The Collapse of the UK is WORSE Than Feared.

wow the liquidity crisis in the United

Kingdom must be so terrible for what

just happened to be happening uh folks

you might remember that over the last

few weeks some crazy stuff has been

going on in the United Kingdom so bad

that the bank of England had to come out

and say hey we will do an unlimited

bailout by as many bonds as we need to

for the next X days and when there were

three days left the the governor Andrew

Bailey of the bank of England came out

and said look Pension funds you've got

three days left and that's because so

many Pension funds were reeling from

margin calls and they're dumping their

bonds although they didn't even get as

many bonds sold as they wanted to only

about 19 billion dollars worth of bonds

when the bank of England was expecting

to have to buy about 100 billion the

bank of England's like all right well

this is all you got but to maintain the

bank of England's credibility at the

same time as Pension funds were still

freaking out saying no no no we need

more time and the bank of England's like

sorry you're out of time the government

of the United Kingdom decided to do

something completely different

and it tells you how bad the liquidity

crisis must have actually been so

remember the liquidity crisis in the

United Kingdom all started because this

new prime minister came in in early

September and by mid-september her and

basically her equivalent of the treasury

secretary came in with a ton of tax cuts

and stimulus which implied that

inflation was going to go to the moon

and as a result Bond values plummeted

people like screw this out of here and

they start dumping their bonds leading

the prices of bonds to fall like crazy

well the bank of England steps in to set

a floor that floor goes away on Friday

which implies that potentially today the

bottom could fall out right

if bonds kept falling in value but what

happened before that could happen

well this guy Jeremy Hunt comes in

Jeremy Hunt is the new Chancellor of the

exchequer okay that's their treasury the

secretary and boy oh boy this should

make you realize how close to dirty

things must have actually really gotten

like this should make you want life

insurance which you can get in as little

as five minutes by going to metcaven.com

life you could even Apple pay or Android

pay for it anyway what Jeremy Hunt did

completely destroyed and probably ended

Liz truss's career it gutted her

government almost every single one of

the prime minister's campaign promises

is gone we went from the biggest tax

cuts in 40 years to the largest tax

hikes in 70. I kid you not

but guess what happened to the bond

market

well you have to wait a minute while I

go through what they did and I'll tell

you what happened to the bond market and

it's insane because it's brilliant it's

absolutely freaking brilliant listen to

this so here's what they did

they said hey look we still want to

incentivize the economy but we went a

little bit too far too fast so instead

of going too far too fast in the

stimulative direction

let's go in the opposite direction

actually make 32 billion dollars of more

Revenue I think it was 36 billion

dollars 32 pounds but anyway so they

said pretty much everything Liz truss

announced is getting reversed

energy price caps are being paired back

and stayed until April one two top tier

income tax rate is staying at 45 instead

of being reduced to 40 number three

corporate tax still going up to 25 in

April instead of staying in 19 number

four uh oh this is the part where we're

gonna raise 36 billion dollars and

stability is the most important thing

above everything else number five the

income tax plan for uh any any other

income brackets is shelved indefinitely

number six the tax cut on alcohol is

dropped number seven the one point two

five percent tax cut on dividends is

dropped number eight vat free it's tax

free tourist shopping dropped they are

keeping some limit to the National

Insurance increase that means less

spending on their version of Social

Security we just got like an 8.4 Cola

increase cost of living adjustment here

in America but anyway uh the cut to the

stamp Duty for Real Estate that's

staying that actually helps some real

estate stocks go up like four percent in

the United Kingdom today uh seed

Enterprise Investments sticking around

company share option plans taking around

one million dollar annual investment

allowance sticking around and so what

happened as a result of basically Jeremy

Hunt coming out and going yay slash

everything again going from the biggest

tax cuts in 40 years

to the largest basically hikes in 70.

what happened

bond yields fell half a percent

half of a percent on a 10-year is a huge

movement huge movement and when bond

yields Fall by that much that means

bonds are rallying

yup look at what they strategically

pulled off they strategically maintained

The credibility of the bank of England

who said that's it Friday we're not

buying any more we're done buying they

strategically were able to stop buying

and then rather than having the bank of

England potentially risk having to ruin

their credibility and actually go buy

bonds again what happened the government

just said that's it scrap all the tax

cut plans let's raise taxes instead and

all of a sudden bonds rally so the

market actually pushed bond prices up

which gives Pension funds more liquidity

so in other words in order to create at

least the semblance of financial

stability because things obviously got

so freaking bad what did they decide to

do they decided to do whatever they

needed to tell the market to make sure

that Bond values would go up and not

fall and as long as Bond values go up

they don't have to worry about the bank

of England coming in ruining their

credibility and having to stimulate with

quantitative easing again that's what

they don't want because they need the

bank of England to be able to raise

rates but they also don't want the bank

of England to have to raise rates so

aggressively to counteract things like

tax cuts and stimulus see when first tax

cuts and stimulus were announced the

very first thing people started

clamoring was oh my gosh this means the

bank of England's going to have to do

100 basis point hike in November if not

even more basically markets are like the

bank of England's gonna have to hike so

aggressively they're just going to crush

the values of everything because you're

gonna have to move so quickly and that

was one of the reasons we started seeing

so many fears of margin calls which were

actually real like there were tons of

margin calls so many margin calls that

firms that were for like custody firms

that were processing these margin calls

didn't even have enough staff to process

them all it was so bad I mean you had

United Kingdom basically on the brink of

collapse

Bank of England at the same time we're

trying to remove inflation has to turn

on the money printer again to save

everything

and then the government is like okay

okay you turn U-turn you stop stop the

stimulus let's just raise rates uh taxes

instead let's raise taxes instead let's

cut the stimulus again going from the uh

Mo the largest tax cuts of 40 years to

the largest hikes in 70. Crazy uh and

and let's try to get back to financial

stability

they have done so but what it shows me

is just how close we got

to this sort of financial brinksmanship

we got so close that you literally had

in order to preserve The credibility of

the bank of England to fire the

chancellor of the exchecker the treasury

secretary and but by the way who served

the second shortest term ever in United

Kingdom history the shortest term in the

last 190 years okay

and you're probably going to see Liz

truss get booted so in other words you

potentially it for the sake of financial

stability because things got so bad in

the United Kingdom so a brand new prime

minister lose her job

and the treasury secretary lose their

job

all to prevent Pension funds from going

Belly Up In The Bank of England from

losing The credibility or the little

credibility they had left that's insane

that just shows you how close we got now

all eyeballs are on who's next and

hopefully knock on wood

nobody's next hopefully stocks just

start going up again bonds start going

up again and we just slowly back go away