Wednesday, February 02, 2011

High-Frequency Trading Is 77% of UK Market

This is hilarious.  The Ponzi British financial system at its best.  If there is one place on earth where financial clowns are even more foolish than the U.S., it’s Britain.  

Before the collapse back in 2008, Merrill Lynch was considered the ‘wanna be’ Goldman Sachs.  Anyone inside the Wall Street bubble knew criminally-incompetent CEO Stan O’Neal pushed Merrill to transform itself into emulating Goldman Sachs.   (More government lobbying, more attempts to rewrite our rule of law to pilfer from society, more adoption of Frankenstein finance.)  But the ruling mafioso at Merrill was always one step behind.  Look what happened.  Merrill collapsed.  Mind you, we wrote on more than one occasion that Merrill’s business model was unsustainable before its collapse.   Maybe the only person to do so.   Today, I’m saying Britain’s economic model is unsustainable and that collapse may be inevitable unless they rapidly adopt a new economic model.

The Goldman Sachs-Merrill Lynch comparative parallels to the U.S. and Britain are very compelling.  ie, Britain has tried to regain its lost financial hegemony by massively financializing its economy as it followed the U.S. down this path.  (Just like Merrill followed Goldman)  That includes being a world leader in Frankenstein finance.  Now its financial markets have been taken over by unsustainable computer algorithms.  But Britain has adopted this business model without the benefit of the world’s reserve currency.  That is a major blunder of stupendous proportions made by pinheaded British bureaucrats that is setting them up to be the country-equivalent of Merrill Lynch.   The world’s reserve currency will help to bail out the U.S. as Goldman Sachs was bailed out.  But I believe Britain, like Merrill Lynch, may experience outright collapse. 

Remember, Britain is our candidate for hyperinflation this cycle.  That may not come to pass but I believe it is a distinct possibility.  We laid out the necessary but not sufficient dynamics for hyperinflation quite some time ago.  That Britain just reported negative GDP with massive inflation, courtesy of the Bank of England’s stepped up gilt purchases as foreign buyers wane, is an ominous sign of flagging currency demand due to both loose monetary policies aka high inflation and waning global liquidity- one of the necessary dynamics for possible future hyperinflation.   Couple this with very misguided plans of austerity (which we have railed against repeatedly as a failed and utterly ridiculous economic ideology) and copious amounts of money given to speculators in the forex market and you have a brewing storm which could easily lead to a chain of events culminating in currency collapse.  Could.  Not necessarily will.

How ironic would currency collapse be in Britain since it was associated corruption in that country which greatly contributed to the currency collapse in Iceland?

Maybe before this crisis passes they will boot the queen mother off of the public dole and make her family work at Sainsbury’s to earn their keep like the rest of the people.   Self-proclaimed heirs to the public dole and God-given rights of prominence and authority are the greatest afronts to freedom and a vestige of a time when Britain ruled the world through brutality and the muzzle of a gun.   And yet they somehow still glorify it.

posted by TimingLogic at 10:19 AM