27 June 2011

Bank of England Governor speaks the truth

Interesting article in the Daily Telegraph.
Bank of England Governor, Mervyn King points out that the situation in Greece is beyond rescue.
Pointing out that it is an insolvency problem and not just liquidity.
Its just a matter of when Greece will default not if...

However, the situation in the United Kingdom looks no better.

See: http://www.telegraph.co.uk/finance/comment/liamhalligan/8598797/Profligate-Britain-risks-suffering-its-own-Greek-tragedy.html

Plus one of the readers comments is excellent:

Dear Mr King,

So we finally have an admission from you that the banks are insolvent. Thankyou. What normally happens when a business is insolvent Mervyn?

So the situation boils down to taxpayers providing liquidity to insolvent banks who in turn are providing liquidity to an insolvent Greece. Do you think this will end well Mervyn?

Furthermore the US, which you haven't mentioned yet, is on the hook for billions in credit default swaps to the European banks so we are in the extraordinary position of a clusterfock of funny money (debt to you and me), magicked into earth's orbit from TARP in the US, to European banks and onto Greece and Portugal and finally landing on the shoulders of taxpayers in Europe and the US Thanks for that.

As you probably know the time will come when taxpayers cannot pay any more tax if they are to survive. For your next speech perhaps you will tell us what the master plan is. Will it be a slow motion 'buying time' suicide where we're still waiting for the elusive 2pc inflation even as the hearse pulls up, or do you think the banking syndicate will pick a convenient moment to pull the plug and bring the entire ponzi fraud to an armaggedon type finale?

It would be nice to know your thoughts.

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