Warning about country bail outs

hedger

http://www.moneyweek.com/news-and-charts/economics/why-the-banks-could-bust-britain-14622.aspx

:eek:

Reaper

What about the UK itself? The pound has been plunging as international investors have got the jitters about British banks' $4.4trn of external liabilities.

Or not...

Maybe the writer should look at the markets. People were spectulating about parity with the dollar but it is currently trading at a healthy £1 = $1.44

Likewise talk of parity with the Euro is fading as the Eurozone starts to look weak too and the Euro has been in decline.

Yes countries could go bust, but there is precious little evidence in this article to justify their "sell while you can" advice.

hedger

to be fair to moneyweek they have been pretty accurate so far about forecasting what is gonna happen. wish I hada listened to them 6 months ago

GeorgeHowell

Of course countries like Ireland are going to reassure everyone that their money is safe. If they said otherwise a run on their banks would become a self-fulfilling prophesy. But remember this is also what the Icelanders said until days before it all came crashing down.

One might have sympathy with people who have term bonds in non-UK banks and can't readily get their money out, even if they want to. However, people who could withdraw but don't, or worse still are putting money in now in order to chase a pittance on the interest rates are foolhardy in the extreme.

If there is a another disaster, in Ireland or elsewhere, then such people deserve no sympathy whatsoever from the rest of us. And they certainly deserve no taxpayer funded bailout, which I'd be pretty sure would not happen anyway because they have been warned enough times now.

chrisweb

Its not an isolated opinion. There's more here:
http://www.webtvhub.com/bankrupt-britain/
- look on the second page for all the people calling U.K bankruptcy.

However, U.K bankruptcy, while in no way good, makes people think the whole system completely collapsing, everyone going back to a bartar system and martial law.

The U.K went bankrupt in the 1970s and had to be bailed out, so it is not the end of our civilization or the fall of the UK. It just most likely means the average person getting screwed.

Reaper

Many assume that Britain is going to end up much worse off than other countries, while Europe and Asia smugly sit back and pat themselves on the back that they didn't come unstuck doing all the risky stuff we did. However that is not how things have been panning out recently.

Here's an article from yesterday's Observer
http://www.guardian.co.uk/business/2009/feb/15/europe-recession-euro

My purely personal view is that most people have been under-estimating the size of the recession while a minority have been over-estimating the chance of whole economies going bankrupt - particularly the UK.