All of the trends in play are continuing this week. The Bank of England is once again on the verge of losing control of its national Gilt (government bond) market. Ukraine has upped the ante by blowing up a Crimean bridge and Russia has returned the favor by reaching deep into Ukraine to blow up various powerplants and bridges.
Joe Biden “went there” by warning of a nuclear apocalypse which caused Macron of France to chide him, and the Associated Press to “write” an article that was almost certainly penned by U.S. intelligence walking back the President’s statements a bit.
Continuing the crazy vibes, the Bank of England was “forced” to buy inflation-linked bonds in an effort to prevent them from sending the wrong signals about inflation being out of control.Bank of England fights fire with inflationary fire.
Naturally, the BoE had to print up new money to fight the fire caused by (*checks notes*) all the fresh money it had printed up in the past.
As if that weren’t enough, the BoE also was fighting a different fire over in the Gilt pits by promising to buy 20 billion pounds per day if necessary. There! That ought to do it! Only it didn’t.
At 3:00 ET on October 11, the BoE was scrambling and sending out this wall of messages:
It’s pretty damn serious folks when an entire decade of gains has gone up in smoke in less than a year.UK gilts decade up in smoke.