Recently, BOE head Mervyn King came out with a very surprising warning to his compatriots, accompanied with an apology that our own Ben Bernanke will never offer, namely: "I sympathise completely with savers and those who behaved prudently now find themselves among the biggest losers from this crisis." Of course, the US central bank believes it has completed its third mandate job now that the US stock market, not to mention commodities, are starting to be reminiscent of the parabolic phase of the Harare stock market. But back in Europe, even as the EURUSD is surging (killing the dollar, and the primary driver behind US stocks) now that it is accepted that the continent will proceed with its latest full on ponzi scheme and have the EFSF acquire insolvent bonds, even as the ECB proceeds to raise rates, things are getting worse. This is precisely what King warned about in a speech that not surprisingly got absolutely no coverage in the US. Luckily, here is Simon Black's take on the very surprising speech by King which confirmed that the only beneficiaries of Bernanke's policies continue to be the top 1% that make up the financial oligarchy.... as always.
A stern warning from a central banker, by Sovereign Man
Mervyn King is Britains chief central banker and a key figure in the global financial system. Last week, after surprising reports surfaced that the British economy had once again contracted in the 4th quarter of last year, King delivered a stern, sobering message to his country:
- In 2011, real wages are likely to be no higher than they were in 2005
One has to go back to the 1920s to find a time when real wages fell over a period of six years.
- The Bank of England cannot prevent the squeeze on real take-home pay that so many families are now beginning to realise is the legacy of the banking crisis and the need to rebalance our economy.
- The squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies.
- Furthermore, inflation may rise to somewhere between four per cent and five per cent over the next few months.
- The idea that the MPC could have preserved living standards, by preventing the rise in inflation without also pushing down earnings growth further, is wishful thinking.
- npleasant though it is, the Monetary Policy Committee neither can, nor should try to, prevent the squeeze in living standards, half of which is coming in the form of higher prices and half in earnings rising at a rate lower than normal.
- I sympathise completely with savers and those who behaved prudently now find themselves among the biggest losers from this crisis.
To summarize, one of the worlds leading central bankers has looked his country in the eye and admitted that he is completely powerless to prevent the inevitable decline in living standards that will result from years of reckless behavior.
Its amazing that someone in his position would be so terse, so direct in his appraisal of the situation; by nature of their positions, central bankers are serial liars who must continually deceive the public in order to set expectations and carry out their agenda.
Kings statement may be a sign that England is finally on its last leg. Fiscally, the country is in a similar situation as the US and Europe in debt up to its eyeballs, hemorrhaging cash, and quickly losing the confidence of the international community.
Unlike Europe, the US, and even Japan to a degree, England lacks reserve currency status in any measure that matters
so without a line of foreigners to buy its debt regardless of the fundamentals, the UK has been forced into its day of reckoning before the others.