Bank of England Governor Says World May Be Facing Worst Financial Crisis in History
- Posted on October 7, 2011 at 7:45am by
Billy Hallowell
- Print »
- Email »
Sir Mervyn King, the Governor of the Bank of England, claims that the world economy is facing its worst challenges since the 1930s — if not ever. While the situation was extremely difficult back in 2008 when the crisis truly came to fruition, King claims that today’s global economy is facing an immensely complex scenario. He said:
“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. [...]
The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed. The world has changed and so has the right policy response.”
King‘s comments were made following the Bank’s Monetary Policy Committee’s decision to infuse £75billion into the economy in an attempt to prevent yet another credit crisis. In describing this decision, the Bank said that the eurozone debt crisis was creating “severe strains in bank funding markets and financial markets.”
This was the first time such an infusion was put into the economy since 2009, when the global debt crisis caused the Bank to flood £200 billion into the economy.
According to economists, the Bank’s decision to do this (i.e. quantitative easing) showcases the fear and desperation that is currently gripping the government. Many economists also predicted that more similar moves will be occurring in the future. The Telegraph defines the process of quantitative easing (QE):
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.
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.
The rationale given by The Monetary Policy Committee [MPC] was that inflation is creating a “squeeze on households’ real incomes” Additionally, the MPC said that spending cuts would have an impact on domestic spending for quite some time. Considering these developments, the quantitative easing was justified in the eyes of the bank.
This could, according to some, create a disaster for those approaching retirement, as it may lead to lower interest rate payouts on pensions and the like. Some, like Ros Altman, a pension expert, claim that this most recent instance of quantitative easing is a “Titanic disaster” that will increase poverty for those planning to rely on pensions. Still, the actions are being defended as a way to steer clear of yet another epic recession.
It seems these fears aren’t unfounded. In an interview on BBC, IMF advisor Robert Shapiro, who is a bailout expert, also had some dire warnings for the world economy (via Zero Hedge):
“If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected.
All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serrious than the crisis in 2008…”
Watch these comments, below:
(H/T: Telegraph)
Popular Stories
MSNBC Host Snaps in Heated Segment: ‘What in the World Is Riskier Than Being a Poor Person in America?’ 690 Comments
Does Misstated Marathon Claim Prove Paul Ryan Is Dishonest? (POLL) 660 Comments
‘Jumah at the DNC’ Speaker: ‘Muslims Visited America Prior to Columbus’ & ‘It Was a Muslim’ Who Guided Him to the ‘New World’ 524 Comments
Obama: RNC Like Watching ‘Black-and-White TV’ Because Romney ‘Did Not Offer a Single New Idea’ 362 Comments
Paper Details Obama Admin’s Alleged Secret Note Sent to Iran: If Israel Attacks, We Won’t Get Involved 328 Comments
Faith
This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 212 Comments- Pakistani Muslim Cleric Accused of Framing Disabled Christian Girl in Koran-Burning Case Read More
- ‘Made Up Religion’: TV Historian Enrages Muslims, Receives Threats After Producing UK Documentary Questioning Islam’s Beginnings 227 Comments
Meet the Controversial German Imam Accused of Brutally Beating His Wife & Pushing Sharia Law Read More
‘Self-Proclaimed Messiah’ & Unification Church Leader the Rev. Sun Myung Moon Has Died — Here’s His Life Story Read More
Business
President Obama Issues Major ‘Green Energy’ Executive Order Read More- Germany’s Upcoming Court Ruling Will be Huge for the EU Read More
Ford Looks to Beat Toyota for Best-Selling Car in 2012 With This Model 147 Comments
Bernanke & QE3: Here’s What You Need to Know Read More- ‘Extortion’: Why Did the Labor Department ‘Drop the Hammer’ on Oregon Farmers? 300 Comments
Technology
- This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 212 Comments
‘TaserDrone’: Hackers Weaponize Quadcopter With Actual ‘Shocking’ Technology Read More
Ever Heard of the Wild ‘Burning Man’ Festival in the Middle of the Nev. Desert? Here’s Your Primer Read More
Stanford Develops Technology ‘Better Than Steroids’ for Athlete Recovery Read More
Have You Pretended to Know What ‘the Cloud’ Is? You’re Not Alone Read More
Submitting your tip... please wait!
Comments (49)
rockstone
Posted on October 7, 2011 at 5:03pmDefine “normal”……..
Report Post »Ruler4You
Posted on October 8, 2011 at 10:34amWow. What a genius. This guy is in charge of this powerful bank? Yikes!
Report Post »majorsco
Posted on October 7, 2011 at 3:52pmThis is a fact for all socialistic economies. Those economies based on strength of self reliance of their people are doing well. Unfortunately, that’s not many countries because progressives have done too well in recent years. Their time is coming! It’s been exposed, but the lesson hasn’t been learned. The progressives are doubling down on what got them to this point hoping for the ultimate crash so they can take it from socialism to forced global comunism. Once they reach the objective of forced global comunism with just a handfull of progressive elites at the top, the population of the entire world will be enslaved! Capitalism is the only way to freedom. However it takes smart people to avoid the crash, unfortunately the progressive idots may outnumber the smart people.
Report Post »Ryntintin
Posted on October 7, 2011 at 3:43pmWhat the hell? why the hell? global competition is stiff and we must dominate, USA is about freedom and freedom will some day soon rule the earth. Keep on Fighting Patriots, Keep on praying you all.
Report Post »God Bless America
dirthead1986
Posted on October 7, 2011 at 3:36pmI hope there corrupt system crashes. they are only affraid of losing the power they stole from us.
Report Post »Centralsville
Posted on October 7, 2011 at 1:23pmAnd the left in this country are trying to make us follow the same failed socialist system.
Report Post »TH30PH1LUS
Posted on October 7, 2011 at 1:15pmI was thinking this interview would make a nice “voice-over” to video of people cannabalizing each other in the streets of New York and L.A.
Report Post »freedoc
Posted on October 7, 2011 at 12:53pmFor the very first time, I must say, I am certain our fate is sealed. I wanted to believe ‘the sky is falling’ scenario was partially hyperbola.
Why? Because it takes a ‘political solution’, and the Socialists won’t allow this—for their true interest lies in the violent control of the individual, and World economic collapse is a nearly sure means to achieve their fundamental aim.
As I said in another post yesterday: Gumbye America.
Report Post »db321
Posted on October 7, 2011 at 12:21pmI call BS – Go ahead you fool – you keep everyone dependent on Welfare and I go out and create Wealth.
Report Post »jessieH
Posted on October 7, 2011 at 11:42amThat’s what happens when morons get into politics. Our government servants prove that, daily.
Report Post »Lloyd Drako
Posted on October 7, 2011 at 12:56pmThe Governor of the Bank of England is not a politician, and is not a member of the British Parliament or Government.
Report Post »tomloy
Posted on October 7, 2011 at 11:29amI saw this coming years ago. I have my house paid off, I live in a rural community, and I grow as much of my food as I can. The excrement is definately going to hit the rotary oscillator. Its just a question of time. And you think the riots are bad now? Just wait!
Report Post »jamestoms
Posted on October 7, 2011 at 9:24pmYour spot on, I could see this coming for years. We are awash with fools. Those num-skulls rioting on Wall street have no idea how their shoving the train down hill.
Report Post »UKmac
Posted on October 7, 2011 at 11:00amThis man is speaking the truth and very plainly. The problem is he is speaking it so we can be manipulated into a panic or “crisis”. As our fears rise we are more prone to accept the most secure solution…and that it a firm handed dictatorship.
We are watching the process taking place designed to enslave the entire world for the benefit of the elite. The only hope you have is to keep a clear head, understand the Constution, have food stored, plenty of ammo & guns, close & trusted friends and a will to fight for freedom.
If not…then you are doomed to be a serf with the rest.
Report Post »Lloyd Drako
Posted on October 7, 2011 at 1:14pm“This man is speaking the truth and very plainly. The problem is he is speaking it so we can be manipulated into a panic or ‘crisis.’”
Perhaps he is warning us so we can avoid a panic or crisis?
Storing food, ammunition, etc., is still not a bad idea!
Report Post »cemerius
Posted on October 7, 2011 at 10:25amI sure love the fact that the “Politicians” of the world decided to intertwine the entire world economically so that we will never have another World War. Hoiw’s that plan goiing for you now Mr UN? Mangoes grow ripen and die on the vine on thousand of home lawns in Oahu Hawaii yet they force us to pay for $5 mangoes in the grocvery strores from Brazil/Mexico……There is a deep madness going on in the world and I pray that most people will be prepared of course THEY won’t be!! Jews and Mormons as a whole have got it right with having supplies for years on hand in accordance to their religous practices. Of course, when the world collapses and NO MATTER how charitable these two groups will be THEY will be accused of causing this BS!! Disclaimer…I am neither a Jew or a Mormon but I have read a Torah and the Book of Mormon not too mention I am struggling through an English version of the Koran!!!
Report Post »Lloyd Drako
Posted on October 7, 2011 at 1:05pm“Politicians” had plenty of help and encouragement from neo-liberal ideologues and big business interests deceived into thinking that the fall of communism 20 years ago was a victory for unalloyed, unregulated, world-without-borders speculative capitalist enterprise.
This has proven to be as utopian a vision as the dream of socialism was.
Congratulations on getting through the Book of Mormon–I believe it was Mark Twain who called it “chloroform in print.”
Report Post »Lotus503
Posted on October 7, 2011 at 10:16amWe need to be very careful about watching what’s going on in Washington right now…particularly the Executive branch. A financial crisis is the perfect time for the leftists “top down, bottom up and inside out” strategy.
Report Post »Lloyd Drako
Posted on October 7, 2011 at 1:16pmPerhaps, but if that’s the case, why didn’t Obama and his minions declare a state of emergency and ship us all off to camps when they had the chance–and a Congresional majority–back in 2009?
Report Post »jamestoms
Posted on October 7, 2011 at 9:36pmObama and menions are fueling the down hill run of the economy, there will be no let up until the complete disolution of the US & Freedom.
Report Post »Doom2022
Posted on October 7, 2011 at 10:15amI can’t help wondering if the current world economic crisis is a grand bait and switch scheme that will allow the powers behind the curtains to offer a plan B solution. A solution that includes a new world order of limited freedoms or enslavement that otherwise would not have been acceptable.
Report Post »vennoye
Posted on October 7, 2011 at 11:03amYou are right, of course. The people behind the “Central Banks” have strived toward this for over a hundred years. For the last 60 years, two countries have stood in their way–America and Israel. Both think they are exceptional, both think they are protected by the GOD of Abraham, Isaac and Jacob. The time is right for them to succeed for a little while. If we are prepared, we will be OK. Think of Noah….they world went to nothing around him, but he survived. We will too!!
Report Post »Acting Man
Posted on October 7, 2011 at 11:24amIt makes you wonder because you can’t believe that that you, the average person, could have better economic understanding than they do. I would rather believe there is a global banking elite behind these guys, rather than believe they are so stupid. You want to give them the benefit of the doubt. :)
Report Post »angelonquest2000
Posted on October 7, 2011 at 6:57pmYou are right. Here comes the new world order…Before that happens get ready for the fall …..See you on the other side!
Report Post »Walkabout
Posted on October 7, 2011 at 9:43am“studied at Wolverhampton Grammar School, King’s College, Cambridge (gaining a first-class degree in Economics in 1969; MA), St John’s College, Cambridge, and Harvard (as a Kennedy Scholar). Whilst at Cambridge, Sir Mervyn was Treasurer of the Cambridge University Liberal Club in 1968.[1][3]
After graduation he worked as a researcher on the Cambridge Growth Project with future Nobel Laureate Richard Stone and Terry Barker at University of Cambridge. He later taught at the University of Birmingham and was a Visiting Professor at Harvard and the Massachusetts Institute of Technology where he shared an office with then Assistant Professor Ben Bernanke. ” wiki
An economist, who went to the best schools in England & U.S., didn’t see this coming?
Beck was warning people in 2007. Talk show host Jerry Doyle also said we were screwed.
Report Post »R2
Posted on October 7, 2011 at 9:33amThe federal reserve was the first step to take America to socialism and you know what they say eventually you run out of others money.
If they repealed the federal reserve act of 1913 we could go back to small local banks that would loan to the people.
Report Post »Russman
Posted on October 7, 2011 at 9:32amYes,
Report Post »Things must reset. Just as the false high tech economy under Clinton imploded and reset back in 2000 and the false housing economy under Bush imploded in ‘08. The housing implosion is still being falsely propped up to save the banks but it’s a house of cards… Too many people are trying too hard to “Save” a screwed up world economy……. It has been abused and will “self correct”. When it happens be ready for at least a few weeks of panic and a few decades of living in a world that will look very different. We survived the great depression and we will survive this.
Stock up on food (Costco has a decent deal right now on a 12 month supply of dehydrated/freeze dried food, not that I’m plugging them, just an idea). learn to garden and can, learn to fix things, learn how to cook food. And yes find a good church, get to know your nieghbors you will need to pool resources….
Walkabout
Posted on October 7, 2011 at 9:27amIf they reset everything, I am going to borrow lots of money from the rich like Soros, Al Gore, Bill Clinton & all the greedy types.
Report Post »JMorcan
Posted on October 7, 2011 at 8:57am” It would be better for the US and Europe to unite, reject a World Economy, and trade between our Nations.”
What would you do about the U.S. debt to China? If we attempt to restrict trade to Europe only, China will repratiate its holdings. The dollar will become practically worthless overnight.
Report Post »DanWesson455
Posted on October 7, 2011 at 9:24amLove the picture in the story. Holding his head like it is about to explode. Buy silver now before it is too late.. Buy heritage seeds now before it is too late. Buy your AMMO now, lots of it, before it is too late.
Report Post »SpankDaMonkey
Posted on October 7, 2011 at 8:32am.
Report Post »Remember kids “Falling does not Hurt, it‘s that sudden stop that get’s you!” And by the looks of it, the bottom is comming up fast………
bobinmichigan
Posted on October 7, 2011 at 8:28am“Everything that can be shaken, will be shaken”
Report Post »cavebat4ever
Posted on October 7, 2011 at 8:26amPut up what you can. Get ready for hard times. Find a good church. Gather your family and friends close.
Report Post »lukerw
Posted on October 7, 2011 at 8:26amThe World Economy is BS… and as the EU crashes, it will suck in the US. It would be better for the US and Europe to unite, reject a World Economy, and trade between our Nations. So, I am saying, rather than letting our money become worthless, and GNP become zero, it would be better to reduce our prospects and keep some value in money. THINGS ARE GOING TO CHANGE, and the choice is between BAD or WORSE!
Report Post »Snowleopard {gallery of cat folks}
Posted on October 7, 2011 at 8:17amSo what else is new, most of us have been waiting for the EU to go under anyways; now like those on the titanic, the people know the ship is sinking rapidly, and the leadership refuses to see while there is still time.
Report Post »murmai
Posted on October 7, 2011 at 9:13amnever mind that wall street is behind the global armageddon you douche
Report Post »Walkabout
Posted on October 7, 2011 at 9:26am@ Murmai.
If you listen to Jerry Doyle he said that the Davos/Bildeburger crowd was told in 2003 that over leveraging would crash.
The figure he cited was really messed up. A market, housing, that has 11 trillion in in assets had 600 trillion in derivatives. That seems wrong.
Snowleopard is a douche? From 2000 to 2006 organizers for a the Eurozone kept coming back to nations that voted against the union every other year. Populations who voted against it like England & 1 other were called stupid. Less than a 3 years later the whole thing is failing because of socialist governments like Greece. You can retire at 55? What squirrel could spend 27% of its time or longer retired? It does not work to consume more than you produce over a lifetime & that is exactly what Greek workers are doing. The Italians are too. So they have to raise taxes so high so people can retire at middle aged. Subsequently young people can;t start a family with the confiscation taxes of the government. the Italian gene pool did not change that fast. Those young Italians are just as horny as anyone else. So what is different. They have a stifling degree of socialism. Look at the damn birth rate. Low birth rates show the complete assanity as currently practiced.
Report Post »joe1234
Posted on October 7, 2011 at 9:31am@mur…I do feel sorry for you, such stupidity has to hurt, but then you democrats are incapable of thinking for yourselves…keep bowing down, its all you’re good at…
Report Post »HARDWORKPAYS
Posted on October 7, 2011 at 8:16amEverything is going to come crashing down no matter what they do. The more they screw with it, the worse it will be. Everything has to reset, and it will. Us that have nothing will still have nothing. I wish everyone would just do the right thing, but unfortunately that will not happen in a Godless world.
Report Post »jackal
Posted on October 7, 2011 at 8:34amI believe this is what Beck was warning about back in 08.Just let some fail (banks)take a pill and move forward the ship will list but not sink but now as Snow eluded we are all doomed.
Report Post »