I’ve been getting quite a few requests to cover the UK Gilts incident (Gilts are the UK Government Bonds). Just like Credit Suisse last week, this is one of those that as interest rates start to go up, you start to see who has been “swimming naked”. Unlike Credit Suisse though, the UK Gilts market does have the potential to trigger systemic risk globally. There’s a lot more going on than meets the eye, and it is not over by any means. So it’s worth taking some time to understand what is going on, and the broader implications on markets. This article is a premium Patreon article, written on 11 October 2022. If you find this article helpful for you, please do consider signing up for the Patreon subscription. Most of the regular macro updates (like this) have moved there. Let’s start at the top To really understand what is happening today, we need to start in the 1970s....