Bessent: Why defending the British pound in 1992 was politically impossible
Scott Bessent · Scott Bessent - Macro Maven (EP.415) · Nov 4, 2024 · at 26:49
Macro investor Scott Bessent recalls his core macro thesis contributing to Soros Fund Management's famous 1992 short trade against the British pound.
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“My contribution was just an observation that the British housing market, that mortgages there, floated with the base rate, which is their overnight rate. And if the Bank of England raised rates on Wednesday, mortgages went up on Friday. If they were trying to protect the pound, strengthen it by raising rates, The higher they took rates, they would be bankrupting the voting public.”
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