Bank of England sees worst financial crisis ever, takes steps most disastrous for retirees, but says such disaster is worth it if saves economy

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I wonder if this guy was one of the Bank of England geniuses Soros stiffed for $1 billion when he bet against the pound sterling in 1992.

10/6/11, "World facing worst financial crisis in history, Bank of England Governor says," Uk Telegraph, James Kirkup

• "The world is facing the worst financial crisis since at least the 1930s “if not ever”, the Governor of the Bank of England said last night."

"The Monetary Policy Committee [MPC] also said that the inflation-driven “squeeze on households’ real incomes” and the Government’s programme of spending cuts will “continue to weigh on domestic spending” for some time to come.

The “deterioration in the outlook” meant more QE was justified, the Bank said.

"Financial experts said the committee’s actions would be a “Titanic” disaster for pensioners, savers and workers approaching retirement. Sir Mervyn suggested that was a price worth paying to save the economy from recession.

Under QE (Quantitative Easing), the Bank electronically creates new money which it then uses to buy assets such as government bonds, or gilts, from banks. In theory, the banks then use the cash they gain to increase their lending to businesses and individuals.

By increasing the demand for gilts, QE pushes down the interest rate yields paid to holders of these and other bonds. Critics of the policy say it pushes up inflation and drives down sterling.

The National Association of Pension Funds yesterday called for urgent talks with ministers to address the negative impact of lower gilt yields on pension funds. Joanne Segars, its chief executive, said QE makes it more expensive for employers to provide pensions and will weaken the funding of schemes as their deficits increase. “All this will put additional pressure on employers

• at a time when they are facing a bleak economic situation,” she said."...

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12/6/1998, "The man who broke the Bank of England," BBC

"Hedge funds can cause currency movements in minutes"

"This week sees the arrival in Britain of George Soros - the international speculator who now aims to reform global capitalism. He will be addressing the House of Commons Treasury Select Committee, and giving a number of press interviews,

• on the dangers of unregulated free markets.

Mr Soros, who operates one of the world's biggest private investment funds, is famous for having made

• $1bn by betting on the devaluation of the pound sterling in 1992."...

via Drudge