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Britain has entered second credit crunch, confirms Downing Street

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posted on Nov, 30 2011 @ 10:47 PM
Britain has entered second credit crunch, confirms Downing Street

Britain has entered a second credit crunch, Downing Street said on Wednesday night, as America was forced to intervene to stop the eurozone crisis leading to a global financial collapse.

The US Federal Reserve spearheaded a scheme by central banks around the world, including the Bank of England, to lend money to ailing European banks that were struggling to borrow.

The emergency action to stop the international financial system from freezing up again was prompted by rumors that a European bank was facing difficulties and could not raise money. Panic started to spread through the German bond markets, which threatened to result in a credit freeze for European banks.

British banks have been warned by the Financial Services Authority, the City watchdog, that they must make preparations for the collapse of the single currency.

Downing Street sources insisted that the global economy was not facing a “Lehman’s moment”, in reference to the collapse of the American investment bank.

However, a spokesman for the Prime Minister said: “Clearly there is a very serious situation in the financial markets at this time.

“We are experiencing a credit crunch and that central bank action is about trying to mitigate the effects of that credit crunch. They are ensuring they have the capacity to take action.” The eurozone debt crisis has led to growing fears in financial markets about the stability of major European banks.

Investors, particularly US money-market funds, are increasingly worried that the European banks are exposed to huge losses on loans they have made in Greece, Italy and other indebted eurozone countries.

So while not a ‘Lehman’s moment for the global economy, there is a credit crunch, one of which is confined to Britain and Europe, for the time being. It is common news now that the evasive action taken by the central banks is far from a cure and will only buy time until such when it blows up again shortly, and the central banks will be forced to act again (and again), kicking the can until no manner of action will be able to slow the mother-of-all financial collapse.

posted on Nov, 30 2011 @ 11:39 PM
From what I saw this morning they did a thing called a swap. Traded US Dollars for Euro's and overvalued the Euro's. It gives them ten days is all. I got the impression the Euro is toast if they don't have a solution in ten days. Also something about China saying no to the EU. It seems the EU is in far worse shape than we are.

posted on Nov, 30 2011 @ 11:39 PM
Fantastic, more debt but at low low rates.
the thing is that this dosen't solve the problem of
Italy and the rest of the eropean countries of life support,
it just means that their is more capital floating in the
system. the likely hood of a defalt is still high
but the increased liquidity just mean that more money
will be put into CDS and product like that. They must have
been stairing right at the abyss for this to happen.
anyway, withdraw what we have from the system
because it doesn't have long to live.

posted on Nov, 30 2011 @ 11:55 PM
reply to post by wondera

You can't have that many people taking and not paying in while retiring at 50 on the backs of productive people forever. This was bound to happen. The governments there need to grow a pair and save themselves. The people have been taking for so long they know no better. They think it is their right to live off handouts now.

Then you have the highly overpaid Union bunch who are want even more. It amazes me.

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