(Newswire.net — September 24, 2014) – As with any market if things are going up then the chances are they will come down. But why are we heading for not just a correction but a massive crash?
Let’s look at some facts. The FTSE 100 has gone up by roughly 25% in the last 4 years and by nearly 100% since March 2009. It’s on its way to break it’s all time high. The British pound has risen to its highest level against the dollar in five years and the British housing market has risen by 11% between May 2013 and July 20104.
This has happened on the back of the worst recession the UK has ever seen. During this time the UK economy had the biggest and most dangerous debt problem in the world with a national debt of over £1 trillion. The UK government will talk about how great this recovery is but what the real reason for this boom time?
The only reason the UK has seen these incredibly results is down to the printing of money or Quantitative Easing (QE). Since 2009 the Bank of England had printed £375 billion and every time they print more the markets experienced a dramatic upward trend.
This Graph shows the results to the FTSE 100 after Bank of England printed money
This graph show the average UK house price which is fueled by QE
These graphs clearly show the results of Quantitative Easing on the markets but the government can’t just keep printing money. Greg Dickson from Hamilton Bradbury says,
“The UK Government is putting band-aid on a terminally ill economy. They need to look at a source of the problem. This so called growth may look good to voters but it not a long term view.”
When the crash does happen not only will the markets be affected but the government bond market, long seen as the safe option, will take a hammering.
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