Former Morgan Stanley Chief Asia Economist: "Don't Listen To The Ruling Elite, The World Economy Is In Real Trouble"

Tyler Durden's picture

Authored by Andy Xie, the former Morgan Stanley chief Asia-Pacific economist, originally posted Op-Ed at The South China Morning Post,

Andy Xie says the world's elite that are attending the G7, G20, Davos and other wasteful meetings are wrong to try to pin the blame for the turmoil on people’s psychology; all signs point to a prolonged period of global stagnation and instability.

Before the current G7 meetings waste of time, The G20 working group meeting in Shanghai didn’t come up with any constructive proposals for reviving the global economy and, instead, complained that the recent market turmoil didn’t reflect the “underlying fundamentals of the global economy”. The oil price has declined by 70 per cent since June 2014, while the Brazilian real has halved, and the Russian rouble is down by 60 per cent. The global economy is on the cusp of another recession, and these important people blamed it all on some sort of psychological problem of the people.

Over the past two decades, the global economy has been blessed with the entry and participation of 800 million hard-working Chinese, plus the information revolution. The pie should have increased enough in size to make most people happier. Yet, the opposite has happened. The world has gone from one crisis to another. People are complaining everywhere. This is due to mismanagement by the very people who attend the G20 meetings, the Davos boondoggle, and so many other global meetings that waste taxpayers’ money and put inept leaders in the limelight.

One major complaint that people have is that the system is rigged – that is, the rising income concentration is not due to free market competition, but a rigged system that favours the politically powerful. This is largely true. The new billionaires over the past two decades have come mostly from finance and property. Few made it the way Steve Jobs or Bill Gates did, creating something that makes people more productive.

The most important factor in the rigged system is monetary policy being used to pump up financial markets in the name of stimulating growth for people’s benefit. This is essentially the trickle-down wealth effect, that is, making some people in the financial food chain rich while the spillover gives people a few crumbs. Yet, instead of crumbs, the wealth effect has pumped up property prices in Manhattan, London and Hong Kong, as well as the price of modern art. Essentially, the wealth effect has stayed within the small circle of the wealthy. And these people show up at Davos to congratulate policymakers on their “successes”.

Wasting resources is an equally important factor in making the global economy weak and prone to crisis. After the 2008 financial crisis, the US government and Federal Reserve spent trillions of dollars to bail out the people who created the crisis. Instead of facing bankruptcy and jail, these people have become richer than ever. Predictably, they have used their resources to rig the system further.

After 2008, when Beijing launched a massive investment push, the global ruling elite all praised China for saving the global economy. China has increased credit by over US$20 trillion to finance the construction of factories and homes. However, investment does not guarantee final demand. The process of building up a factory creates demand. But, when it is completed, it needs to sell its goods to someone. What China did was build even more factories to keep this factory occupied. This Ponzi scheme couldn’t last long. We are just seeing the beginning of its devastating consequences.

China’s overinvestment has pumped up commodity prices, which has led to another Ponzi scheme. As major central banks cut interest rates to zero, credit demand didn’t respond in general, as businesses didn’t see growing demand from people who were suffering income erosion. The commodity boom justified credit demand for the time being. Trillions of dollars were poured into the energy sector, and trillions more into other commodity industries. Businesses in emerging economies that were pumped up by rising commodity prices borrowed US$9 trillion. This mountain of debt is floating on a commodity Ponzi scheme that is floating on China’s investment Ponzi scheme. Its bursting is just the beginning. Its impact on the global financial system could be bigger than the 2008 financial crisis.

In addition to the bursting of the global commodity bubble, China’s overcapacity bubble will kill global capital expenditure for many years to come. Even though Chinese investment isn’t growing like before, investment at half of gross domestic product is still adding overcapacity by over US$1 trillion per year – the problem is getting bigger.

All indications are that China wants to export the overcapacity. And why not? China overinvested to bail out the global economy. It shouldn’t pay the whole price for the mistake.

China’s strategy would lead to de-industrialisation in most of the world, in particular middle-income emerging economies. Weak capital expenditure would lead to weak employment and labour income. The resulting bankruptcies may further weaken the global credit system.

The global economy is facing years of stagnation, deflation and financial crises. The current economic managers will resort to the same tricks of pumping up the financial markets with liquidity, to no avail. In the meantime, political instability will spread around the world. It will take a long time for the right leaders to emerge.

Initially, populists will win. Their policies, unfortunately, will focus on protectionism and rolling back the World Trade Organisation system. That will lead to further economic turmoil in the global economy. Protectionism may suddenly jump-start inflation that will quickly become hyperinflation, which would certainly lead to violent revolutions.

The world is on the cusp of a prolonged period of stagnation and instability. Our ruling elite is blaming it on people seeing things. Their strategy is to change people’s psychology. Unfortunately for them, the world is catching fire and that fire will eventually reach their Davos chalets.

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_ConanTheLibertarian_'s picture

"the world is catching fire and that fire will eventually reach their Davos chalets."

I like that!

gladius17's picture


So bright you need welding goggles......

The Merovingian's picture

Clearly you troll/work for them, so we will bring it to your house too, just as soon as we finish off the chalet .....

Burn it to the ground ....

38BWD22's picture



The Elites would suffer too if things get bad enough.

Because there are so many variables in play, a smart elitist would counsel caution in robbing and messing with the system.  I guess there are just too many THIEVES among the elite to even care.

If it gets bad enough, The Elites will get their houses/castles/bunkers burned down...

Bumpo's picture

Wall Street is intent on turning the public into bag holders, they know its just a matter of time before we all jump in. But We're wise to this game. Go ahead, ramp and ramp away. This time no one cares and the suckers will Wall Street

eforce's picture

All of this has been planned out long in advance...

"6. The people, under our guidance, have annihilated the aristocracy, who were their one and only defense and foster-mother for the sake of their own advantage which is inseparably bound up with the well-being of the people. Nowadays, with the destruction of the aristocracy, the people have fallen into the grips of merciless money-grinding scoundrels who have laid a pitiless and cruel yoke upon the necks of the workers (we are here).

7. We appear on the scene as alleged saviours of the worker from this oppression when we propose to him to enter the ranks of our fighting forces - Socialists, Anarchists, Communists - to whom we always give support in accordance with an alleged brotherly rule (of the solidarity of all humanity) of our social masonry. The aristocracy, which enjoyed by law the labor of the workers, was interested in seeing that the workers were well fed, healthy, and strong. We are interested in just the opposite - in the diminution, the killing out of the goyim. Our power is in the chronic shortness of food and physical weakness of the worker because by all that this implies he is made the slave of our will, and he will not find in his own authorities either strength or energy to set against our will. Hunger creates the right of capital to rule the worker more surely than it was given to the aristocracy by the legal authority of kings.

8. By want and the envy and hatred that it engenders we shall move the mobs and with their hands we shall wipe out all those who hinder us on our way."

-The Protocols

DownWithYogaPants's picture

China has always been a predator in the trade arena.  If other countries shut them out of their market there is no "responsibility because China bailed the world out in 2009".

They did 2009 for internal reasons.  Live with it.  On the planetary scale the free market still has some currency because the physical laws of reason are beyond fiat. Thank god!

NidStyles's picture

I love how the detractors always say the protocols are a forgery, which means they are a fake copy of the real thing.

philipat's picture

I wonder what the author got fired (Presumably without his bonus) for? It's strange how they always get religion when they are "Ex" Head of..............

The Saint's picture
The Saint (not verified) philipat May 28, 2016 8:41 PM

I didn't get much out of this article.  It was mostly generalities.

Graph's picture

New occupation, "Sustainable farming" does it to the people.

sharonsj's picture

From "rationalWiki":

The Protocols of the Learned Elders of Zion is a faked booklet written by Mathieu Golovinski, a French-Russian Okhrana operative. The main text of the Protocols was created by Golovinski in 1897, at the request of Piotr Rakhkovsky, head of the Okhrana's French section. After hitting on the idea of writing a fake "transcript" of the events at the First Zionist Congress at Basel, he contacted Golovinski, then living in exile in Paris, and asked him to write this "transcript". Despite being shown to be a hoax as far back as 1921, it is still distributed and believed by people who swallow whatever fiction fits with their racist views.

You are nothing but a bigoted asshole.

Bro of the Sorrowful Figure's picture

ah yes, it comes from "rational" wiki, so obviously it must be true. here is their "rational"  take on 9/11.

What really happened

The story as pieced together by government and civilian authorities was that 9/11 was a followup to the failed Bojinka plot, created by al-Qaeda under the auspices of founder Osama bin Laden. On the morning of September 11, 19 men, mostly from Saudi Arabia, hijacked four planes out of Boston, New York City, and Washington, DC, and without giving away their intentions redirected the planes on kamikaze missions towards four American landmarks on the east coast — the Twin Towers of the WTC in New York, the Pentagon, and an unknown fourth location theorized by some to have been the White House or the Capitol building (the last plane was brought down through passenger interference, in an open field outside of Shanksville). The attacks resulted in the complete collapse of the World Trade Center twin towers in New York City (now known as Ground Zero) and heavy damage to one side of the Pentagon,[4] and the deaths of just under 3000 people, some 400 of whom were police, firefighters (with 3/4 of the responder casualties) and EMS workers in and around New York City alone.

Later analysis showed that the World Trade Center towers, constructed as a stack of floors anchored between the building's facade and a central steel girder cage, had much of their steel structure weakened (not melted) by large amounts of burning jet fuel, a lot of which had been atomized on impact; a third tower on the site, WTC 7, was badly damaged by falling debris from the tower collapses and was on fire,[5] and collapsed several hours later of its own accord. The Pentagon, where the impact site was in an area of the building that had been recently renovated and not fully reoccupied, had heavy but highly compartmentalized damage and comparably light casualties.

The cleanup took many months, complicated by the jet fuel fire under the WTC debris and the need to recover the bodies of the dead.


that's all i needed to know about "rational" wiki.

A Pimp's love is different's picture

That's some funny shit there.


The only thing 'rational wiki' appears to have left out was that the 5 Dancing Israelis were actually dancing around a campfire in a ancient ceremonial trance like ritual in an effort to prevent Silversteins buildings from pancaking at free fall speed.

gonetogalt's picture

Since the true origin of the Protocols has been intensly debated for over a century, why not post a link...seeing as you think you have some insight?

And BTW, any ideas of the purpose of the writing? Oh yeah, the wicked anti-semetic Tsar for sure. So what ? Look where he ended up in Ekatrinburg or where ever a few years later.

So why? A warning? Prophetic? Guide book for those who would implement? Some kind of moralizer, as "we warned you"? A requirement of G-d or Baal?

You can't fault the dead on accuracy of the Protocols, the construct is literary license, truth presented in a way to mask the teller's identity.

Of all the things you can call the Protocols, Hoax isn't one of them.

At least you're not bigoted.

Tall Tom's picture





I learned something new today...


The literal meaning of the word, mortgage, means to be engaged in a contract until death. Are you mortified by this prospect of enslavement?


Yes. The mort gage is the grip of death.

Young Buckethead's picture

I agree. It doesn't matter who wrote it. 'Someone' wrote it, and over the decades it has been proven to be deadly accurate.

All this crap about Jews, blacks, whites, browns, yellow, Masons, Lucifer worshippers, on and on. There are only two kinds of people in this world, those that want to live and let live, and assholes that think different. The assholes seem to have taken over most of the world, certainly everything that makes the world go 'round, and the rest of us are unhappy about it.

That's ok, there is a Great Cleansing coming, that is going to wipe the entire slate clean. Smoke 'em while you got 'em, boys.


peddling-fiction's picture

YB, there are those who do not want to let live yet are highly organized and run a tight operation.

And have been for millenia. They have tons of experience. Wishing them away will not work YB.

Young Buckethead's picture

Oh, I'm not talking about just them. We're all going.

Every living, breathing animal on this planet has enriched uranium and/or plutonium in their systems by now, and growing by the day.

They can go down into a hole, or fly to a private island, or shoot into space, but there's no escaping what's already melting their DNA.

Wannabe_Oracle's picture

Can you say what it is - the 'DNA melting'.. ./

Tall Tom's picture





Isn't a melt going from order to disorder?


If I melt a crystalline solid then it loses its crysatlline structure. The crystal form is lost in the melt.


When the DNA is impacted by those subatomic particles then it loses its structure as the Genetic material is cooked.


It is melting.


Yet that is not what his going to kill everyone.


Without phytoplankton there is no breathable air as first the Oceans, and following thar, the atmosphere, slowly becomes depleted of Oxygen.


The Oceans are responsible for the creation of 70% of atmospheric Oxygen through the photosynthetic process from the phytoplankton.


And like a conveyor belt that North Pacific Current brings those phytoplankton blooms in close proximity to Fukushima where the Radioactive waters kill them off.


The Oceans, Oxygen depketed, become acidic with an abundance of Hydrogen Ions.


Of course the EMPIRICAL EVIDENCE that Oceanic Reduction is happening is the Starfish kill off of the Pacific Northwestern USA coast. Now this has been attributed to acidic waters due to AGW. BULLSHIT.


I know that is not the case. It is due to the phytoplankton population depletion caused by the Fukushima accident.


Happy slow suffocation. From what I have read it is not that unpleasant. You experience some euphoria before you succumb. Not a bad way to go, dying laughing.

gmrpeabody's picture

Well.., I don't know about all that, but I had a great tuna melt yesterday for lunch.

algol_dog's picture



"A little learning is a dangerous thing; 

 drink deep, or taste not the Pierian spring: 

there shallow draughts intoxicate the brain, 

and drinking largely sobers us again."

CC Lemon's picture

One might argue that there are two types of people:

Those who would love to take over the world, but can't, so they shrug their shoulders and live and let live.

Those who would love to take over the world, and can, so they do.

shrimpythai's picture

and a third type of person/human being - Those who don't want to take over the world, so they live and let live and love their neighbors as themselves.


gdogus erectus's picture

"Faked" booklet? Have you read it? It is SPOT on and clearly the EXACT playbook that is being used. That stuff at the end always makes me scratch my head though.....

Lore's picture

I wonder if a troubleshooter should focus more on the flawed mechanism of debt issuance in the wrong hands as an instrument of control, and the manner in which it enables unchecked parasitism -- including the immense bubbles in BANKING AND GOVERNMENT -- to undermine, overwhelm and destroy markets and capital and productive economies.  It's important not to mistake symptoms for causes.

Similarly, if there's anything that we've learned from international affairs, it is that one should strive to distinguish between puppets, proxies and puppeteers.  The Protocols seem crude, smearing an entire exoteric group. I wonder if Political Ponerology isn't more accurate for the way in which it identifies and defines a sub-stratum (sub-species?) of scheming, manipulative PSYCHOPATHS who are natural chameleons, innately talented at hiding and blending in and hijacking any and all other groups for their own benefit. Their broken psyche and worship of POWER is the source of the great mistakes and imbalances and atrocities of human history. This time seems no different:

If the many managerial positions are assumed by individuals deprived of sufficient abilities to feel and understand the majority of other people, and who also exhibit deficiencies in technical imagination and practical skills - (faculties indispensable for governing economic and political matters) - this then results in an exceptionally serious crisis in all areas, both within the country in question and with regard to international relations. Within, the situation becomes unbearable even for those citizens who were able to feather their nest into a relatively comfortable modus vivendi.  Outside, other societies start to feel the pathological quality of the phenomenon quite distinctly.  Such a state of affairs cannot last long.  One must then be prepared for ever more rapid changes, and also behave with great circumspection. (2nd ed., p. 140)

Trogdor's picture

I have a friend who for years refused to read the Protocols because he felt it was "Anti-Semitic" and a host of other highly-propagandized reasons.  At one point I suggested to him, "Try reading it without thinking it's about any particular race, and ask yourself, "Are these things happening?"  His response?:  Holy. Shit. Somebody is running this playbook perfectly!

Anyone with the ability to actually form their own thoughts can read the Protocols, see what is being talked about (taking over media, banking, government, cultural destruction, enslaving people financially, etc) and then go on over to TheZOG and see who, exactly, is holding those positions or leading the charge.  Whenever I see something evil popping up I always look at who's standing out front, and more often than not, it's a Chosenite.

Again, I believe there are great Jewish people - Warriors for Freedom - but the Jewish people need to wake up and realize that there are parasites in their ranks that use them as cover.  They need to root them out and expose them, or they will continue to share the blame for their actions.

Cornfedbloodstool's picture

No way "We are here". We are at the end of 7 and descending into 8 rapidly.

gswifty's picture

I have one word for these 'elders' who mean to impose subservience via mass starvation. Aquaponics.

NoDebt's picture

Steal while the stealing is good.


AGuy's picture

"Wall Street is intent on turning the public into bag holders, they know its just a matter of time before we all jump in"

I don't think so. The Public is pretty much broke. What capital they have left will likely remain in low risk, investments. Wall Street is focused on the Gov't as gov'ts are the last investors left. You can see it with the TPP, the Derivatives backing, and so.


Main_Sequence's picture
Main_Sequence (not verified) 38BWD22 May 28, 2016 2:14 PM

There is no honor among thieves.  The final looting has already begun.

The Zoligarchs abuse and robbery of the people will unquestionably come back and bite them.  It's not a matter of 'if', but a matter of 'when'.

peddling-fiction's picture

I always knew their last stand would be on their yachts or their tropical island somewhere.

Anybody heard of Kon-Tiki?

For those so inclined, remember they have a slew of anti-piracy weapons.

bonin006's picture

Those on the receiving end of justice will call it vengeance. Don't fall for PC bullshit designed to keep people under the boot.

God's picture

In America you Supreme Court justices are almost all Jews now. It won't be long before The American Goyum can only seek vengeance.

Herd Redirection Committee's picture

Sotomayor is only a cryptoJew.  Us goys aren't supposed to count them.

RaceToTheBottom's picture

Not sure exactly why, but I think that is a fundamental mistake.


Perhaps it is exactly because each response is a training event for the future.

peddling-fiction's picture

It is clear that there is a lot of anger, and thirst for blood. I do not include myself amongst this group.

However, violence must be met with violence.

Everything we do (and not do), say (and not say) and think are building steps towards our destiny.

peddling-fiction's picture

Very few of you have seen a person bleed to death.

I am sure if you do, your thirst to see more will dissappear, unless something is wrong with you.


ElectroGravitic's picture


This is how we make them irrelevant. Then they become easy targets.


Tall Tom's picture





When you get those Pearly Gates are you going to be seeking justice?


Or mercy?


They enjoy their day in the Sun now.


Pray that they repent from their wickedness.


Yeah I know what I want to do. But I keep fighting myself....I am kind of like Tyler in Fight Club, double minded, beating himself.


That is the reason that I refrain from acting out and destroying all that I can. Though I suffer indignities now in the long run I will win if I refrain.


I am just looking forward to the destruction of evil.

peddling-fiction's picture

Tall Tom, stay tall. Evil will be destroyed. But the destroyers of evil sometimes are sinners as well, unless they are acting out of self-defense, or left with no other option. You will know the difference.

We are all allowed to be tempted, but not to fall into temptation.

38BWD22's picture



Yes and yes to you above two.  We will all be judged in one way or another.  Such is eternal life...