Richard Murphy says:
September 16 2017 at 6:47 pm
I said anything is possible
And interest rates do not make insurance companies insolvent
Cash flows do, caused by failed contributions in most cases
If you don’t know basics your time here is over
So now he’s saying that the problem insurance companies might have is a reduction in cash flows – I assume by contributions he means income from investments. He can’t possibly mean loss of premiums, that would just be too stupid even for him (for the mouth breathers, if premiums stop then that means you’re no longer insuring losses, this cannot be a problem).
So, the problem with insurance companies holding gilts is that government might stop paying the coupon?
Well, OK, that would be a problem, yes, but if the British Government is no longer paying the coupon on its debt – and, recall, these are the people who can never run out of money – then we do really all have something of a problem.