Britains Chaos Explodes! Financial COLLAPSE On Its Way

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I’m sure you don’t need me to tell you that things in the uk are really quite weird right now energy prices have skyrocketed and there are now fears that we will undergo rolling blackouts come winter just to survive inflation is at sky high levels and has just broken those levels once more and it’s created a cost of living crisis that is affecting everyone in

The country we are constantly being threatened with nuclear annihilation by the russian government and of course the last few months have seen us totally embroiled by political instability as well now you seem to really value and enjoy the videos i’ve made about the problems in the uk before either because you appreciate seeing and hearing what’s going on from a

British perspective or because you’re mean and you like me to suffer either way i’m here to tell you exactly what’s happened over the last week in the uk because boy did things take a drastic turn since the last video i made so to start off a super insanely quick recap of where we are left off last week because i’m sure most people know at this point but we used

To have boris johnson our prime minister and he ended up with a load of different scandals and so he was ousted by his own party the ruling party the conservatives then got to choose a new leader and they settled on liz truss she came out with quite a radical reform budget and proposed a load of tax cuts and spending boosts to try and grow the economy which usually

Would be very normal for a right-wing economic government but the problem is we have sky high inflation so stimulating the economy is one of the worst things you can do right now because of this investors all over the world lost faith in the british government and the british economy and so financial turmoil started we saw the pound crash against the dollar as

Low as one dollar and three cents and we saw pension funds all over the country almost collapse as their assets had instantly shrunk by 10 to 15 percent overnight and they were grossly over leveraged the bank of england then came to the rescue and turned the money printer back on or started up quantitative easing back again to use the official terms but it was

Only for a week to give pension funds a chance to sort themselves out then we saw liz just announced that she was going to u-turn on some of her tax policies and return the country and our basic governance back to normality as a result of the huge backlash against her plans now that is mostly what happened over the last three months and it’s where we left off from

Our last video as well the pound is in the toilet though not as bad as it was but still way off from where it used to be a few months ago a whole bunch of british equities have dumped as well and no one was really sure what was going to happen next but we definitely didn’t expect what actually happened now if you’re watching this video you probably pay attention

To the markets and 2022 so far has been incredibly turbulent especially for those of us in the uk we’ve seen the s p 500 tanked by over 25 at the exact same time as bond prices have crashed inflation has soared and traditional inflation hedges like gold have failed to perform it’s no wonder then that people are seeking alternative assets they have the potential to

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A financial markets point of view things did actually improve just not by a huge amount the pound recovered from its lowest point of one dollar and three cents to about 1.13 where it’s currently sitting and that’s not great but it is actually pretty much where it was before the budget that actually shook the markets was announced we also saw the bank of england

Announced a restart to quantitative easing and that scared a lot of people including myself this was considered by many to be a pivot and the markets especially considered it a pivot and so investors got excited on these short-term prospects of loose monetary policy but all of that would really just mean in the long term we see more inflation so even bigger rate

Hikes in the future so it was never actually good news but a bunch of investors convinced themselves it was this effect was so large that even american equities yes the u.s stock market actually rose on this news on the idea that if the bank of england has now pivoted then maybe the fed will pivot as well thankfully though that turned out not to be the case the bank

Of england said this process would only be short and sharp to assist markets and despite increasing the size of the intervention for a few days which was worrying again they did end up sticking to their word there quantitative easing has so far not been permanently turned back on in the uk which is categorically good news as bad inflation getting worse is never a

Good thing we also have news from pension funds and it turns out that they haven’t collapsed which is again a good thing it seems that they did take the bank of england at their advice and they said okay yes we’re going to deleverage so we don’t collapse when this monetary support ends and that means that this particular british lehman moment is not going to come

Now on the finance side most things seem okay then right and yeah that is a pretty fair assessment here i on the finance side things are okay but that really doesn’t give the whole picture as to just how chaotic this last week has been now on the political side and the economic side things are absolutely not okay and they are pretty much as bad as they have ever

Been we’ll start then with the political side because what’s happened here is literally insane now liz truss fired her chancellor who was credited with coming out with this revolutionary plan to grow the british economy and with him gone that means most of the budget which actually caused all this turmoil in the first place is gone as well gone is the top rate of

Tax cuts for those who were going to be paying 45 income tax and gone is the bottom rate of tax cut which brought the lowest rate of income tax from 20 down to 19 and gone is the corporation tax cut that went from 25 to 19 and gone is pretty much every other thing of note that we saw in that budget quasi quatang the previous chancellor has been replaced by this man

You can just see me uh just here called jeremy hunt who is pretty ridiculously unpopular in the uk honestly the hatred i’ve seen from him is pretty insane and kind of unrivaled and it spreads all over across the political basis from both sides of the spectrum he is not a popular man at all he is though the new chancellor of the united kingdom but with him arriving

It seems that liz trusses power is starting to disappear now to be clear she is still officially the prime minister but word on the street is that she’s now merely a puppet of jeremy hunt many of her party members have expressed that they’d like her gone altogether and it seems like the only way she could really hold on to her job is if she let jeremy hunt come in

And take control of things so he can run things from behind the scenes that would explain why he’s now thrown out all of the previous economic plans which were actually a large part of liz truss’s plans the idea that it was all quasiquartering who pushed this idea just doesn’t hold up to scrutiny the problem is that this act alone is also very unpopular and so we

Sort of have four different major movements inside the ruling party in the united kingdom we’ll get on to what those four are in a moment but i’ve had to edit this video because as i’m making this video right now things are just exploding yesterday for you watching this we had another huge fiasco with this massive vote on fracking which is very controversial in the

Uk and that combined with the turmoil already seen has resulted in a bunch of government officials resigning and calling on liz truss to resign even more soella bravaman who was incredibly high up in the government she was home secretary that’s like top five most powerful people in the country she’s either been fired from her job or resigned it’s really not clear

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As i’m making this video and she is very senior in the government as i said we’ve also seen a bunch of different government whips who literally have the job of ensuring that the pm’s orders are fulfilled they’re now quitting as well and so i have no idea who’s going to enforce order within this party it really does seem like this party is about to fall apart now

As for those four different factions sort of toying with each other we have those who want liz truss in power we have those who want jeremy hunt to control things from behind the shadows we now have a new resurgent group of mps like nadine doris who want boris johnson reinstated as prime minister and then we have those who want another leadership election to pick

Another new leader i hope it’s clear from my tone and just this entire video that this is totally insane and for british politics uh things really aren’t usually this unstable even throughout all of the madness we had throughout brexit this just throws all of it out of the window it’s so mad the conservative party usually likes to portray itself as a safe conservative

Option for the electorate this is the total complete opposite of that now just some evidence of the chaos that this is causing on our politics in our country is this brand new disagreement which is now almost outdated even though this news is only one day old at the time you’re watching this video but there’s this disagreement about triple lock pensions now the

Details of the policy aren’t too important for the purposes of this video but liz trust came out and said that the government is sticking with this policy at the same time as jeremy hunt the chancellor came out and said no we will not stick with this policy it’s dead in the water and simply put no one knew who to believe at all because no one really knows who’s

Actually in charge as a result of this no one knows what’s going to happen at all in british politics my bet and what most people are saying at this point when i first wrote that note no one knows what’s going to happen this whole fiasco with fracking and suela bradman getting fired or quitting hadn’t happened yet my bet is that they’re going to see the conservative

Party completely fall apart we’re going to see an early election called in the united kingdom labor will win this election by a land side which on the surface does seem a little bit worrying as labor don’t have a good track record in fact they have an awful track record when treating inflation with its deserved reverence but to be perfectly honest the tories have

Also shown that total lack of of respect for inflation and for basic economic principles over the last few years as well so will it be really any worse under labor i don’t know and i can’t really imagine it and being any worse than this here now on the plus side of things the financial markets have started to calm down but are the problems that actually cause those

Little tantrums in the first place solved well no not at all inflation is still insanely high and it actually just went up over the last month as well to a brand new 40-year high of 10.1 percent people had been confident about inflation dropping over coming months as there was this uh support for energy prices from the government which would essentially be a price

Cap that had been announced but it now seems that that support is going to be reduced but again we don’t really know because we don’t know who’s in charge now that does mean that inflation is probably not done rising though also the war in ukraine is the reason for this energy crisis in the first place and that’s still ongoing so there is no end to the problem

There on any fundamental level anytime soon the uk is still facing a struggling economy too but it is actually in 2022 one of the best performing developed economies in the world somehow it’s one of the only ones not officially in a recession according to the definition of two consecutive quarters of negative gdp growth compared to the us or most of europe it’s

Actually doing better but it’s still not good at all guilt yields or basically just the cost of government debt is still rising just as it is all over the world and that’s not going to change either and that will present a problem for whichever government ends up being able to govern this country so that’s not good news either and that’s pretty much where we are

Today things are just about stable on the financial markets front but on every other front they’re not and that means that the markets are probably going to go a little bit haywire before long as well as usual i guess you guys like to hear what’s going on from a british point of view and i get like quite a lot of accusations of me being biased against the us or

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Russia or china i know it’s amazing unbiased against every government because i talk about them a lot but the simple fact is there more important countries when than the uk when it comes to my viewers to what you guys actually care about and what will impact your investments so that’s why i mostly focus on them the only reason i’m covering the uk so much right now

Is because it’s just completely unprecedented stuff that’s going on no one really knows what’s happening and you guys seem to like my insight on this hi guys now i made that video that you literally just watched about nine hours ago from where i am right here today and that video is now already outdated um i made it at about 1am in the morning to make it as close

To the upload time which is today as possible so it would be as accurate as possible but already it’s outdated because liz trust the prime minister of the uk has literally just resigned about 10 minutes after me before i’m making this video talking to you now so i thought i’d very quickly just update you on the newest situation so that the video that you watch

Today isn’t hopelessly out of date so she’s going to stay on as prime minister for one week and during that time there’s going to be another leadership election in the conservative party to find out who the new prime minister is once that leadership election is over she’s going to stand down and we’ll have a new prime minister and probably an entirely new government

Because prime ministers tend to pick their own home secretaries foreign secretaries chancellors and officials to go along with them now the way this election is going to work is probably this isn’t 100 sure but it seems like the the bbc and other news outlets are saying that this is going to be purely internal so only members of parliament will get to vote on this

New prime minister now this is bad if you like democracy from the people but it’s good if you like stability for the country because one of the major reasons that liz trust has struggled so much is because she had fewer government officials members of parliament supporting her for this leadership bid than her opponent rishi sunak but she had more grassroots support

From the low at the bottom run conservative party members who all had an equal vote and that’s one of the reasons she struggled so much much because the government didn’t actually really want her in the first place as for who’s likely to take over who’s going to be the next prime minister there are a few names i can throw out but i really don’t have much of a clue

Rishi sunak is the most likely one probably he’s probably the bookies choice at this point um he came second in the leadership race and that’s who most people wanted most mps wanted at least but he’s also quite a controversial figure and the fact that he lost the election six weeks ago and now there’s there’s been some sort of chaos within the party and liz truss

Has been forced to resign by her own party and if he then wins the next election it would look an awful lot like a bit of a coup so it wouldn’t be the best of optics so there may be some kind of unity candidate put forward someone like ben wallace who’s a lot more sensible a lot more normal some people are saying that the new chancellor jeremy hunt might even be

Prime minister frankly i have no idea at all this announcement is you know 15 minutes old at this point so i really don’t have much else for you here i just thought i’d try and keep you as updated as possible as i been saying in this video that i made last night and that you just watched british politics right now are just insane no one knows what’s going on it’s

Moving incredibly quickly and so yeah i’m just trying to have everything be as up to date as possible so that you guys are all clued up one final thing is this going to affect financial markets my gut instinct simply says no because liz trust was sort of the problem or one of the big problems with the financial markets and so her leaving should actually add some

Stability um even though all of her policies were already sort of gone away with and thrown away anyway this is still just going to make the people who were worried about the uh the cost of government borrowing or the uh the tax cuts that the government was going to see well the people who were worried about that are going to be even more assured that it’s not

Going to happen now so this should be slightly good in that sense outside of that thank you all for watching and make sure to check out diamond standard in the link down below in the description until next time stay stoic foreign

Transcribed from video
Britain’s Chaos Explodes! Financial COLLAPSE On Its Way… By Stoic Finance