Robert Peston has an interesting piece on the new arrangements hastily being put in place to stave off the collapse in confidence in some very basic financial institutions central to the stability of the USA and UK, and arguable more global systems. The fact that the Bank of England had to overnight loan 40 billion pounds to the Federal Reserve of the USA indicates just how little liquidity is out there, or how big these debt liabilities are. Perhaps a little of both.
Peston goes on to speculate that the Chinese state , if it marshaled all the resources available to it through sovereign funds, and cash-rich institutions , could end up snapping up some of the major names in investment and retail banking, and with it a stake in the heartlands of both the UK and the USA – perhaps even wider afield.
My sense is that is not an unrealistic possibility. It may be hidden from our direct gaze, but I could see this happening. And quickly too. Sobering times.
Run on Sun, Jul 25
22.34 km (05:58 min/km)
HR 138 bpm - Burned 1,830 C
Cadence 85 spm
