September 19, 2007 (LPAC)--Mervyn King, Governor of the Bank of England (BoE), acting on Sep. 19 in concert with the Bank's Court of Directors, announced another major mechanism for injecting huge amounts of liquidity into the British and world banking system, revoking in its entirety King's claim of a month ago that he would stand fast and let failing financial institutions collapse under their own weight.

The BoE said that it would lend 10 billion pounds ($20 billion) to commercial banks. The loans will have a maturity of 3 months. Most important, those banks that are borrowing from the BoE can post mortgage-related paper as collateral for the loans, according to the BoE's website. The BOE stated that this auction-- its making of loans-- would be followed by three further auctions, held at weekly intervals; further, that while the size of the first auction would be for 10 billion pounds, "the size of future auctions will be decided in due course," ie, the amount could be increased.

The BoE said in its posted statement that it is undertaking this set of loans to "alleviate the strains in longer-maturity money markets," a windbag banker's way of saying that the credit markets are freezing up. King's flight forward action indicates, that as Lyndon LaRouche has said, the financial disintegration is overwhelming the limited capacities of the actors, and is far more systemic than anyone but he has the courage to admit.

King is committed to saving those wealthy oligarchical families, that formed and control the BoE. However, King's panicked decisions over the last 7 days - to provide an unlimited credit line to the bankrupt Northern Rock mortgage-lender; to issue 7.25 billion pounds of inter-bank lending on Sept. 17; and now to make a serious of 10 billion pounds longer-term, bail-out loans - will produce exactly that Weimar style hyperinflation which insures the system comes down.