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What Happens When A Money Printer Finally Crashes
Zero Hedge
This is just too delightfully ironic to pass by.
In a world in which nobody has any faith in the capital markets because over $10 trillion in central bank liquidity has been injected to prop out a fragile house of risk asset cards…
… the one place one should have faith (because let’s face it: monetarism is the only religion that matters in today’s world) is that money will be printed for the foreseeable future, certainly metaphorically and also quite literally.
Alas, things did not quite work out that way for the company which, well, prints money (but sadly is not a central bank) when earlier this morning the shares of De La Rue, the company responsible for printing Bank of England banknotes, plunged a record 30% after it issued a profit warning.
Wait, a money printer losing money? Surely you jest.
Actually, no. From the BBC:
De La Rue, which prints banknotes for several countries and also makes the UK’s biometric passports, warned that trading conditions had “deteriorated“. Profits for this year are now expected to be £20m lower than in 2013/14.
The company said prices and margins for its printing services and secure paper used for banknotes were being squeezed.
Wait for it…. wait for it…
It also said rates of growth in new business had been slower than expected in recent months, and said the global transition to biometric passports, which it also makes for the UK government, had been “disappointing”.
Guest that’s what happens when you put all your chicken the money printing basket, and the head of the central bank suddenly gets cold feet on more printing.
Analysts say its banknote printing business is the real cause for concern. Earlier this month the company was named as the preferred bidder for a new 10-year deal to print Bank of England notes, but the value of the contract is believed to be lower than expected. The deal includes printing the Bank’s next generation of plastic banknotes.
