April 21, 2008 (LPAC)--The Bank of England today announced a bank-bailout plan under which it will loan government bonds to banks, taking in exchange a variety of securities as collateral. The initial amount of such loans was said to be in the range of $100 billion, though no "arbitrary limit" will be imposed, and the loans will be for a period of one year, extendable to three years. The collateral accepted will be mainly securities backed by U.K. and European residential mortgages, as well as some backed by credit-card debt, and no securities based upon U.S. mortgages will be considered. $100 billion, we should note, is far less than the Fed has already pumped into the U.S. banking system, suggesting the Bank's actions may be more illusion than substance.

This announcement follows meetings held last week in London and the U.S. by British Prime Minister Gordon Brown with leading bankers, Fed chairman Ben Bernanke, President Bush and presidential candidates Hillary Clinton, Barack Obama and John McCain, as part of a British effort to lure the U.S. into similar moves to bail out banks holding U.S. mortgage-related securities and other worthless paper. As we have warned repeatedly, the ongoing attempts to bail out U.S. banks is inherently hyperinflationary, and the Bank of England knows it. The destruction we have seen so far will pale into comparison to the damage done to the nation by hyperinflation if we continue down this path. Hyperinflation, as we saw in pre-Hitler Weimar Germany, is a nation-killer.

The Bank of England, which was erected on the site of an ancient bull-sacrificing Mithra temple in the City of London before it moved in 1734 to a nearby location, is sometimes known as the Old Lady of Threadneedle Street, but considering its financial condition and its role in the Anglo-Dutch Liberal system, it is more aptly described as Mummy. The Bank of England actually outranks the government in the British financier cult system.