Britain’s Ukraine aid situation (2024/08/30)

2024-08-30 21:00:00 +07:00 by Mark Smith

Really interesting discussion on the Goats, Guns and Gold podcast, a discussion with Alex Rainer about how so much of finance leads back to London. Particularly interesting if you are from the UK.

Yeah I know the name of the podcast is a little bit off putting to those from the left. But put that aside for a second there’s actually a lot of interesting analysis, mostly I would say factual as opposed to political propaganda. Now there is a right wing slant for sure, but just ignore it if that’s not your thing, just get in there for the data, the facts.

Broadly speaking it’s about the aid that the UK is being forced into giving to the Ukraine to fund their war efforts.

Some facts:

They have given $10 billion in military aim, and $6.5 billion in financial aid. That’s what’s in official documents on the government website.
Britain also guarantied multiple tranches of World Bank loans to Ukraine. So even though the money was supposedly given by the World Bank, they are on the hook for that too.
Who knows how many Ukraine bonds were forced onto UK pension funds.
On 22 September 2022 Liz Truss appointed Kwasi Kwarteng as Chancellor of the Exchequer. He presents mini budget and markets go bazirk, Guilts and pound sell off sharply.
The pension funds get hit with margin calls, because the pension funds, it turns out, were leveraged. They had leveraged exposure to the Guilts. A margin call is when the loan issuer demands you increase your collateral because conditions have become much riskier.
To meet margin calls they all started selling off their Guilts, so as to have the cash to make the margin calls. On 27th of September there were no more buyers of long dated Guilts to sell to. The pension funds were trying to sell the Guilts, but nobody wanted them.
The Bank of England had to step in and buy $40 billion of bonds in order to avoid the price falling off of a cliff. They stepped in at last minute and narrowly avoided complete collapse.
Each citizen is on the hook for about $2000, but since only 1/4 are working in the private sector, realistically it’s $10000 for each privately working person.
Btw 45% of people work or are supported by the government, ie have them as a major client.

So that’s the backdrop. I’ll follow that up with an extended quote from Alex Krainer [40:40].

If the Bank of England looses any money on these assets that it holds...So they buy British government bonds, and the British government bonds collapse and the Bank of England loses money on those bonds, well his majesty’s treasury has to reimburse the Bank of England for those loses. They have to make the bank whole. Which means that the British tax payer has to reimburse the bank...

This is like piracy, high street banditry on an industrial scale. So the Bank of England and the owners of the Bank of England, hold the collective British population to ransom, for a system that was foisted on them, which is fraudulent, which is immiserating them systematically, and which they themselves have to pay. It’s like if the slave owner makes a loss on the business that he uses the slaves to run, then the slaves have to reimburse him. That’s ultimately what this is.

Some followup notes:

On 22 July Ukrainians announce the deal with bond holders, the one where the holders get a 37% haircut.
The government are now expanding what they accept for collateral, maybe even Ukraine bonds.
But with reverse repo they will get 100 cents on the dollar, no losses, so the whole system will pay for those losses. They will rob the whole population of the UK.
Likely the Guilt market will go to zero eventually, that’s how the system is designed, collapse is a mathematical certainty, it’s happenned at least twice before.
And remember Gordon Brown sold all gold reserves at the bottom of the market a few years back.
With all this in mind, it brings new perspective on why maybe we’ve seen an massive increase in CCTV everywhere in the UK, and why generally people are being hemmed in. They are going to have to work harder to pay off the debts, and maybe they are pre-emptively getting ready for the unrest that will occur.

So that‘s some of the interesting facts but there’s more in the episode. I think it’s valuable to listen to no matter which side of the political ailse you are on. At the end of the day it’s just maths. It might be somewhat innacurate, putting this sort of thing together is difficult, but I think it’s at least directionally correct.

The british people are being turned into slaves, and this is no good! It is no bueno!

In a sense the US is in a similar situation but they have much stronger possibilities for growth and are not as reliant on foreign energy sources, i.e. Russia.

I suspect this is but a tip of a bigger ice berg too.

No slaves!