“The UK Debt Management Office (DMO) has been voted the most impressive sovereign funding team and DMO chief Robert Stheeman as most impressive sovereign funding official, said EuroWeek. The top award comes as the DMO sold a record £227.6 billion worth of Gilts in FY 2009/10. Hopefully, Stheeman should have better luck than the recipient of last year’s award for most impressive sovereign funding official, who was Spyros Papanicolaou, who is now the ex-chief of the Greek Public Debt Management Agency.”
- Hat-tip to Jonathan Escott.
Swiss fund manager Felix Zulauf gives a pretty
extraordinary interview on King
World News. Not extraordinary in the sense of wildly illogical, but
extraordinary in the sense of its candour and absolutely chilling in its
implications. In short, the industrialised world is drowning in debt that it
ultimately cannot service. Zulauf suggests that when – not if – the next
banking crisis hits, governments will be unable to step in and support them as
they did in 2008, because their own finances are fatally impaired and their
capacity to borrow cannot be extended indefinitely. “We have been living in a
fiction for the last 20 years or so.. we thought we could borrow ourselves into
sustained prosperity.” That which cannot continue forever will not. Zulauf
foresees years of deflationary crisis that will culminate in the eventual
replacement of the current fiat monetary system. This thesis is, of course,
hugely positive for gold, the one currency that doesn’t come with counterparty
or credit risk or concerns about oversupply, but hugely negative for financial
assets. And it also highlights just what a disaster it has been for the UK in
David Laws to lose by all accounts one of the best-placed administrators to tackle
the national deficit. As one trader remarked last week, before Laws’
resignation, “David Laws is not a namby-pamby politician – he is a real
person”. Having effectively outed Laws and his technical breach of Commons
guidelines, The Daily Telegraph is now pursuing his replacement at the Treasury
for allegedly avoiding capital gains tax on his second home. This is not a
democracy, this is the Salem witch trials – what Stanley Baldwin and Rudyard
Kipling referred to regretfully as power without responsibility. At a time of
grave national crisis, we deserve better from our press.
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