The UK is on the verge of becoming a banana republic. And its all thanks to Gordon and Alistair's abysmal approach to dealing with the credit crisis -- which in turn is LARGELY thanks to Gordon's mismanagement of the economy over the last decade.
Stuart Cheek, head of UK Government bonds at BGC Partners, is wildly understating the seriousness of a downgrade on UK government bonds from their present AAA rating. Many, many, MANY investment funds are only allowed to hold AAA rated securities -- if securities held by these funds are downgraded to anything below AAA, they will be forced to sell at any price. There will be an avalanche of supply on the market.
This coming at a time when there is a major glut of supply of newly issued government bonds to pay for the bailout operations, with plenty more where they have been coming from, for which there are virtually no takers and the Bank of England is the buyer of last resort already, taking them on by purchasing them from the Treasury with freshly-minted money.
No, I'm afraid you cannot overstate quite how serious it is that the UK's debt might be rated anything less than AAA. This is a train wreck, and Gordon has been and continues to head us right at it.