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Federal Reserve suggest crisis is worst since the 1930s

US Federal Reserve chairman Ben Bernanke has issued a damning verdict on the worldwide financial crisis suggesting it is by far and away the worst since the 1930s depression. While the vast majority of governments around the world are pointing the finger at the US for the ongoing economic crisis,

Ben Bernanke believes that the problems relate to imbalances in trade and capital flows during the 1990s. Whatever the reason for the current situation there is no doubt this is the most serious threat to the world economy for over 70 years.

The US Federal Reserve believe that a lack of saving during the boom times in the 1990s led to a substantial increase in investments which pushed many asset prices, including property, to levels which were unsustainable. Once the sub-prime mortgage market started to unwind this caused a serious tremor around the world and many investors ran for the hills as capital flows and money market lending literally disappeared overnight.

Like so many governments around the world Ben Bernanke now believes that in order to avoid a full-scale recession all countries need to work together to re-energise the worldwide economy and ensure that money starts to flow around the world again.

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