GBP collapses against USD as George Osborne goes back on his pledge and caves in to leftist populism. Op Ed

What exactly will it take for Britain’s economists to realize that they must no longer play with fire, and must take a proper and decisive stand against the massive burden on the public purse which not only held back growth over the last 15 years and caused massive national debt, but also spills over into […]

What exactly will it take for Britain’s economists to realize that they must no longer play with fire, and must take a proper and decisive stand against the massive burden on the public purse which not only held back growth over the last 15 years and caused massive national debt, but also spills over into the black hole that is the Eurozone.

When Conservative Chancellor of the Exchequer George Osborne was finally allowed to design and unveil a budget which would really bring Britain’s state of wealth back to true form and further strengthen the pound against its flagging Continental counterpart, investors and traders, along with business owners rejoiced.

GBP collapses against the USD as George Osborne makes a sharp turn to the left

Britain’s top quality and leading edge financial sector was being thrown a lifeline of sensibility by George Osborne, who marked himself out as a business-friendly chancellor who wants to encourage the very un-European virtues of free enterprise, whilst at the same time empowering the investing public to follow Margaret Thatcher’s vision of becoming a ‘nation of shareholders’.

The pound rallied against the EUR and USD, and investors as well as financial institutions canned all thoughts of leaving the financial epicenter of London (the city was rife with thoughts of exiting if the socialist Labor party had won, or even if the coalition between Liberal Democrats and Conservative had continued).

False sense of security

Just as everyone was getting comfortable, and the differential between socialist, non-producing, debt-ridden Europe and the prosperous London financial sector with its rapid annual economic growth widened, George Osborne has today dropped a bombshell that has sent the pound into a dive against the US dollar, in a similar pattern to that of the euro.

If I were to analyze this fall in value of both the euro and pound at the same time, I would say that Mr. Osborne, who yesterday admitted that he will not be making the promised welfare cuts, and actually went on a £27 billion spending spree with a windfall that could have been put toward settling some of the external debt.

Unbelievably, Mr. Osborne is going to commit £16 billion to foreign aid by 2020, which is a metaphorical blank check to oblivion.

Those who thought they had finally got a Conservative chancellor who would set Britain on the right track actually got a socialist in disguise, hence the fall of the value of the pound over the last day. If the British government and those responsible for keeping the economy on an even keel do not shake off this inherent hunger for socialism that has risen to popularity among votaries over the last few years, then many will hang onto their greenbacks, and many others will look East.

Will HSBC, Barclays and Standard Chartered re-open their consideration of moving their entire focus to Asia? Now there’s a question.

Euro makes its usual downward direction against the dollar, however Britain is following in Europe’s fiscally careless steps

Charts courtesy of Google Finance.

Read this next


Investors transfers $424 million out of bitcoin funds in six weeks

Despite bitcoin’s decent surge last week, which took the primary cryptocurrency up 70% from the year’s low, digital asset investment products saw outflows for the 6th consecutive week.

Digital Assets

OKX has $9 billion in ‘clean assets’, shows latest proof of reserves

OKX, formerly known as OKEx, has released its fifth proof-of-reserves report amid increasing demand of crypto investors asking for transparency from exchanges they trade with.

Digital Assets

Circle seeks France license to launch Euro stablecoin

Circle, the issuer of the second-largest stablecoin by market capitalization, is seeking to get a dual registration in France as it aims to on-shore its flagship product for the European market – EUROC – a reserve-backed stablecoin.

Digital Assets Among Minority of Successful Companies to Renew Coveted Estonian License has successfully renewed its virtual currency service license from Estonia’s FIU for the third year in a row, despite regulatory changes that have made it harder for virtual asset providers to meet the required standards.

Inside View, Institutional FX

Time for brokers to add options trading as volumes explode on high volatility

“Usually, adding options to the typical CFDs and equities offering leads to fragmentation of the platform technology as many brokers will need additional back-end and front-end components, and that could be an important barrier for them. Apart from that, legal hassle and costs associated with proper licensing of market data could be a barrier at first. We are seeing this trend among market data vendors and exchanges to make it easier and more affordable.”

Metaverse Gaming NFT

GCEX’s DeFi education and prime brokerage offering available in DubaiVerse

“We are excited to be part of the developments of The Sandbox and to join other top players in the region, including our regulator, Dubai’s Virtual Asset Regulatory Authority (VARA), as part of the DubaiVerse. This is a great opportunity to bridge the gap between Web3 early adopters and GCEX clients, building a community around Web3 and digital assets.”

Digital Assets

Circle wants Fed to back USDC stablecoin after “very serious stress test” with collapse of SVB

The collapse of Silicon Valley Bank allegedly proves Circle’s point that there is a need for its USDC stablecoin to be backed by the U.S. Federal Reserve with its U.S. dollars held at the Fed.

Digital Assets

Google searches for and exploded by 300% amid FTX collapse

“The findings emphasize the importance of staying on top of market trends and being able to pivot strategies quickly and also offer valuable insights into the current state of the market and the behavior of traders, providing investors with valuable information to make informed decisions about their investments.”

Institutional FX

iS Prime reports £35m turnover, £16.2 million pre-tax profits, £37 cash balances

“We have plans in place to evolve the business over the next year, driving further growth for both iS Prime and for our clients.”