Ex Bank of England Boss Another Financial Crisis Looms

Ex Bank of England Boss Another Financial Crisis Looms.

Reports in both national newspapers and online today are suggesting that the former Governor of the Bank of England, Mervyn King, has warned that another global financial crisis is looming.

Mr King suggests that it is the financial system as a whole that is broken and as a result there will be another financial crisis.

Major Western economies are in debt and regulators are continually failing to address shortcomings within the banking system as a whole.

Comment

We have written many times that the global economy is a false economy. Money is worthless! If you think you can walk into the Bank of England and present your £20 note inscribed with the words “promise to pay the bearer the sum of twenty pounds”, do you really expect a “cashier” to give you a bag of silver Saxon coins called “sterling’s” weighing twenty pounds?

Not a chance. Countries are indebted to each other and to the people to an unprecedented level that can never be repaid. The only way our “false economy” works is by having inflation to devalue debt. By having inflation at just 2.5% per annum, a country’s debt is devalued by nearly one third every 10 years having never repaid it.

With the UK heading towards a Brexit vote in June, we believe not just UK markets but both Europe and the world will be shaken to its core if the UK leaves Europe. We will all survive but it then puts into question the whole “European experiment".