It's been a long evening in Europe.
I'm not referring to the fact I'm in Helsinki.
Or the fact that Ireland lost to Spain.
In the UK £80bn more is to be injected into the economy - which basically covers 70% of the deficit for the next year. Don't be fooled into thinking there's any other reason for this. It's just a cover for the Bank of England lending cash to the Treasury.
Spain says the Euro's nearly over.
Germany is saying it doesn't give the proverbial.
The consequence? It may not just be the Irish football team heading home soon. A lot more trouble may be doing so too.
The cliff edge is getting closer by the hour. In that respect alone Spain may be right.
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Steve Keen thought that there might/will be a second and much more serious credit crunch in the UK this year…as I am at about the limits of my understanding of economics I wanted to ask if there is any possible link between this ‘new’ £80 billion and Keen’s prediction? Any thoughts?
I would suggest that this confirms the boE is listening to Steve Keen and may be taking what it hopes is pre-emptive action
Still no sign of a real jubilee, though.
Well the answer came today! If I recall correctly the BoE will provide up to £5billion a month to banks should inter-bank lending freeze up. Keen’s overall worry though is the size of our debts taken as a composite whole. The second credit crunch would thus be a symptom of collapsing trust in the overall solvency of the ‘system’ that functions to service all that debt (I think).