The Bank of England’s infamous policy of Quantitative Easing is reported to have infected global financial markets with the deadly Ebola virus. In an unprecedented turn of events, the LIBOR is now unconscious and there are numerous reports of Ebola in financial markets across Europe. The Mancunion cannot yet confirm these reports. One analyst described the outbreak as “the beginning of financial Armageddon”: No one is safe.
The GBP LIBOR (the London InterBank Lending Rate) increased from 0.12% to 34.8% in just over 2 hours of chaos yesterday morning. The interest rate then appeared to stabilise at around 29% for 12 minutes – no one is quite sure why. This proved to be merely a devastating mirage as the LIBOR preceded to ‘faint’. The faint resulted in a complete freeze in all banking activity as credit temperatures came close to absolute zero (–273°C). Monopoly® mortgage rates are being used in the interim, with the rate fixed at “the equivalent of three houses on The Angel Islington”.
‘Faint’ is a financial term defined as a “loss of quantitative consciousness”. There is only one previous instance of the phenomenon in human history – in Delhi in 1858, when colonial interest rates suffered from a week-long outbreak of ‘Delhi belly’. In scale and severity, there is no blueprint. The nature of the Ebola virus and globalised financial markets make this a threat not just to stock markets worldwide – but the whole of human civilisation. While the Ebola death rate is around 50% for humans, the death rate for treasury bills is closer to 90%.
The root of the crisis is simple: Quantitative Easing (or QE). The Bank of England’s 19ft long ‘QE syringe’ was being used by the Central Bank of Liberia just 2 days ago, in an attempt to stimulate economic activity. While there, the needle became contaminated with the Ebola virus. The same needle was then used to inject the viscous QE liquid into the British economy when financial markets opened yesterday morning. As the QE injected new forms of liquidity into the British financial sector, LIBOR, one of the most important interest rates in the world, almost immediately contracted the virus. The ‘incubation period’ for Ebola in flowing finance is just five seconds.
The LIBOR is currently receiving treatment in the Bank of England, but what is of most concern now is the global financial sector as a whole: mortgage rates, lukewarm money flows, bank deposits (i.e. PERSONAL SAVINGS), oath yields, etcetera. The reports of contamination across Europe represent terrifying warning signs. Switzerland have also introduced Monopoly® mortgage rates in anticipation of infection, using “the equivalent of rent-only on Fleet Street” – they do not have a set. G7 leaders have been attempting to formulate a response since yesterday evening. As yet, there is no news.
North Korean state television have reported that Kim Jong-un is “amused” by the developments. His reaction is shared only with ISIS (we think) – for everyone else, the overwhelming emotion of the day is fear.
Boris Johnson is drunk in Churchill’s underground bunker. Gordon Brown has spent the whole morning pouring Irn Bru® on his dog – he has not spoken since the faint. Many of the students The Mancunion spoke to last night were physically sick on hearing the news. “Is this because of the news? Is this because of the news?” we asked a vomiting student on Corporation Street at 4am. We interpreted her mumbled response as “Yes”.
Amongst the chaos and confusion, there are numerous requests. Manchester Business School is closed for the foreseeable future and has been rigged with dynamite in anticipation of infection. The presence of students in the building at the time of infection will “have no impact on the nature of the University’s immediate response.” The British government has told the media to urge the public “to handle all forms of money with rubber gloves, regardless of circumstances”.
Furthermore, the Monetary Policy Committee has this morning revealed it will employ Russell Brand and Bez (from Manchester’s Happy Mondays) in a bid to resolve the crisis. There have also been widespread calls from experts for the injection of antibody default swaps into the financial sector. Non-experts have no suggestions.
Policy makers will have to act fast but there are no obvious solutions. The next few days will likely prove crucial in determining the fate of finance. We await that fate.
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