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I think that there are a few misconceptions here. Money supply isn't GDP (although there are relationships but that's beyond the scope of this discussion). The
by bionsystem 4y ago
I think that there are a few misconceptions here.
Money supply isn't GDP (although there are relationships but that's beyond the scope of this discussion). The government isn't the central bank. And the UK was facing a recession making the peg really hard to maintain, that's about it.
I think Soros in this quote was "mocking" the 15 B part for how pathetic their effort was. You can't save (or destroy) a currency with that kind of money. I don't see any evidence of a coordination although it's clear that some other people were involved, just like a bunch of people took advantage of the GFC, or of oil going negative in 2020, but that doesn't mean those people were involved in provoking it or "coordinating". You have to understand that hedge funds compete against each other, we've seen that many times in history.
- zosima 4y agoThe currency was pegged to ECU and so government + central bank was purchasing pounds to maintain the exchange rate (the central bank was not free from government influence at the time.) To do that, they borrowed $15 billion to a war chest, which at the time was > 1% of UK GDP. It was not enough to maintain the exchange rate and one of the reasons for that was the gigantic short-sale of pounds by Soros and friends.