Banking Crisis Not Over King

Banking Crisis Not Over King.

Mervyn King, Governor of the Bank of England has spoken to a group of leading bankers including Mark Carney, new Bank of England Governor designate and Ben Bernanke, chairman of the US Federal Reserve at a meeting at the London School of Economics this week.

Mr King suggested that the banking crisis in Europe was “far from over”.

He suggested that winners and losers are increasingly becoming more polarised as countries fight for economic share and warning of a “global currency war”.

We have to say, we agree.

China has this week agreed a currency “swaps” deal with Brazil as they both look to protect their currencies and trade between each other if currency wars do break out.

Our view
Europe will remain suppressed for many years. Generations in Greece and Cyprus will pay for their parents folly. Countries that did not have economic infrastructure to warrant and pay for the growth and borrowing that their governments and banks took on, will be paying debt back for years.

Expect a rocky 5 or 6 years and then periods of global highinflation to devalue state debt without ever repaying it.