up these things.

— James Lavish (@jameslavish) September 28, 2022

James Lavish sums up the story nicely with the tweet above. “So the Bank of England is now printing money and ‘raising’ interest rates at the same time. It’s hard to figure it out yourself,” Ravish said. I personally have nothing to add to this.

The traditional financial system creaked and central bankers tried to fix everything with thick tape. In any case, Bank of England policy is no longer up to scratch. Fight inflation with higher interest rates on the one hand, and open the currency tap to rescue the bond market on the other.

Source of information: Compiled from CRYPTO-INSIDERS by 0x information.The copyright belongs to the author Thom Derks and may not be reproduced without permission

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