THE "INTERNATIONAL MAFIA FEDERATION" IS IN "DEEP TROUBLE"!

“The global economy risks becoming trapped in a low growth, low inflation, low interest rate equilibrium,” BOE governor Mark Carney warned, in a speech at the G20 summit in Shanghai. “For the past seven years, growth has serially disappointed—sometimes spectacularly,” he added.. That’s a bit of unwelcome “truthiness” from one of the world’s most powerful central banksters and it comes as his predecessor, the "incomparable" Mervyn King, warns that a new financial crisis is “certain”.. Below, find an excerpt from King’s new book as originally published by The Telegraph: Unless we go back to the underlying causes we will never understand what happened and will be unable to prevent a repetition and help our economies truly recover.. In the spring of 2011, I was in Beijing to meet a senior Chinese central banker. Over dinner in the Diaoyutai State Guesthouse, where we had earlier played tennis, we talked about the lessons from history for the challenges we faced, the most important of which was how to resuscitate the world economy after the collapse of the western banking system in 2008.. Bearing in mind the apocryphal answer of Premier Chou Enlai to the question of what significance one should attach to the French Revolution (it was '“too soon to tell”), I asked my Chinese colleague what importance he now attached to the Industrial Revolution in Britain in the second half of the 18th century.. He thought hard. Then he replied: “We in China have learnt a great deal from the West about how competition and a market economy support industrialisation and create higher living standards. We want to emulate that”.. Then came the sting in the tail, as he continued: “But I don’t think you’ve quite got the hang of money and banking yet”.. His remark was the inspiration for this book.. Since the crisis, many have been tempted to play the game of deciding who was to blame for such a disastrous outcome.. But blaming individuals is counterproductive – it leads you to think that if just a few, or indeed many, of those people were punished then we would never experience a crisis again. If only it were that simple.. The crisis was a failure of a system, and the ideas that underpinned it, not of individual policymakers or bankers, incompetent and greedy though some of them undoubtedly were.. There was a general misunderstanding of how the world economy worked.. There is more to life than finance, and more to finance than the events of 2008. The world economy today seems incapable of restoring the prosperity we took for granted before the crisis.. Many of the problems that seem to overwhelm us – poverty, rising inequality, crumbling infrastructure, ethnic tensions within and between countries – would all be eased by rates of growth that before the crisis seemed quite normal. But economic growth has fallen back across the developed world.. Some blame this on a slowing of innovation and productivity as the information revolution proves less transformative than earlier technological revolutions. I see the issue differently – the struggle to revive the world economy is the result of the disequilibrium that led to the crisis itself.. Before the crisis, spending continued at unsustainably high levels in the United States, United Kingdom and some other countries in Europe, and at unsustainably low levels in Germany and China.. That created an imbalance within those countries, with spending either too high or too low relative to current and prospective incomes. And the imbalance between countries – large trade surpluses and deficits – grew. These developments were not irrational, but were the consequence of people struggling to behave rationally in a world of radical uncertainty, part and parcel of a market economy.. All this added up to a disequilibrium within and between major economies. There was neither internal nor external balance.. From the mid-1990s, international meetings settled into a pattern in which European officials would berate the United States for saving so little, American officials would lambast Europeans for failing to understand the need for a change in trade balances, and Japanese officials would remain knowingly silent. Chinese officials would report the latest historically high growth rate.. The disequilibrium in the world economy became increasingly serious. Real interest rates were distorted well below the likely expected return on capital investment in an economy growing at its normal rate, encouraging investment in areas where demand was subsequently revealed to be unsustainably high.. King also says the following: "Without reform of the financial system, another crisis is certain, and the failure ... to tackle the disequilibrium in the world economy makes it likely that it will come sooner rather than later".. But why do central banksters always wait until after they've retired to tell the truth???