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We began with a credit crisis,
the Subprime Crisis which created
a crisis in banking. As the banks were
rescued after three years,
it has created a crisis
in government. Instead of
bankrupt banks, we now have bankrupt
government. And, the next
three years could be the greatest risks
of all to the global economy since the 1930s.
So what next? Of course,
to allow a bankrupt country
to go bust, we then need to go back
to our bankrupt banks and provide
extra strength for them so they
can survive. So we go from bankrupt banks,
bankrupt countries,
now we have to protect the banks some more,
allow a country like Greece to go bust,
perhaps to leave the Euro,
perhaps not, but to go bust, yes.
To default on debt, yes.
All we are doing at the moment,
is giving large amounts of money
to Greece, to pay its interest
back to European banks.
So why don't we just pay
the European banks direct and let Greece go bust?
These are huge questions.
They are complex. But at the same time,
as we have questions about
the survival of the European Union
we need to look at what is happening
outside the Eurozone. In my country
the government has made a decision
to do what it can only do now. Now there is very little left.
Very few opportunities to rescue
the UK economy are left. Except one,
which is to print money. So much money,
that the UK Government
will soon own 33 percent
of its own debt.
How? By simply printing on pieces of paper.
And giving you the pieces of paper
in exchange for government debt. It's a wonderful technique.
It costs nothing, only paper and ink.
This great invention was
created by Germany in the 1930s
with wonderful results. Which is the reason why,
the European Central Bank is so careful
today about inflation. So we live in a strange world.
For me, it is madness that the European Central Bank has continued to keep
interest rates
as high as they are today, when
a country like Spain, if you had your own economy,
I know your interest rates would be set at around
0.5 percent. Because that's what Spain needs
today. So these are huge complex challenges.
There are massive pressures and it is difficult
to see how the Eurozone can survive with one currency
but many governments. So we will see.
Because as we will see
in a moment, the future will not be driven by economics
nor by innovation. There is one word which will drive the future,
which will predicts how
this big conversation ends, and we will come to that. But,
in the meantime, there is another trend
to do with oil ,oil prices,
and how far they go. And this has been and additional pressure
on our world, at a difficult time
and the oil prices of course are related to
another question, which is the number of people
alive today, where they are, and how they live.