Black Wednesday - Stock Market Crash Documentary

till meltdown on Black Wednesday excuse me five years ago today the government faced one of the biggest financial crises in history it was incredible he can hear wave after wave of selling hitting the market it was a day when the Bank of England lost billions and speculators made fortunes it was in excess of a billion dollars of profits a day of disaster from which the government never recovered it was quite clear the government was not in charge of events I had made out we were in the middle of the quite the biggest political crisis I can remember [Music] Margaret Thatcher put Britain on the road to black Wednesday the economy was in crisis and in her own party the knives were out for the Prime Minister her Chancellor John Major suggested a rescue plan he believed joining the European Exchange Rate Mechanism would be both good for her and the economy Margaret Thatcher detested the idea of putting the pound into Europe but most Tory MPs supported it and she knew years of division had to end there would be in some pretty heated discussions back in 1985 1986 I remember one famous occasion ending in discord in the Cabinet Room with Jeffrey house storming out and slamming the door possibly the most decisive thing he ever did so feelings around pretty high for a long time John Major took it all down he managed to gently persuade her that it was probably right for the economy there were strong domestic political reasons to do it and slow rather like water dripping on the stone it eventually became not too painful a decision for her to take it would be a revolution the pound's value would be locked against the German deutsche mark and other European currencies it could vary but only a little to maintain the pounds value British interest rates had to match German ones in theory the pound would then be stable equally attractive to investors whatever the Germans did to their interest rates we would have to do the same the hope German discipline would give Britain a stable pound low inflation and German style prosperity it was a high-risk strategy nevertheless Margaret Thatcher called in her Chancellor and the highest officials she decided Britain would join the ERM the very next day the hope was it would boost the Prime Minister's popularity before the Tory Party conference in three days time this meant going in at the level the pound stood against the deutsche mark then which was high despite the ERM rules the Prime Minister took the decision without negotiation although she was the one who led us in she did it against her better judgment and with the middle of defiance there was no nonsense about consulting the Europeans we did it we alone did it John Major called me and said we have decided to join at the rate of two 95d marks and I said John I have to tell you we have to negotiate that and I think to 95 there's a little bit on the high side and he said no we can't change that because it was decided by the Prime Minister and I said well I don't care about your Prime Minister but I wanted to negotiate that with you you have to follow the rules but he said well it's too late we will announce it in half an hour and after it was announced of course there was no room for negotiations any more that I wish simply had to accept it and to pray and to hope that this was a realistic rate but John nyjah Britain's entry was a triumph from the start this was his policy and he took the credit I think everyone say please the Sterling is joining state mechanism I'm very pleased we've been waiting for this decision for a long time it's now been made I think it would be a great success but joining the ERM was not enough to save mrs. Thatcher the victim of a Tory party cou just seven weeks later she left Downing Street for the last time now it's time for a new chapter to open and I wish John Major all the luck in the world but joining the ERM failed to bring instant prosperity britain had already been sliding into recession over the next 18 months it got much worse a million people lost their jobs the high exchange rate of the pound locked inside the ERM meant businesses struggled to sell their goods abroad the ERM reduced inflation but there was little sign of German style wealth people were finding it very hard to meet their mortgage payments and when they failed to meet their mortgage payments and and were obliged to sell their house we were for the first time in British post-war history witnessing people selling houses for less than they'd paid and that dreadful you word negative equity came into the language it was a very very hard time against the odds John Major won the 1992 election he was determined to run the country as before with the pound locked at the high exchange rate at which had entered the erm he believed if he stood firm the erm could make the British economy as successful as Germany's the Prime Minister said he would come to dinner because the Sunday Times had supported him in the election he said you know Andrew prime ministers have tried to get inflation down and make Britain a low inflation economy they've never succeeded I'm going to do it I'm going to be the Prime Minister that got inflation down and established Britain as a low inflation economy to which one of our numbers said yes but it's a this could be the low inflation of the dead what's the point of having low inflation if the economy's not just on his knees but on its back anybody can do that an angry Prime Minister said that this was a policy on which he would never give way the pain was worth it he thumped the table and said Andrew don't you understand there is no alternative but the Germans were about to increase the pain the men who ran Germany's central bank prepared to meet it wasn't politicians but the Bundesbank cancel who said Germany's interest rates whatever they decided button would have to follow but in Germany the unthinkable was happening the economy was faltering the cost of unification with East Germany was higher than predicted and inflation was rising the Bundesbank canceled work raised interest rates our decisions were made on the basis of what is necessary at home our primary target in that time was to go on in fighting the acceleration of price increases in our country yeah this is yeah the bundes banks yeah main target inside the erm we should in theory have followed Germany's rising interest rates to keep the value of the pound steady but the British government desperately tried to avoid doing this if we wants to stay in the euro and we had to match those interest rates but if we match German interest rates that meant you know higher interest rates in the UK hitting the housing market above all in a way that became increasingly politically and economically unsustainable in the city the crisis that would become black Wednesday was brewing the currency dealers began to sell pounds and by Deutsche marks because of the high German interest rates the pounds value fell towards its bottom limit in the erm rumours spread that the government was about to devalue locking the pound to the deutsche mark at a lower level the government frantically tried to restore confidence just in case there is the slightest scintilla of doubt they're going to be no devaluations no leaving the erm we are absolutely committed to the erm that is our policy is at the center of our policy we are going to maintain Sterling's parity and we will do whatever is necessary and I hope there is no room for any doubt about that at all that the government is determined to maintain our position John Major's successor as Chancellor had now nailed his colors to the erm mast in private the strain showed he had inherited the policy which he didn't really very much like and he was complaining private and he would have spats peers of bad temper with his officials are with with all of us and I think his whole chancellorship was an unhappy period because he was forced and I think loyally did defend the policy but he didn't like also of course he had endlessly to answer questions about a recession which was caused by this policy he didn't like we had a meeting about all of this and more than one said well there is one policy left and that's to get the Germans to cut their rates and that's what he set out to do when you went off to Bath what happened now edged Britain closer to Black Wednesday Europe's finance ministers and top bankers were gathering Norman Lamont mission was to persuade the Bundesbank president to cut German interest rates to help Britain a last-minute letter from Germany's leader gave wholly a full bath John Major had a very clear indication from Helmut Kohl that that he Co would like to see German interest rates come down and that's the context of course for the bath meeting and it's very important because what the Chancellor then had to do was see the colour of their money as Norman Lamont welcomed his guests they could see he was a chancellor under pressure he hoped his European colleagues would back him [Music] it wasn't just Britain that was suffering the Germans were also forcing the other European countries to keep their interest rates high some were finding it hard to bear there was an air of crisis when I came to bath I and everybody else knew that the situation was very very difficult and I was told that the Italians who had just arrived took the view that something had to be done otherwise they would have to leave the erm inside the Assembly Rooms the Chancellor prepared to do battle unlike the Bank of England at that time the Bundesbank did not take orders from politicians how he handled its president would be critical the Chancellor decided to be forthright the only thing which mr. Lamont has had in mind was to force the Germans to lower interest rates and he asked me if I could not lower the Longboat rate of the Bundesbank here the next the next Monday the way he was speaking and trying to convince the Germans show will show that he felt he wasn't real political difficulties unless he got something out of the discussion like a stupid disservice about it the question was simple you've got to bring down interest rates e-everybody that was the cue when you hit that because there was no introduction no conclusion the questioning was quick brutal incisive but the Bundesbank president would not promise a cut in German interest rates four times Norman Lamont refused to take no for an answer as a member of the Bundesbank at one is an independent person one cannot be treated as an employee it's not possible and cannot accept it and I thought he is not my master I must bring this exercise to an end and I said to finance minister Vidal on my side in Bavarian dialect I think I should go now the German Finance Minister restrained a furious Helmut Schlesinger then he told Norman Lamont the discussion had to end he was saying Norman look you can ask us here another time in another time the same question and you will get the same answer but we are not doing this ten times Norman Lamont strategy had gone badly wrong not only had he failed to gain a cut in German interest rates he had also antagonized the one man could help him it was among the most unpleasant meetings unfortunately I have participated in this was a meeting which had created a lot of bad mood and absolutely no results and this kind of things don't happen without implications and the fight financial markets the following days they they they took notice of that hell much lazing left bath convinced Britain needed to take urgent action to keep the pound in the erm either increase interest rates or to be prepared for a devaluation in the European Exchange Rate Mechanism no other way no other way No [Music] but instead of taking action the Prime Minister pinned the credibility of his entire government on keeping the pound in the ERM at its existing rate he ridiculed those who said other policies would be better for Britain now we have the inevitable chorus of quack doctors peddling their remedies I said to him many times you really are taking a big risk for yourself that you'll have to eat these words if you if you can as far as you do all my adult life I've seen British governments driven off their virtuous pursuit of low inflation by market problems or political pressures I was under no illusions when I took Britain into the Exchange Rate Mechanism I said at the time that membership was no soft option the soft option the devaglia was option the inflationary option in my judgment that would be a betrayal of our future at this moment and I tell you categorically that is not the government's policy but the very next day events overtook John Major's words in Rome the Italian government was trying to prevent the collapse of its entire economy in London the dealer's fearing devaluation jettisoned the Italian nearer the liras value plummeted [Music] to stop the slide and keep the lira in the ERM the Bank of Italy poured in money the Bundesbank did the same the erm rules said it had to $1,000,000,000 was what we were spending in a few hours and we reached two or three or four or even five now this was billion dollars this was for me at least an astonishing amount of money as the selling intensified inside the Bundesbank its president decided that despite the ERM rules he could no longer help the Italians he told the Italians they were on their own the first silly reaction was why at that point you asked why really politely and they said because it's costing too much we are spending too much and we are not ready to go on indefinitely the German leader Helmut Kohl met with Schlesinger Schlesinger proposed a deal to end the crisis he would cut German interest rates if Italy Britain and others devalued their currencies the Prime Minister was visiting the Queen at Balmoral from there he flatly rejected the proposal but there would be no devaluation despite the German offer this was notified to John by me he repeated that he felt confident I insisted I said to him John we need stability the markets are really in a fighting mood and I do not think that the victory on the lira will be considered satisfactory by them they will choose new targets but this did not change his mind the next morning the lira was devalued by 7% the Germans cut their interest rates by a tiny quarter of 1% those dealers who had held on to the lira lost fortunes for their clients many started to sell pounds they feared a British devaluation would be next UK investment funds and indeed pension funds all of a sudden they can see all these strains building up in Europe and they kept the pound is clearly going to come under pressure they're holding all these pens and they want to get rid of them because they think the value of the pound is going to go down so they started selling in Frankfurt the president of the Bundesbank gave an interview to a journalist it only needed a hint that the pound might devalue to provoke an avalanche of selling inadvertently Schlesinger gave that hint well he said the realignment was not satisfactory it was not enough it was only a small devaluation of the Italian lira he wished he want to have more a more comprehensive realignment other currencies involved as well Schlesinger believed his remarks were off the record Virna Bank off did not he prepared to send his story across the world at the Treasury Norman Lamont knew nothing of this bombshell but that day had seen some of the heaviest selling yet of the pound he and his advisers were already planning their defenses on the Tuesday we met for the Chancellor to sanction a sort of a firefighting fund of a billion to defend the pound against speculation and then the word came through that might be something published next day in which the head of the Bundesbank had indicated that a wider revaluation but might have been helpful the newspapers were preparing their front pages I could not say I haven't said this it was not true I I have said this but it was certainly not for the public all evening the Chancellor and his team pressed the Bundesbank to deny the remarks but they couldn't well they couldn't say it's not true because I have to tape it was on my tape the interviewer they couldn't deny it we were all pretty shocked and there really wasn't anything very much we could do and in a way the meeting as it were was adjourned and resumed at 8 o'clock next morning by which time it was clear that indeed this had been every bit as bad as we feared Black Wednesday dawned we got in to work at 6 o'clock because Schlessinger had made his comments a night before and with what happened in the lira we were all pretty worried that the pound was going to come under a lot of pressure that day and so the drama began the rumors of a devaluation meant that to hold on to Sterling was a gamble banks pension funds international companies told their dealers to sell the pound and then the speculators joined the fray George Soros gambled 5 billion pounds selling while Sterling was still high but intending to buy back cheaply if the pound devalued and make a fortune the Bundesbank was basically egging on speculators to speculate against the weaker currencies and we took our cue actually from the Bundesbank the Bank of England hoped it could make George Soros lose his gamble it planned to sustain the pounds value by buying pounds at the official high erm rate billions of pounds of public money were about to be thrown into the defense of the pound we decided that as the London market came in we would intervene on a scale which would make it quite clear that we were intervening and that's what we did it was incredible I mean obviously you can hear what's going on in the market and you can hear wave after wave of selling hitting the market being met with resistance and support by the Bank of England they were buying such a phenomenal amount of pound at the Treasury they waited for news we were really just waiting minute by minute updates from the market and that was when we learned that the billion that we had to put aside to defend the pound up to the weekend on Tuesday night had been you know had gone in a few minutes that was really when the question was posed is this huge is the game up the bank was extremely grave they said we will have to raise interest rates you can't save the situation by intervention alone the Prime Minister was living in admiralty house in Whitehall Downing Street was being rebuilt after an IR a mortar attack the Chancellor rang the Prime Minister to say interest rates would have to go up to the points and they wanted the Prime Minister's agreement to that and this was obviously a very difficult moment for the Prime Minister for months John Major had not put up interest rates now after anguished debate he agreed a rise to 12% Prime Minister thought that this interest rate increase was absolutely explosive in terms of his political impact given the state of the economy the recession and particularly the housing market in the Admiralty House dining room the Prime Minister met three of his most senior ministers Michael Heseltine Douglas Hurd and Kenneth Clark he asked them to endorse his decision we got the message Douglas heard Michael Heseltine and myself we were in a sterling crisis and he wished to put up rates dramatically to show the political will defend the value of the pound to see if it would have the effect of stabilizing it and stopping the flow of our reserves out because we were defending at the time simply by buying sterling as much as we could using our own golden currency reserves and he got the agreement the group that we had to raise interest rates was an essay off he went raise rates by two percent excuse me intended to show strength the markets perceived the rate rise as weakness and reacted accordingly we had a fairly strong sense that we were on it indicated to us that we are in the at the endgame that there was no you know this was an act of desperation so instead of restraining us it was really an invitation to double-up to try to sell as much more as possible the Bank of England had some 19 billion pounds in foreign currency reserves but it was now spending 2 billion an hour as more and more people sold the pound all of a sudden instead of being asked to quote a price in five million pounds or to sell five million pounds for clients typically they would come up and do multiples of that suddenly they were becoming with an interest in 20 million pounds 50 million pounds a hundred million pounds and sometimes even bigger than that unaware of all this the politicians were still hoping the rate rise had worked I went outside to go back to the home office it has been driven by a metropolitan policeman and we were about half way down Whitehall when the driver said to me it hasn't worked sir because he'd been listening to the radio and the radio had been commenting on the market reaction and he was right then Terminix was obvious it hadn't worked then Ronald Stirling was going ahead and went battle the Home Office bothered about a bit of work and of course I was back in there Baldy house within half-an-hour because the meeting was reconvened what we do now at the Bank of England the man in charge of defending the pound believed it was time to throw in the towel and stop spending before the bank's reserves were exhausted even though that would mean letting the pound crash out of the erm well my view at that stage was that the game was up the scale of the intervention became heavier after the rise in interest rates because I think there were some people in the market who said that makes no sense in the context of the UK economy it had become clear that's getting out of the rme was bound to happen and was read over the sooner the better upstairs in the Prime Minister's temporary flat the Chancellor broke the grim news Charles they went through the options Prime Minister went through the options and it was clear that the Chancellor's option was now to suspend a critical decision had to be made the Prime Minister insisted on summoning back his senior ministers he had no intention of taking the decision to leave the erm alone it might destroy his administration after all he had made the erm the cornerstone of the government's credibility the Prime Minister went downstairs and went through the options very neutrally but describing very clearly what the Chancellor's preferred option was suspension I think it came as a shock to some of the colleagues that this policy the erm could end so easily I could see our economic policy and to some extent our European policy we're collapsing the chance of Accession the Prime Minister and all of us following them had been emphatic and definite for month after month that this was the center of our economic policy it also had its importance for our foreign policy and therefore yes of course everybody in that room wanted to stay in if we could a further interest rate rise to defend the pound would be disastrous for the economy and there was no evidence it would work Norman Lamont again advocated suspension but Michael Heseltine Kenneth Clarke and Douglas Hurd disagreed most of them wanted to make it clear that we had gone the final mile to remain within the erm there were some people who said well are you absolutely confident that if we raise interest rates further that way actually persuade the markets I thought that extremely unlikely but I mean in those circumstances if people wanted to try then that was something that one couldn't exclude it might just work John major decided to raise interest rates a second time to 15 percent did anyone think it would work I don't know if anyone thought it would work most of his colleagues I think thought it was the right thing to do or did you think and I thought at the time I was mostly concerned with making sure that what was obviously going to be an extremely dangerous moment for the prime minister was that the decision was concluded in a way that had the support of his key ministers this was such a crisis for the government that apart from the value of our wisdom and opinion we had to be carried with these dramatic events you could break up the government if some senior Minister immediately said well I never agreed to any of this and this was a terrible folly put another way which the phrase I used we were there to have our hands dipped in the blood to make it clear this was a collective responsibility at the top of the government [Music] the interest rate market which was sitting 30 yards away exploded in noise we thought we can't believe at the Bank of England's race interest rates again [Music] that was a sign of weakness not of strength the more those rates got the more it's very worth a pound low mortgage rates no way 10 done Delamar there was a very very small rally in Sterling it went up maybe a third of 1% a very very small rally for such a big rise in the interest rate and immediately settled back on the floor and the Bank of England is still buying pounds that afternoon it became a veritable avalanche of selling in a sitting room inside Admiralty House Michael Heseltine Douglas Hurd and Kenneth Clark now sat drinking tea hoping against hope the second interest rate rise would work it was whilst we were in the sitting room in the afternoon that we suddenly realized that we were probably less well informed and pract anybody else in either kingdom about exactly what was going on and so we actually began to search for a transistor radio we decided that we should try to keep in touch with the money markets and here we were cooped up in admiralty house three people in the country least well informed about the hour-by-hour movements in the money market which kept being reported to us and upon which we were acting by mid-afternoon the Bank of England had spent 15 billion pounds it was running out of money with which to defend the pound rumors swept the markets that Britain had persuaded Germany to cut its interest rates to relieve the pressure [Music] but the Bundesbank was not going to take decisions that put the needs of Britain before those of Germany we have the Bundesbank and we have the Bundesbank law and and and these are german resources so you know to give everyone a free right is not our or our task our task is to make possible currency cooperation on rates which the politicians fix and if they are unsustainable well the politicians should change them the Prime Minister had a series of conversations with the Germans to explore whether they would support sterling getting Helmut Kohl to say yes on a2 that is important but when John Major asked Helmut Kohl for German help his reaction was non-committal reassuring I'll get back to you did he get back well let's just say the day moved on we had no path the markets and events had taken over became increasingly obvious as a day went on that we were merely being flotsam and jetsam being tossed about in what was happening and then then of course the decision to suspend was taken the Prime Minister gathered his colleagues he told them Britain had no choice but to pull out of the ERM they knew it was a political catastrophe the government's credibility would be gravely damaged promised Rory I mean he was in the same position as the rest of us that the government was suffering a major calamity and that we found we had not got sufficient control over events and the British government couldn't stop it no government could stop it when that amount of market sentiment was moving so much money around so quickly and we had an indefensible value of the pound and John was a perfectly control of himself and in control of the such businesses we could handle throughout the day the Prime Minister was calm and matter-of-fact and indeed usually it in the heart of a crisis in the very I of the storm in my experience things are calm and quiet it's before and afterwards that there's emotional storms the nervous storms begin to blow the government made no announcement but the Bank of England now withdrew from battle at four o'clock suddenly the Bank of England wasn't supporting pounds instead of a load of noise coming out of the voice brokers and everything in around the dealing room everyone too sat in stunned silence for about two seconds or three seconds and all of a sudden it erupted and Sterling just free felt that sense of awe that the markets could take on a central bank and actually win I couldn't believe it so how many pounds per billion so it would be good business yeah it's been really good what does that mean to the bank here and we've had an excellent day we've made about 10 million the markets finally closed and dealers still didn't know that the momentous decision to leave the ERM had been taken for three and a half hours there was silence from the government Treasury officials advised the Chancellor he shouldn't speak until a meeting was convened in Brussels with Britain's partners in the ERM I'd never previously been in the government that hadn't gotten economic policy a weakness in in the government's position I'd never encountered a situation where in that situation the ministers the political leaders of the government are accepting they can't tell the public anything about it when it's all over the newspapers every tenth straight economic pundit in the country is in front of cameras explaining what he thinks is happening most of the reporting is coming from people who haven't the first idea what's going and the sense of hysteria and panic has made out spreading through the nation we had just put up interest rates by a most phenomenal amount in one day and nobody is saying anything the Prime Minister was reluctant to allow any government minister to speak instead the Conservative Party Chairman was summoned people did not want there to be any more detailed questioning of what the next steps would be and what the consequences were and so on and so forth and clearly it was easier in some ways to put the party chairman up he cops he couldn't be drawn to to comment on any of the detailed economic consequences and what the next steps might be as I came in and Michael Douglas and can put up this sort of low cheer and I thought this bayaud what what are they cheering about what then became evident what they were cheering about was it had been decided that although we the decision had been going had been taken to go out of the erm that it was going to be myself who was going to appear on television that evening to explain it and this rather kind of bizarre explanation was that there was this funny body called the monetary committee who frankly I'd never heard I'm sure 99 people had 100 and never heard of which sat in Brussels and it was a group of officials who actually had to accept the resignation so like a club you know you had to accept the resignation before it was official so Norman Lamont had taken the view well if that's the case I can't actually appear on television and answer questions until it's official and if he couldn't appear now other government Minister could appear so there was Fowler Party Chairman not in the government absolute godsend that's why they were chairman by this time again people like Michael hazel time myself we're getting pretty fed up with the completely ridiculous politics of this this is no way for a government to handle and the media ought to handle the the explanation of such a serious we managed to get reluctant agreement and I would just go out and get Hindus personally but we got reluctant agreement from the whole gathering that Norman Lamont could go out give a slightly forced an artificial short statement say thank you very much and come straight back inside as long as you didn't answer questions this was a Farrell fiasco and added to the sense of no doubt unreal drama to the outside world [Music] today has been an extremely difficult and turbulent day massive speculative flows continued to disrupt the function of Exchange Rate Mechanism as chairman of the Council of European finance ministers I have called a meeting of the monetary committee in Brussels urgently tonight to consider how stability can be restored to foreign exchange markets in the meantime the government has concluded the Britain's best interests are served by suspending our membership of the Exchange Rate Mechanism as a result the second of the two interest rate increases that I sanctioned today will not take place tomorrow and minimum lending rate will be at 12% until conditions become common I will be reporting to cabinet discussing the situation with colleagues tomorrow and may make further statements there but until then I have nothing further to say thank you very much mr. wold what about those in your party that are calling their resignation mr. Fowler is difficult to see this is anything other than defeat and humiliation for the government and a blow to the credibility of the Prime Minister with it no I don't think it's sir any of those things I think the fact of the matter is that the government has had to respond to quietly the Prime Minister telephoned Fleet Street editors he was about to discover old allies had become enemies it was 7:30 on Wednesday evening my secretary came to to get me to tell me that the Prime Minister was on the line now this is sort of an unusual thing to happen even even in a busy tabloid office and I couldn't for the life of me think what he wanted to talk about we were up to our neck in God knows what and the Prime Minister mysteriously can find a couple of minutes come chat to a tabloid tosspot so I pick up the phone and then he says how dire caralyn hairier and fine Prime Minister how are you and we swap over to chitchat missus um how are you going to play today and so I acted slightly dumb and I said in what sense would you mean you said well the big story how how are you going to play that I said well I have on my desk Prime Minister a great big bucket of I rent oh yes and I said I intend to pour it all over you tomorrow and there's a sort of the pause the other end and then he says oh you are a wag John major considered resigning but didn't neither did Norman Lamont I recall calling the Treasury on the day of the Black Wednesday and say I'd like to see the Chancellor much to my surprise at about six o'clock I was called over assured into the Chancellor's rather ground room in the Treasury he opened a bottle of white wine we sat he seemed incredibly relaxed and I said how do you feel of this terrible event and he basically said I feel fine in fact I hadn't slept so well in four months last night I didn't have to worry about the value of the pound and it was extraordinary here was a policy that had been reduced to ashes a huge expense and the Chancellor was saying the government will set another economic policy which put Britain's interests first during Black Wednesday the Bank of England lost between three to four billion pounds of public money trying to keep the pound inside the ERM the day had been an utter fiasco his interest rates of going up and down like a [ __ ] drawers the Prime Minister and the Chancellor are like the chief executive and the finance director of a public company they sit there and decide the big issues and on this particular issue they got it hopelessly and completely wrong if they had been in business and they had lost even a tenth of the amount of money that they threw to try and sustain the kwid they would both have had to resign and by the way resign that day in Brussels the funeral rites were held for Britain's membership of the erm within a year Norman Lamont would be removed as Chancellor despite John Major's prophecies outside the erm the British economy would flourish and inflation stay low when that happened a skeptical public saw little reason to give John Major's government the credit and so Black Wednesday ended of all the political events I can think back on that was the most important that did change the course of British politics [Music] and I spent my entire time as Chancellor really concentrating on two aims trying to win back our reputation for competence economic competence trying to win back our reputation as a trustworthy government that could be trusted with the money it also of course set off an inflamed all those crazy European arguments between the euro skeptic rebellions which in the end of the destruction of the government Black Wednesday happened because the currency dealers could see the conflict between the British economy which needed one thing and a German economy which needed another and then they reacted [Music] as Britain considers whether to join a single European currency the one question is what's to stop it happening again the speculators are waiting they remember the fortunes they made on Black Wednesday it was a billion dollars in excess of a billion dollars of profits because we had a position approaching I think 10 billion dollars and the fall was more than 10 percent 21:40 biggest [Music] [Applause] [Music] [Applause] you might think it's an easy life being a well-dressed globalexplorer only 440 quid

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Keywords: Wall street, fx, forex, stocks, commodities, gold, oil, trader, warren buffet, million dollar traders, traders by the millions, market, trading, analysis, stock, technical, investment, futures, options, finance, day, currency, markets, news, euro, financial, bloomberg, system, stock market, hedge fund, education, dow, business, charts, trump, top 10, top 50, billionaire, trillionaire, life hack, trade wars, Documentary, mark zuckerberg, tesla, elon musk, euro crisis, brexit, black wednesday, elections, new, 2020

Id: EHAXNpRPE-I

Length: 49min 31sec (2971 seconds)

Published: Fri Jul 20 2018