Bank of England Governor: World Facing Worst Financial Crisis in History

• The crisis has stretched on longer than I expected. This has allowed more people to become aware and be prepared. At least, I believe, banks around the world are now fully aware of the potential cataclysm of a Eurozone sovereign debt collapse and are taking precautions. However, I still believe that the whole world will tank. Asia will do better than most countries but will still go into recession if not economic depression. This coming global economic, financial and monetary collapse is probably just weeks away!
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  World facing worst financial crisis in history, Bank of England Governor says
  By  James Kirkup, http://www.telegraph.co.uk/
  The world is facing the worst financial crisis since at least the 1930s “if not ever”, the Governor of the Bank of England said last night.
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  Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession.
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  Economists said the Bank’s decision to resume its quantitative easing [QE], or asset purchase programme, showed it was increasingly fearful for the economy, and predicted more such moves ahead. Sir Mervyn said the Bank had been driven by growing signs of a global economic disaster.
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  “This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.”
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  Announcing its decision, the Bank said that the eurozone debt crisis was creating “severe strains in bank funding markets and financial markets”.
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  The Monetary Policy Committee [MPC] also said that the inflation-driven “squeeze on households’ real incomes” and the Government’s programme of spending cuts will “continue to weigh on domestic spending” for some time to come. The “deterioration in the outlook” meant more QE was justified, the Bank said.
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  Financial experts said the committee’s actions would be a “Titanic” disaster for pensioners, savers and workers approaching retirement. Sir Mervyn suggested that was a price worth paying to save the economy from recession.
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  Under QE, the Bank electronically creates new money which it then uses to buy assets such as government bonds, or gilts, from banks. In theory, the banks then use the cash they gain to increase their lending to businesses and   individuals.
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  By increasing the demand for gilts, QE pushes down the interest rate yields paid to holders of these and other bonds. Critics of the policy say it pushes up inflation and drives down sterling.
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  …. for the full article click here!

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