tag:blogger.com,1999:blog-3225795457407230638.post1464653650903706493..comments2024-03-28T07:36:19.697+00:00Comments on Excuse Me Whilst I Step Outside: From Gilts to Class Struggle in Five Easy QuotesCharlieMcMenaminhttp://www.blogger.com/profile/00942021756417667913noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-3225795457407230638.post-26920039893222527852009-04-28T15:26:00.000+01:002009-04-28T15:26:00.000+01:00What makes Gilts and Government Bonds in the US an...What makes Gilts and Government Bonds in the US and elsewhere attractive at the moment is that Government's are buying them back with freshly printed money. As Bill Gross of the world's biggest Bond Fund, PIMCO, said, his strategy was to do what the Government is doing, but do it first. That is buy these Gilts on the market, then when the Government steps in to buy them, the demand will push Boffyhttps://www.blogger.com/profile/08157650969929097569noreply@blogger.comtag:blogger.com,1999:blog-3225795457407230638.post-70805191625562472122009-04-25T11:10:00.000+01:002009-04-25T11:10:00.000+01:00Thanks Chris - not sure how secure gilts are thoug...Thanks Chris - not sure how secure gilts are though. If someone in the US or Germany or China bought UK gilts a year ago then sure their face value has gone up, but the conversion back to Dollars or Euros or Renmimbi is going to hurt. What is going to make UK gilts sufficiently attractive compared to those of many other governments? <br /><br />I can only think that it will require higher rates, Johnnoreply@blogger.comtag:blogger.com,1999:blog-3225795457407230638.post-64157585377678614802009-04-25T10:50:00.000+01:002009-04-25T10:50:00.000+01:00John - the reason I mentioned that $12.5trn was me...John - the reason I mentioned that $12.5trn was merely to show the size of the pot of world savings that can be tapped. Obviously, there are countless other claims on that - as you say, around the world borrowing must equal lending. But very few of these claims offer the security of gilts. <br />I was merely trying to point out that £220bn isn't as big a number as it seems, in isolation.<br />Andchrishttp://stumblingandmumbling.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-3225795457407230638.post-2400681948049270372009-04-25T08:52:00.000+01:002009-04-25T08:52:00.000+01:00"This means that the government can raise the £220..."This means that the government can raise the £220bn it plans to borrow in the gilt market merely by attracting 2.5 pence for every pound saved**. This is smaller than the share of the UK in the global economy"<br /><br />I'm still worried that this is a false analogy. Surely using that percentage implies that people who save into the UK do so only by buying gilts, and only buying them from the Johnnoreply@blogger.com