Northen Rock [Merged Threads]

Dithering_Dad

purch wrote: »

........your memory seems to be failing you.

The Bank didn't use the nations Gold Reserves in 1992..........they intervened in the FX markets, buying sterling in a vain attempt to 'buck the market' which as any fool knows is impossible !!!

This from wikipedia:

"Pound sterling's forced withdrawal from the ERM
The United Kingdom entered the ERM in 1990, but was forced to exit the programme in 1992 after the pound sterling came under major pressure from currency speculators, including George Soros. The ensuing crash of 16 September1992, was subsequently dubbed "Black Wednesday". There has been some revision of attitude towards this event given the UK's strong economic performance since 1992, with some commentators dubbing it "White Wednesday". Some commentators took to referring to ERM as an "Eternal Recession Mechanism", after the UK fell into recession during the early 1990s. The UK spent over £6bn trying to keep the currency within the narrow limits, spending the Gold reserves."

Looks like my memory doesn't seem to be failing me, smarty pants.

[Deleted User]

Purch, you have previously described yourself as having been a trader for a german bank IIRC. Your not scoring many points right now, if you dont know how money is created and dont know about as above...

noh

Dithering_Dad wrote: »

This from wikipedia:

"Pound sterling's forced withdrawal from the ERM
The United Kingdom entered the ERM in 1990, but was forced to exit the programme in 1992 after the pound sterling came under major pressure from currency speculators, including George Soros. The ensuing crash of 16 September1992, was subsequently dubbed "Black Wednesday". There has been some revision of attitude towards this event given the UK's strong economic performance since 1992, with some commentators dubbing it "White Wednesday". Some commentators took to referring to ERM as an "Eternal Recession Mechanism", after the UK fell into recession during the early 1990s. The UK spent over £6bn trying to keep the currency within the narrow limits, spending the Gold reserves."

Looks like my memory doesn't seem to be failing me, smarty pants.

Thats the problem with Wikepedia. Its written by its users and is not always correct.
What purch says is correct.
http://www.guardian.co.uk/EMU/Story/0,2763,210056,00.html

Nigel

Lavendyr

KTF wrote: »

That the BoE can just sit there and print as much money as they want.

Thoguh the thread has progressed since I last looked at it (commute home), I think this was in reply to me, in which case, I did not say that the BoE can just sit there and print as much money as they want. Nor do I think they would. Sorry if my post wasn't clear though.

[Deleted User]

noh wrote: »

Thats the problem with Wikepedia. Its written by its users and is not always correct.
What purch says is correct.
http://www.guardian.co.uk/EMU/Story/0,2763,210056,00.html

Nigel

I would very much doubt that at least some of the gold reserves were not spent over 1992. It doesnt say, 6bn was gold reserves it says 6bn and the gold reserves obv only a portion.

BoE is selling and buying a bit all the time

noh

Black Wednesday of Sept 1992 was caused by the governments intervention in the foreign currency markets. £xbn of foreign currency reserves were spent.
Purch is correct in what he says.
Its not wise to rely on Wikipedia.

Nigel

[Deleted User]

noh wrote: »

Black Wednesday of Sept 1992 was caused by the governments intervention in the foreign currency markets. £6bn of foreign currency reserves were spent.
Purch is correct in what he says.
Its not wise to rely on Wikipedia.

Nigel

Yes but was any gold reserves sold during the 1992 period, was this higher then usual? I dont know myself as i dont have that information but perhaps 6bn of foreign reserves were traded electronically and some gold was later cashed in perhaps to cover some of it later on?

Trying to force the markets... Nick Leeson and his 88888 didnt turn out too well for him in the end either.

PosterBoy77

ramborai1987 wrote: »

ive just invested 300 pound in northern rock at 440p with the idea of investing another 300 on monday.

do you guys think that was a good idea?

i mean their value is extremely low and i cant see them going bankrupt.

even if they fall again i wouldnt mind, but i would like to see them making good increases in the long term.

I think you are just gambling! NR has no business going forward. It relied on being able to borrow money cheaply and lend it fout or more. This is no longer possible as the debt markets have more or less closed. If a business no longer has a market, it will go under.

maypole

Just heard a financial person on Channel 4 news, tell Jon Snow that he thinks NR will probably be taken over in the next few days. Did I hear correctly?

PosterBoy77

marks87 wrote: »

Classic self-fulfilling prophecy.

A bank run is by far the easiest way to put one in trouble...and what better way to cause a bank run that to say it's already in trouble?

Those people in the queues need to hurry up and see sense.

The people getting their money out are the clever ones - they have nothing to loose and everything to gain. What advantage is there to keeping your deposit with NR? There is no upside to it. If it does go under, they may loose their money, and for many people they may never be able to earn it back. Whilst the BOE is providing unlimited credit to the bank at present, who is to say that it may withdraw it sometime. Why take the risk, however small it is?