What we have with this economic crisis is the perfect storm, which was described by Governor of the Bank of England, Mervyn King, in the link above, as:
"There is not enough money. That may seem unfamiliar to people." [he told Sky News.] "But that's because this is the most serious financial crisis at least since the 1930s, if not ever."All of which makes our current situation potentially worse than the Great Depression. This is because; we still have a huge amount of debt in the system; we have nation states (like Greece) bust; we have bust banks; and all the economic levers, including record low interest rates, and QE, have been pulled, both here and in the USA. So there's nowhere left to go - not as far that is, as neoliberal economics is concerned - see Larry Elliot's article in the Guardian.
On top of all this, now we hear that yet another bailout of European banks is planned by Sarkozy and Merkel in the EU. This will cost at least £200 billion, but the EFSF could go up to €2 trillion. But hang on..... where is all this money coming from? Why, from you dear taxpayer, you and your children, and your children's children will have to fork out at least that amount, and possibly more, to bail out commercial banks. And yet, this really is the plan - a kind of madness.
The Guardian have summarised the current situation in their Eurozone graphic - see below:
|The Eurozone crisis - source: The Guardian|