The pound on top

 

The pound is today trading at the top of its post-Brexit referendum range against the euro near €1.20.

Credit default swaps (CDS), which measure bankruptcy risk on five-year UK debt, are a well-behaved 23 points, 

lower than for the US (31), France (35), Canada (40), China (55), Italy (56), Saudi Arabia (62) and Brazil (171).

The notion that Britain may soon need an IMF bailout akin to the sterling crisis in 1976 plays fast and loose with historical context. 

“It is nonsense,” said Dario Perkins, global strategist at TS Lombard.

Denis Healey was borrowing in dollars, which the Bank of England cannot print, in order to defend an indefensible exchange rate. 

Nor is this anything like the ERM crisis in 1992, when the Bank of England had to raise rates to 15pc during a deepening recession and a property crash,

in order to defend sterling against the D-Mark just as the Bundesbank was on the war path over Germany’s reunification boom. 

Cardinal lesson: never subcontract your monetary policy to another country by pegging your currency.

Ambrose Evans-Pritchard Telegraph 12 February 2025

https://www.telegraph.co.uk/business/2025/02/12/stop-moaning-economy-in-better-shape-than-it-looks/

Trump, Englund och sedelpressarna

Trump: People say I want to default on debt - these people are crazy.

First of all you never have to default because you print the money 

"If interest rates go up, we can buyback debt at a discount if we are liquid enough as a country. 

https://englundmacro.blogspot.com/2016/05/trump-englund-och-sedelpressarna_10.html

Kronkursförsvaret 1992

https://internetional.se/iccab92.htm

Tillbaka till Rolfs länktips 13 Februari 2025

https://englundmacro.blogspot.com/2025/02/rolfs-lanktips-13-februari-2025.html