Rebirth of England.

Chapter 645: Weighing the Two Evils
"Your Excellency, I think the government is moving too slowly and if it continues like this then we will inevitably go into recession much faster than other countries and that will be disastrous not just for you but for the whole country."

After meeting Brown again, Barron directly expressed his dissatisfaction with the government's slow response to the crisis.

"We need to be cautious in the introduction of policies. Although the injection of funds is necessary, its limit is affected by many factors. We do not want inflation to be accelerated as a result."

From Brown's slightly worried expression, one can see the government's dilemma at the moment.

As mentioned before, since Mrs. Thatcher, the British government has been pursuing a liberal economic policy and has always avoided excessive interference in the market.

For example, during this subprime mortgage crisis, when Northern Rock Bank was hit by a run, the British government only decided to rescue it after many discussions and when it saw that the situation was becoming increasingly critical.

In terms of the scale and intensity of rescue, there is a huge gap between the British government and the American government.

The previous British version of the "Lifeline Plan", a £1000 billion rescue plan for some mortgage groups, was finally introduced after joint lobbying by British financial industry giants including Barron.

The reason for this situation is not only that the British government has always tried its best to avoid interfering with the "free market", but also that it is worried that large-scale bailouts will lead to monetary "flooding" and aggravate inflation in the UK.

It is not that the British government is unaware of the dangers of the subprime mortgage crisis. For example, two months ago, the current Chancellor of the Exchequer, Darling, admitted:
"The British economy is experiencing its most serious crisis in 60 years. Britain is facing its most severe test since the end of World War II..."

Finance is a pillar industry in the UK, and in this subprime mortgage crisis, the banking industry was hit hardest.

Ever since Northern Rock Bank suffered the first bank run in the UK in a hundred years, the London stock market has been on a downward trend, with several record declines. Among them, bank stocks are the biggest losers, and even the share price of Standard Chartered Bank has been affected.

In addition to the banking industry, the real estate industry has also been greatly impacted. House prices in the UK have fallen by more than 1983% within a year, at the fastest rate since 15. In the UK, where 80% of households own property, the impact of this decline is widespread.

Even the 2012 London Olympics was short on funding due to falling house prices, with the gap reportedly as high as £2.5 million.

"According to the latest data I have obtained, our inflation rate has risen to 4.5%, consumer prices have skyrocketed, and one person goes bankrupt every four minutes. The Bank of England even predicts that the number of unemployed people in the UK will reach 200 million before Christmas this year..."

Seeing Brown frowning and talking about the current serious situation, Barron shook his head and said:

"But if we continue to do nothing, the situation will only get worse. Prime Minister, there is a saying in China, 'choose the lesser of two evils'. The 'neoliberalism' that we have always regarded as a guiding principle is not necessarily suitable for all situations. Now is the time for the government to take action..."

He looked at Brown and said firmly:

"You know, I have been shorting the British stock market since the beginning. Not just the British stock market, but also the European, American, and Asian markets. It can be said that almost all global markets are involved. If it is just personal interests, then I can stay out of it. After all, Standard Chartered Bank is in good condition, and I have enough funds to ensure that the companies I invested in can survive this crisis and expand their scale. But I am British, and now is the time for us to stand up..."

"We will have relevant responses, and in this regard, I also need to respect Darling's opinion."

Darling is the current Chancellor of the Exchequer. He took over Brown's position after he became Prime Minister. "In my opinion, Darling is still too cautious. Of course, this is understandable. After all, you are too good in that position. People will always compare you two. But the situation is always changing. The good medicine in the past may not be effective for the current disease."

To some, the predicament faced by the current Chancellor of the Exchequer, Darling, is similar to that encountered by Brown. When Brown was Chancellor of the Exchequer, Britain also suffered an economic crisis caused by the bursting of the Internet bubble, but Brown's response at the time enabled Britain's economy to survive smoothly.

During this subprime mortgage crisis, Darling's actions and his role in stabilizing the British economy are naturally easy to be compared with his predecessor.

"I will have another talk with him, Your Highness."

"I hope the government can act faster. After all, confidence is the most important thing for the market right now. Only when the situation is stabilized can it gradually improve, and banks and finance are the key..."

Barron raised his glass, clinked it with Brown's, and said:
"Regarding the friction with Iceland, I will help you mediate."

The friction between Britain and Iceland that Barron mentioned was also caused by the subprime mortgage crisis...

Before this, 108 local governments, including those in England, Wales and Scotland, had deposited 8.42 million pounds in Icelandic banks - some of them even deposited the money used to pay the salaries of municipal system employees in Icelandic banks to earn interest.

The result was the subprime mortgage crisis. Iceland's financial system was on the verge of collapse due to the impact of the global financial crisis. The Icelandic government had to take over its three major banks but did not promise to guarantee the return of the deposits of British local governments.

As a result, Britain retaliated by freezing the assets of Icelandic banks in Britain in accordance with anti-terrorism laws, which led to Brown and Icelandic Prime Minister Harder publicly accusing each other in their respective capitals, marking the first case of the financial crisis affecting state relations.

Prior to this, Iceland's sovereign wealth fund also invested in funds under the DS Group, and Barron was able to have some contact with the other party, so he would say something to help Brown ease the relationship between the two sides - after all, no matter what, the problem must be solved.

"I hope you can help stabilize the sentiment of the stock market, Your Highness. Although the rescue plan needs to be discussed and decided, if this can be done, then the funds of some of our related public funds can be gradually managed by DS Group..."

Just like before, Barron directly told Brown that he was shorting global stock markets including the UK, because there was nothing worth hiding, because shorting itself is not a negative word for Britain, which has a financial center like London, or for the whole of Europe and the United States. Moreover, ordinary people may not know about the short selling conducted by the funds under the DS Group, but as prime minister, Brown can still get relevant information.

Even so, the meaning of Brown's words was very clear. Although short selling is Barron's freedom, he still hopes that the other party will give up such actions so that the British stock market can stabilize.

Of course, he also offered an exchange of interests accordingly, that is, the management rights of the assets of some public funds managed by the British government can be gradually handed over to the DS Group. Of course, these assets are definitely suffering losses due to the subprime mortgage crisis, and Brown also hopes to recover some losses through the management of the DS Group. If this goal is achieved, it can be called a win-win situation.

"As you wish, Prime Minister, the effect will certainly be limited if we rely solely on our strength. The market is now waiting for the government to rescue the market, so that it can truly give everyone confidence."

At the end of their conversation, Barron reiterated his expectations.

(End of this chapter)