George Soros

[Zeno~SPARTA~]

Following some minor trading on my EVE account, I was reminded of one of the worlds greatest traders and recounted one of his most famous exploits to some of you. At the time I could not remember his name, but now I do.

 

George Soros is famous for "breaking" the Bank of England in 1992, which was following a poor, governement inspired, fiscal policy focused on exchange rate protection instead of inflation. Unable to raise interest rates for fear of recession, the Bank of England and other central banks bought pounds to counter the sales by speculators. In the end the other central banks were unwilling to buy an overvalued pound and stopped buying it. Unable to continue protecting the pound it collapsed. This day was known as black Wednesday.

 

George Soros was the most notable character behind this at the time. He saw that the pound was overvalued and brought enourmous selling pressure to bear on it. Interestingly this huge correction brought about a major change in UK fiscal policy whereby the Bank of England became independent of government and its focus was to manage inflation through interest rates. This has made the UK one of the best performing economies in the euro zone and that day in 1992 is now known as white wednesday.

 

I am not a wise monkey, but I am pretty sure that trying to resist "market" pressure in whatever endeavour is as futile as king Canute trying to turn the tide.

 

Sorry to bore you, feel free to tk me at the next opportunity.

[Kanima~SPARTA~]

Hey Zeno,

 

Being a young pup :blink: , I remember when the Bank became independent of government, but didn't understand at the time the reasons why. It's not something i've ever thought about either, but i'm sure it'll come up in a pup quiz at sometime, so thanks for that.

 

 

feel free to tk me at the next opportunity.

 

 

Remember this comment, and bank it for the inevitable time i do TK ya by 'accident'. ;)

 

 

K