Posted on 01/21/2015 4:46:57 PM PST by 9thLife
The economic prophet who foresaw the Lehman crisis with uncanny accuracy is even more worried about the world's financial system going into 2015.
Beggar-thy-neighbour devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well...
"We are in a world that is dangerously unanchored," said William White, the Swiss-based chairman of the OECD's Review Committee. "We're seeing true currency wars and everybody is doing it, and I have no idea where this is going to end."
...He said the global elastic has been stretched even further than it was in 2008 on the eve of the Great Recession. The excesses have reached almost every corner of the globe, and combined public/private debt is 20pc of GDP higher today. "We are holding a tiger by the tail," he said.
He warned that QE in Europe is doomed to failure at this late stage and may instead draw the region into deeper difficulties. "Sovereign bond yields haven't been so low since the 'Black Plague'...
...Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market," he said.
...Mr White said QE is a disguised form of competitive devaluation...
...His legendary report in June 2008 openly discussed whether the world was on the cusp of events that might prove as dangerous and intractable as the Great Depression, as it indeed it was...
...He deplores the rush to QE as an "unthinking fashion"...There are serious side-effects building up and we don't know what will happen when they try to reverse what they have done."
(Excerpt) Read more at telegraph.co.uk ...
Very scary
Pretty sobering comments, fer sure.
Indeed
“”Sovereign bond yields haven’t been so low since the ‘Black Plague’”
We see them going full blown U.S. Extortion-Care, to backstop the entire thing on real Americans assets, minus The Exempt Ones.
Those of us that are totally debt free including your home, will be just fine, but those deeply in debt will get screwed big time. That’s when the Money Changers swoop up all the defaulted properties, then the taxpayers bail them out for all the bad loans they made to people that could not afford it. I fully expect Real Estate to crash by the end of this year, right after all the Car Loans default.
Let’s see Mr. William White’s investment portfolio. Then I’ll decide whether he’s the egg or the bacon.
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