DIRE Warning from Bank of England: "You have 3 Days Left."

oh boy basically the Jerome Powell of

the United Kingdom this is Mr Andrew

Bailey over at the bank of England just

told quote funds and firms you've got

three days left

that's right see the United Kingdom is

undertaking this really kind of

unprecedented approach that could quite

frankly spell disaster but it's being

undertaken to avoid disaster ah as if it

couldn't get even more complicated so

look here's basically what's going on in

the United Kingdom okay the United

Kingdom's like crap we're going into a

depression so Mr Boris Johnson's

government gets laughed out of office

because people are like dude you had a

party during covid you're a hypocrite

Okay bye so he leaves no lady comes in

Liz truss first thing her exchequer uh

this is like they're kind of like their

treasury secretary first thing he does

uh the exchecker of the exchange is says

you know what we're gonna cut taxes for

rich people and we'll send stemi checks

for uh the energy crisis we're facing

and we'll cut taxes on buying real

estate because we're a nation of

entrepreneurs and and we're gonna

basically just stimulate the economy and

the markets are like no no that's like

that'd be like Joe Biden right now

literally coming out and going another

two thousand dollars did we check oh

wait that's exactly what California is

doing with inflation relief stimulus

checks but then again California is not

exactly the best example of what should

be done after all they're still building

a train to nowhere

the bullet train

just don't even start on that so anyway

now because of that and the this

discovery that the their treasury

secretary basically went partying with

hedge funds after he reduced their tax

rates that night uh the popularity of

the new English government is lower than

that of Boris Johnson who is laughed out

of office

not a good start to an Administration

that's barely 30 days old anyway

now

after the result of all this pandemonium

that came out in the markets where

basically people like okay wait a minute

so you're going to try to stimulate

while at the same time you're keeping

rates low you're going to create so much

extra inflation that you're going to

have to raise rates and place so much

catch up because rates are so much lower

than where they are in the United States

you're going to have to pay play so much

catch up not only are we thinking you're

going to have to raise rates by a full

one percentage point Come November but

we think even at then you're gonna be

way behind the curve so what we're going

to do is we're just gonna dump our bonds

because remember bonds have a coupon

rate associated with them and so the

bond Market's basically like this sucks

go to cash like the bank of England and

and the government are just dumb dump

and so they start dumping everything

well that obviously leads to prices of

things going down the British pound

becoming basically the British peso okay

bad joke it's been overused but whatever

this is what a lot of people were saying

the value of it felt and nearly parity

with the dollar which is insane that's

basically where one dollar equals one

British pound we haven't seen that

forever I think my childhood it's always

been like a two to one ratio uh oh you

know in 2021 it was like a buck 40 is

how much a pound cost now it costs you a

buck nine uh like a dollar nine cents

it's it's pretty low it's Fallen a lot

uh and so people like screw it why why

invest in any kind of bonds in the

United Kingdom when we could just dump

the British pound go buy the dollar and

get a quote unquote risk-free four

percent on 10-year treasuries or like

4.5 percent on two-year treasuries what

are we doing wasting our time

with this with this government that on

one hand is trying to stimulate and cut

taxes

because we're a nation of entrepreneurs

and on the other hand

they're they're breaking the pound

market and then in order to solve the

currency disaster they're creating and

the bond market they're destroying

they're saying you know what we're going

to print money

but now

now they've created yet another

deadline

or problem I should say and the problem

is the deadline see today Andrew Bailey

who is the uh basically the Jerome

Powell of the bank of England which the

bank of England is not like JP Morgan

and Chase okay it's the central bank

it's like the Federal Reserve okay so

when you hear Boe think fat

Andrew Bailey comes out and says

yeah uh this is a message to funds and

firms involved you've got three days

left you've got to get this done that's

a quote that is a quote of what he said

he said quote we've announced that we

will be out of the market I imputed the

market part we've announced that we will

be out by the end of the week that's

because they announced they're going to

do an unlimited bailout of basically

buying as many bonds as they can to

basically try to create a floor of the

price of these bonds that everyone is

bailing out of because remember how I'm

saying hey like why bother with with the

United Kingdom when these bonds are

going to become a lot more worthless

when the bank of England realizes they

have to raise rates a lot more and when

rates go up the value of existing bonds

go down goes down so let's just dump

those now right so what you have going

on

is you have these Bonds in England that

are plummeting in value and the bank of

England is basically coming in saying

hey look look look look we will buy an

unlimited amount of these and it will

effectively create a floor price where

nothing can go below that because

anytime we just touch the valuations of

certain bonds at this level we'll just

buy them well the bank of England is now

saying

um heads up we're removing that floor on

Friday so uh fair warning good luck

everybody okay

this is where things could potentially

get really dirty because when the floor

gets removed anybody who has like these

firms and institutions who have not yet

liquidated their bonds don't have a

floor price anymore and that means if

they need to frantically get market

value for their bonds they might well

they're not going to have the backstop

of essentially their fed and so they

might get a substantially reduced market

value

and when those people get a

substantially reduced market value

everybody else who's kept Bonds on their

books and who hasn't dumped them already

is going to have to take Mark to Market

losses because the value of their

portfolio as hodlers or Diamond handers

will be going down into the hole and all

of a sudden Equity ratios at Pension

funds and firms and anybody holding on

to bonds will be totally out of whack

and you'll probably start seeing some

cracks now go no guarantees but there's

a risk that in the next two to three to

four months in the United Kingdom you

could start seeing serious pension fund

bankruptcies business bankruptcies or

just straight up municipal government

failures right local governments just

starting to fail go bankrupt we saw that

in California in 2008. doesn't surprise

in California but anyway

this is kind of scary because Friday is

that deadline so if you needed another

thing to kind of think to yourself about

like oh my gosh what else do we have to

pay attention to because this is already

pretty venomous well

the bank of England is yet another

really really nasty one they're telling

you Friday now they're still gonna be

buying on Friday

but come next week

now see Friday Also happens to align

with a coupon expiration for the

programs on building your wealth that's

linked down below of course lifetime

access remember some of the lifetime

access goes away but next week and the

weeks Hereafter could be really critical

for the United Kingdom because here's

the thing if we end up seeing the bank

of England say hey look we're out

and now all of a sudden you start seeing

bankruptcies that's going to have a

ripple effect throughout the entire

United States because even the United

States companies hold exposure to

businesses in the United Kingdom and if

businesses in the United Kingdom

potentially go bankrupt then it makes

you wonder is this sort of like the tip

of the iceberg where when one thing

Falls and all of a sudden let's say ten

thousand people lose their jobs because

Credit Suisse fires a bunch of people

over the you know at the Credit Suisse

and that's different from England but

the same thing sort of happens in

England

then all of a sudden that's 10 000

people who are not getting paid who now

have to fire their handy folk their

construction workers cancel their real

estate contract they stop spending money

on travel and goods and services and

house cleaners and and fuel for their

car because they're like oh hunker down

honey we're screwed

it's bad and so then you have a real

economic depression that you start

creating at the same time as still

having extremely high inflation

so now you're really in a stagflationary

environment where the central banks have

to make this decision okay well do we

just try to bail out those firms or do

we fight inflation and at this point it

seems like the choice is going to be

sorry you're gonna have to go bankrupt

and so those businesses go bankrupt and

at the same time they continue to fight

inflation while crushing and destroying

demand you're just going to create a

stagflationary depression and the bank

of England

and the United Kingdom could potentially

be the tip of the iceberg here we

thought we thought it was China

no

China is just they're already in a

depression

the bank of England now we're starting

to hit a little closer to home because

we actually have monetary systems who

are not necessarily coordinated but they

are at the same time trying to hike

rates to Stamp Out inflation China's

actually not doing that China's trying

to stimulate but not over stimulate

they're already so deep in the doodoo

that they're already in stimulation

world they're like we're not worried

about inflation because uh we don't even

have an economy right now like it's just

bad but if this video isn't about China

so watch the United Kingdom

because this three-day warning

it's just not good it's going to lead to

more pain and tenuousness in the markets

again we we will we could potentially

see more of a flight

uh to U.S bonds because of this disaster

in the United Kingdom now interestingly

that could actually lower yields on you

know the U.S bonds because if you get

more buyers in the United States that

can lower yields temporarily uh and

that's also what happened last time

around but I mean bonds today the

10-year today is up at 3.94 and this is

despite the fact that say you know

people think you know there are a lot of

institutional investors coming over to

buy American bonds

well

as soon as the fed's quantitative

tightening actually hits and if we get a

Miss on the CPI read on Thursday

oh it could be ugly no I hope not I hope

not

um

no I mean best case scenario we just get

you know like a 7.5 read on Headline CPI

and uh and and we go you know we start

solidifying a bottom we don't want to

say back to the Moon that so far has

been bad karma anyway thanks so much for

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