RARELY do people compare the British pound to the Nigerian naira, Azerbaijani manat or Malawian kwacha. But these are special times. Following the Brexit vote, dumped sterling. Some are worried about the possibility of a “hard” Brexit. Others are simply baffled by the government’s xenophobic and divisive rhetoric.
One question which people have not really explored is, what assets precisely are investors selling? After all, British stockmarkets are on the up (in pound terms, at least). And Britain’s government-bond prices are still very high (though in recent days they have fallen a little). Both of those phenomena suggest that money is flowing into British assets, not out of them.
We cannot be sure,…Continue reading