Friday 15 May 2009

Quantitative Unease

Frank Field MP
"£25bn in debt has been successfully sold this year - leaving about £200bn to be offloaded. What will happen if the Debt Office tells to the Treasury, then to the Prime Minister that the market is refusing to buy? ....Please God the day will never come, but if the Government cannot shift its debt even at higher interest rates, it will have to act that evening before the markets open the next day.Failure to do so will see the value of Sterling plunge through the floor. In attempt to safeguard the currency the Government will be forced into a slash and burn policy with respect to public expenditure. It might also be forced into forming a national Government. It may even have to adopt both approaches."

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