Black Wednesday

The very first reference to Black Wednesday was September 15, 1954. The 1940s and 1950s saw an enormous increase in air flights and air traffic controllers were incapable of handling the growing numbers of take-offs and landings. September 15, 1954 brought a day of inclement weather along the east coast of the United States.

The use of an air traffic controller was necessary because of poor weather conditions. That particular Wednesday, the number of pilots filing flight plans were too vast to be handled properly. This created congestion at the airports and delays for 45,000 aircraft all along the eastern seaboard. Any overload on the entire system can cause delays from 1,000 or more miles away.

In the arenas of economics and politics, Black Wednesday makes reference to September 16, 1992. It was definitely a bleak day for the Brits, as it was the day Britain was forced to withdraw the British pound sterling from the European Exchange Rate Mechanism, known as the ERM. When Britain joined the ERM, they agreed to keep the British sterling above a certain lower limit, as reported to the markets.

When they were unable to do so and dropped below that limit, they were forced to withdraw the pound from the ERM rating system. The estimated losses from this were 3.4 billion pounds. George Soros, a high-end currency speculator made quite a nice profit of approximately 1 billion US dollars from a short sale of the British currency.

Ensuing high interest rates threw Great Britain into a recession. Businesses began to fail and the housing market suffered a crash. The Conservatives like to refer to Black Wednesday as Golden Wednesday. September 16, 1992 pushed the country into an economic revitalization effort and consequently, the economy was much stronger by 1997 than it had been in 1992. The reputation of the conservatives was nonetheless ruined and the Labor Party, led by Tony Blair, began to play a more dominant role in the lives of the British people.

Suffice to say that the more serious minded consider September 16th, 1992 as the real Black Wednesday – for it will forever be remembered as the day that market speculators, most especially George Soros, brought the Bank of England down.