Today Nomi Prins, who has given keynote speeches to the World Bank, IMF, Federal Reserve, and many other prominent institutions, told King World News that the emergency Bank of England intervention reminded her of when the financial crisis hit the United States.
Chaos In The UK
October 1 (King World News) – Eric King: “Nomi, we had that chaos just now in the UK. And I don’t know if people fully understand what happened there but it wasn’t just an intervention by the Bank of England. The Bank of England had to intervene. If they did not step in and intervene, the pension funds engaged in LDI, which is that exotic leverage on yield that pension funds were trying to get in a zero interest rate world that was causing these massive margin calls, those pension funds would have gone bust.
So the Bank of England stepped into that void when other entities like Black Rock essentially said, ‘We’re no longer making a market here.’ The bid just disappeared, and at that moment the BoE stepped in, but it wasn’t just a normal intervention, Nomi, like when we saw the Japanese intervene in their currency market. This Bank of England thing was different. It was a true emergency.
Can you talk about what your thoughts were as you saw that unfold because I know you are aware of these exotic leverage instruments, and we are talking about a situation where some of these pension funds (potentially) ceased to exist. That’s a pretty radical situation, isn’t it?”
Nomi Prins: “Yes, absolutely. And it reminds me of when the financial crisis hit in the United States and money market funds were facing what they called, ‘Breaking a buck,’ where money market funds were below par. That was part of the crisis back then. And this situation, we’re going into a crisis mode with respect to UK pension funds…to continue listening to Nomi Prins discuss the crisis in the UK and Europe as well as what to expect next for the US dollar, gold and much more CLICK HERE OR ON THE IMAGE BELOW.
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