"The problem that many people have is that they think that 2008 was ‘the event’ and that it cleared the brush and we’re back to a sustainable path," but, as TTMYGH's Grant Williams explains to MacroVoices' Erik Townsend, "nothing could be further from the truth."
What is more troublesome is that, as Williams exclaims, "the glue that binds all of this together, unfortunately for everybody, is faith in central bankers," and 'Laws of Nature' dictate that "this will end very badly, but end it will."
And most worryingly, for everyone, "wars are, unfortunately, a very convenient solution to a lot of the problems that governments face."
Erik and Grant's conversation is must-view as they discuss:
- The likelihood of a US recession
- The unsustainability of global credit growth
- The continuing erosion of faith in central bankers
- The response to negative interest rates in Japan
- The excesses promised by politicians to citizens of Western Democracies
- "The Consequences of Economic Peace"
- Big Cyles, Kondratieff Waves, The Laws of Nature
- The similarity between current times and the lead up to WWI
- Thinking about outcomes we'd rather not and assigning probabilities accordingly
Full discussion below (via MacroVoices.com):
19:30 - “The problem that many people have is that they think that 2008 was ‘the event’ and that it cleared the brush and we’re back to a sustainable path, but nothing could be further from the truth.”
20:05 - “The glue that binds all of this together, unfortunately for everybody, is faith in central bankers.”
20:30 - “I think when you look at it and you look at the chances of these guys being able to fix this, they are very slim indeed.”
20:50 - “To have something as ephemeral as confidence in a group of academics holding the world financial system up is a terrifying prospect to me, because we don’t when when it will evaporate, or what might trigger it, but it could be tomorrow, it could be in three years…”
23:55 - “The Laws of Nature dictate that this will end very badly, but end it will. In the meantime you extend and pretend.”
26:45 - “At these points in time there is always a conflict somewhere between two global powers, and we’re seeing the embers of that.”
28:20 - “You cannot rule out the possibility of war... Sometimes the probability may be at fractions of a percent, but I think it’s more than that right now and it’s something people need to be very much aware of. And the more the economic pressure ratchets up on these governments…the more there is a need for a solution, and wars are, unfortunately, a very convenient solution to a lot of the problems that governments face.”
29:00 - “As the pressure increases, that level of probability (of war) increases significantly, and the possibility for a miscalculation ratchets up every single day.”
Finally, here is TTMYGH.com's Grant Williams' latest (and scariest) presentation - "Duck Test" - if it looks like a 'duck', quacks like a 'duck', and smells like a 'duck', it must be a... recession...