The BoE biggest worry

and it ain't what you think it is...

This is just too delicious of an opportunity to pass on.

The Bank of England has finally identified the real threat to financial stability. Not the $700 trillion derivatives market that’s one counterparty failure away from making 2008 look like a rounding error. Not the interest rate regime held together with duct tape, prayer, and an Excel spreadsheet from 1997. Not the LBMA’s silver inventories bleeding out faster than a medieval physician could help. Not the commercial real estate apocalypse. Not the pension funds leveraged to the moon. Not the sovereign debt that’s growing faster than Congress can print new zeros.

No.

I couldn’t make this up even if I tried (ok ok ok… I probably could). Helen McCaw, a former senior analyst at the BoE, has written to Governor Andrew Bailey urging him to prepare contingency plans for a financial crisis triggered by... an official announcement confirming the existence of extraterrestrial life. She’s worried about “ontological shock”. About markets panicking when the White House admits that yes, we’re not alone, and yes, those things buzzing around restricted nuclear facilities aren’t ours and definitely aren’t Chinese or Russian drones.

She wants the BoE to stress test for this. To run scenarios. To prepare communications strategies. To coordinate with the Financial Stability Board. To treat potential alien disclosure with the same seriousness as pandemics and cyberattacks.

I’ll give you a moment to process that. Or to stop laughing.

Ok? Done?…… Stop laughing I said!! ….

The reasoning goes like this: people might lose faith in institutions. Markets could experience “extreme volatility”. Investors might rush into safe haven assets like gold. Banks could fail. Civil unrest could break out. All because someone in Washington finally admits what half the internet already believes anyway.

And look, I get it. The modern information ecosystem is broken enough that a celebrity’s tweet can tank a billion-dollar company. A Reddit post can trigger a short squeeze. A TikTok video can cause a bank run. The financial system is held together by spit and duct tape. So sure, theoretically, anything can become a financial event.

But aliens?

ALIENS?

We’re stress-testing for the scenario where the fundamental nature of human existence gets rewritten, and the BoE’s concern is... bond yields? Really? “Oh no, there’s an advanced civilization that’s mastered faster-than-light travel, but the real crisis is that the gilt market might get squirrelly”?

Yeah. That’s the real problem!

Let me explain why this is one of the most pointless contingency planning exercises in the history of institutional hand-wringing.

If aliens actually arrive at Earth, the financial system collapsing will rank somewhere between “forgot to water the plants” and “left the oven on” in terms of concerns we’ll have.

Listen. Any civilization that’s mastered interstellar travel has solved problems we can’t even properly formulate. We’re talking about crossing light years of space. We can barely get a rocket to Mars without everyone involved biting their fingernails down to the knuckle. They’ve figured out faster-than-light travel, or wormholes, or some physics we don’t even have the mathematics to describe yet. We’re still arguing about whether string theory is real. They’re probably using string theory to tie their cosmic shoelaces.

The tech gap isn’t smartphones versus rotary phones. It’s not even the Large Hadron Collider versus a pointed stick. We are the ants at the picnic, and they’re the ones who brought the sandwiches.

You think we’re going to have a financial crisis? We’re going to have an existential crisis. Markets? Currency? GDP? These are concepts that require everyone to agree they matter. The moment a ship that can travel between stars parks itself over London, every human agreement becomes adorably quaint.

And let’s talk about this peaceful scenario everyone seems to fantasize about. The one where they arrive and respect our sovereignty and we have some kind of intergalactic cultural exchange program.

Sure.

Because nothing says “friendly neighbor” like having the ability to casually cross interstellar distances but choosing to just... chat. Any species that dominates their home planet enough to develop that level of technology did not get there by being nice. Evolution doesn’t work that way. Natural selection is not a friendship bracelet workshop. They clawed their way to the top. They outlasted every competitor. They probably strip-mined their own solar system for resources and had at least three near-extinction events before they figured out not to blow themselves up.

But yeah, they’ll definitely show up and politely ask if we’d like to trade recipes.

And even if - even if - they’re somehow the first species in the universe to achieve dominance through the power of kindness and cooperation and sharing feelings... they still have technology that makes our entire economic system obsolete in about fifteen minutes. Free energy? They’ve got it. Matter synthesis? Probably trivial. Scarcity? What’s that?

Your portfolio is now worth the same as Monopoly money. Actually, less. Monopoly money at least has nostalgic value.

But sure. The Bank of England should absolutely spend time stress testing this scenario. While back on Earth, the LBMA’s physical silver is vanishing faster than free beer at a college party and the derivatives market is one sneeze away from making 2008 look quaint.

But no. Aliens. That’s the priority. That’s what demands Andrew Bailey’s attention in 2026.

You know what? McCaw might be onto something. If I were a central banker staring at the actual structural problems - the leverage, the phantom positions, the dollar’s eroding credibility, the debt spiral that makes Fibonacci sequences look amateur - I’d want to worry about aliens too.

It’s the perfect bureaucratic move. You can’t be blamed for not stress-testing correctly if the scenario is literally unknowable. It’s accountability-proof. All the appearance of prudent planning, all the box-ticking satisfaction of having done Something Official, none of those awkward questions about the trainwreck you’re actually supposed to be managing. Plus, if you’re wrong about the timing of a sovereign debt crisis, that’s embarrassing. If you’re wrong about alien disclosure, well, at least you were thinking big picture.

And if the aliens do show up?

They can explain to the LBMA where all the silver went. They probably have sensors for that.

Maybe they’ll even be impressed that the BoE was ready with a communications strategy. “Look at these adorable creatures,” they’ll say in whatever frequencies they communicate in, “they made a plan. How precious. Put them in the zoo next to the dolphins.”

At least the Bank of England had a stress test ready.