Former BIS Chief Economist Warns "More Dangers Now Than In 2007"

Tyler Durden's picture

Having warned in the past that "the system is dangerously unacnhored," former chief economist of the Bank for International Settlements, William White, told Bloomberg TV overnight that the current situation "looks very similar to 2008," adding that OECD sees "more dangers" today than in 2007.

The chairman of Economic and Development Review Committee at OECD, warned that prices are very high - in particular for high yield assets, VIX is very low, house prices are rising strongly, equity markets rising, and all these are a source of concern.

Additionally, White noted:

  • India’s debt problems go back a long way, and there are significant governance issues, including at state-owned banks.
  • China’s debt situation isn’t a lot different to India’s, but the acceleration of loans and credit growth in China is very fast
  • It’s not just the debt level in China that is worrisome, but the speed that it’s accumulating; maybe some of these loans won’t be repaid or serviced.
  • We don’t have a liquidity problem that central banks can solve - if we have too much debt, we have a debt resolution or insolvency problem and only governments can address problems like that.
  • World needs more fiscal expansion, structural reforms, and also have to look closely at debt write-off some of it and maybe recapitalize financial institutions.
  • We have got the mix of income that goes to capital versus labor wrong in many countries, and we need to look at that.
  • Central bank tightening is inevitable, but have to be careful.

As White concluded previously,

"it is every man for himself. And we do not know what the long-term consequences of this will be,"

and it appears to be getting worse.

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Pleb_From_Windsorstan's picture

Simple.

Unpeg the currencies & revalue Gold. Naturally, the countries without Gold or having Gold plated tungsten will collapse and your wishes will be fulfilled.

They will kill the West bitchez.

Lore's picture

Here's a forecast: I've been reading about incredible corruption in the electoral process in Germany.  It's actually worse than America's.  Given this, in the event that Merkel gets elected (totally impossible in any real, credible, upright universe), the people of Germany are going to take to the streets, and when that happens, the banking crisis will begin, starting with breakdown of the EU.  There are other reasons to believe that this month will be the last normal month this year, but I'm shutting down now. 

Fill your gas tank, stock up on popcorn and water and cash, and please, don't book vacations directly in the path of oncoming hurricanes...

Mr 9x19's picture

how could it be better than 2007, in 10 years they have fixed nothing...

sure it is worst, crooks.

 

look at the picture of the penis face. the small rictus, trying to prevent to smile, they're fucking euphorics.

fortunatly every one die one day.

runningman18's picture

The BIS and IMF always warn of economic dangers just before a crash - they like to wait until the last minute so that a practical response is impossible.  They did the same thing back in 2007/2008.  They do this so that they can later say "see, we predicted this", which is easy for them to do since they created the crisis in the first place.   

Dame Ednas Possum's picture

These occultists... they just feel compelled to announce everything. 

 

Oldwood's picture

They predict what they create.

Pollygotacracker's picture

College Park, M.D. is floating a proposal to allow illegal aliens to vote. It is here. Our elections are screwed.

Haus-Targaryen's picture

On the ground here. Merkel gets reelected and the Germans go about their day debating on whether to start teaching Arabic in schools and if it's okay to racially profile people claiming asylum from "Syria". 

For example, black guy shows up somewhere in Germany. Black as black gets. He speaks not a word of Arabic. He speaks fluent congolonese. He says he is from Syria with the help of a congolonese translator and says he is from Aleppo. He cannot remember his address or any basic geographic features of Aleppo. Can the social worker say he isn't actually from Syria and stop his asylum process? Current German law says no and he has to be treated as though he is seeking asylum from Syria and it is up to the courts to decided if he really is from Syria or not. 

I shit you not; this is actually how it is here. The majority of Germans don't think it should change. This place is truly fucked. 

evokanivo's picture

You STUPID STUPID fuck. "The people will take to the streets" ... No. Not at all. Have you learned nothing over your lifetime about people? The vast majority will do nothing until there is no food. Period. Full stop.

turkey george palmer's picture

I dunno Germans have a back channel rage they fear to display. That's why some are so reserved and calm. Don't like the emotions taking over. But if you push one too far he will go from kitty to tiger before you can blink. And grin like Santa while kicking your teeth in

Oldwood's picture

So many have missed the point. Economic degradation is for cause. It is done simultaneously with entitlements to soften the blow and reinforced with guilt ridden suicidal indoctrination telling citizens that their demise is only fair. Germans will lead the way as they will NEVER be allowed to forget Nazism, just as Americans will NEVER be allowed to forget slavery.....as though either were the originators of sin. All whites have been assigned shared blame at this point, and will suffer thusly. We are destined to a weakened and dependent state, and from there we can only rely on our oppressors kindness and generosity. Not a good bet.

What Jews and blacks have taught us about progressivism, is that in order to rule, you must first become a "victim". Maybe enough whites will survive to return the favor.

lucitanian's picture

You must be one of them:

Those who are fit to rule are those who realize there is no morality and there is only one natural right the right of the superior to rule over the inferior” - Shadia Drury, Leo Stauss and the American Right 1997

Haven't elitists and hangers-on like you done enough damage? Divide and conquer only works on the ignorant. So just STFU.

Rodders75's picture

Any sources on this Lore?

Crazy Or Not's picture

That goes double accross EU, Greece - disaster, Italy corrupt, France mostly broke, Spain fully broke, UK hiding head in a bucket.
Japan debt to the max, China Russia India going their own direction.
Shit's about to get real
https://media2.giphy.com/media/3XiQswSmbjBiU/giphy.gif

 

Rapunzal's picture

The BIS is Rothschilds owned like all the central banks. This is just the good cop bad cop game for the masses to believe there is a control mechanism with reason. But in fact the BIS is calling the shots world wide. It's all planned.

Putrid_Scum's picture

Did the War Game, The Reset has already begun, protect yourself. Read the latest additional chapter of The Reset "War Game for The Bank of International Settlements".

Putrid

Final preps now... we're running out of time

www.beforethecollapse.com/2017/05/23/the-reset/

Batman11's picture

The BIS have kept the secrets of money to themselves and this is the result.

Milton Freidman’s “monetarism” didn’t work because he didn’t understand the monetary system.

“…banks make their profits by taking in deposits and lending the funds out at a higher rate of interest” Paul Krugman, 2015.

Paul Krugman wasn’t equipped to work out the cause of 2008 as he didn’t understand money, debt and banks; so he attributed it to a “black swan”.

The US money supply leading to 2008:

http://www.whichwayhome.com/skin/frontend/default/wwgcomcatalogarticles/images/articles/whichwayhomes/US-money-supply.jpg

M3 going exponential, a credit bubble is underway (debt = money)

Milton Freidman’s “monetarism” would have stopped 2008 from happening, but it didn’t work.

We need to understand the “credit creation” theory of money if we are going to get anywhere.

It was understood in 1856 but we have been going backwards ever since.

Credit creation theory -> fractional reserve theory -> financial intermediation theory

“A lost century in economics: Three theories of banking and the conclusive evidence” Richard A. Werner

http://www.sciencedirect.com/science/article/pii/S1057521915001477

The credit creation theory of money is correct and is now acknowledged by the BoE.

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Fractional reserve theory was used to develop “monetarism” which didn’t work. Milton Freidman thought Central Bank reserves controlled the money supply.

Financial intermediation theory left Paul Krugman to come up with a “black swan” explanation for 2008, there are going to be more black swans if our economists stay with this nonsense.

The BIS use the credit-to-GDP ratio:

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

1929 and 2008 suddenly stick out like sore thumbs.

They kept it to themselves.

Batman11's picture

Steve Keen has read William White's work and agrees with it.

Steve Keen is ignored by the mainstream although he saw 2008 coming in 2005 using the graph above.

He had to work it out for himself as the BIS tell no one the important stuff. 

Steve Keen sees the following blowing up:

China, Hong Kong, Norway, Sweden, Belgium, Australia and South Korea.

The BIS has issued a warning on China, they like to wait until its too late. 

Batman11's picture

Goldman Sachs prepare your vulture funds to swoop in for mass fire sales of distressed assets.

As they did in the Asian crisis.

Thomas Jefferson in 1809 knows the benefits of financial instability to bankers:

“If the American people ever allow private banks to control the issue of their  currency, first by inflation, then by deflation, the banks…will deprive the people of  all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

Blackrock did very well buying up sub-prime defaults.

The sub-prime owner’s children woke-up homeless on the continent their fathers conquered.

Tent cities this way children.

 

CHX13's picture

No shit, Sherlock...

Grandad Grumps's picture

Willard White?

Cage him!

JPMorgan's picture

Many countries and less well know banks are on the brink of failure.

Central banks and governments have been playing the containment and rescue game for years now fearing run away contagion.  

We have the boom but they are desperately trying to prevent the next bust from happening, as they are aware that it could tip things over the edge this time around.

It's like a ticking time bomb where nobody knows how much time actually remains on the clock.

Wild E Coyote's picture

Best Statement:

  • We don’t have a liquidity problem that central banks can solve - if we have too much debt, we have a debt resolution or insolvency problem and only governments can address problems like that.

Right.... Central Banks job is to print the money and create the debt problem. Government job is to solve the debt problem by taxing the hard working people, and sell some national assets. 

well said

 

 

brushhog's picture

Incredibly insightful comment. Summed it all up in a few sentences.

Let it Go's picture

The blame game is on, it is them not us! The fact is they both suck.

Both Wall Street bankers and the government, including the Federal Reserve, hold great sway over the economy. This is true with bankers and central banks across the world. When forced to ask which is the worse of these two evils the answer is very troubling. Government wins hand down. We elect politicians to lead, protect and guide us, we do not elect or appoint bankers.

Years ago President Eisenhower warned the American people about the Industrial Military complex, but nobody warned us an even more evil alliance that of the "Financial-Political Complex." The article below explores this beast and how it came to be.

 http://brucewilds.blogspot.com/2016/06/lessor-of-two-evils-wall-street-bankers.html

beyondtheprogramming's picture

unacnhored??? Hurry and correct it. Oh, and maybe change the date and time on the story as well because we all value such shoddy journalistic standards.

ElTerco's picture

"We have got the mix of income that goes to capital versus labor wrong in many countries, and we need to look at that"

Simple first step -- tax *all* capital gains and dividends as income. That will go a long way towards rebalancing the system, and can normalize the system before implementing the real adjustments that are needed.