by Chris Carrington, The Daily Sheeple:
September 16th 1992 is the day that the British government had to withdraw the pound sterling from the European Exchange Rate Mechanism because it was unable to keep the pound above it’s agreed lower limit. The reason for the turmoil in 1992 was George Soros, who made over a billion pounds sterling by short-selling sterling on the markets.
Definition of short-selling:
The sale of borrowed securities. In a short sale, one borrows securities, usually from a brokerage, and sells them. One then buys the same securities in order to repay the brokerage. Selling short is practiced if one believes that the price of security will soon fall. That is, one expects to sell the borrowed securities at a higher price than the price at which one will buy in order to return the securities. Selling short is one of the most common practices of hedge funds. This is also called establishing a bear position.
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