On 7 December 2020, William White reviewed in the Wall Street Journal a book authored by Charles Goodhart and Manoj Pradham. The book documents how positive demographic developments have spurred real growth and restrained inflation over recent decades, and presents convincing evidence that these forces are now going into reverse.  This will have profoundly negative effects, for which the governments of advanced countries are ill prepared. This well written book needs to be read by politicians, government officials and concerned citizens. Its message concerns us all.

https://www.wsj.com/articles/the-great-demographic-reversal-review-the-perils-of-aging-11607381251

William White was interviewed by Daniel Stelter on 13 December for a podcast called “Beyond the obvious”. A wide ranging discussion of recent and prospective central bank policy emphasized the problem of debt accumulation and different ways of dealing with it. The discussion also touched upon Modern Monetary Theory and the possible implications should many governments and central banks try to implement policies of “financial repression” like those pursued by the UK and the US  after World War ll.  The interview in English proceeds at minute 42 of the podcast, being preceded by Dr Stetler’s summary in German of the discussion.

https://think-beyondtheobvious.com/die-zentralbanken-loeschen-mit-benzin/

William White was interviewed on 16 November by Jim Grant, editor of “Grant’s Interest Rate Observer”. The conversation ranged widely over issues related to central banking and future economic prospects. Both the pandemic and the buildup of unintended side effects arising from ultra-easy monetary policy pose challenges going forward. Grant wondered why central bankers seemed to ignore these side effects when setting policy. White suggested that monetary policy in recent years had been captured by circumstances. With both fiscal policy and regulatory policy having restrictive effects on aggregate demand, expansionary monetary policy had been left as the “only game in town”. In response to the pandemic, it was welcome that fiscal expansion was now playing a larger role. White cautioned against too early fiscal tightening, as happened after the Great Financial Contraction, but also warned that the patience of markets towards highly indebted sovereigns would not last forever.

https://rvtv.io/38SswP5

On November 16, The Market, a Swiss financial paper, published an interview  with William White conducted by the editor, Mark Dittli. White pointed out the existence of a vicious circle that has been repeating for decades. A financial crisis elicits a necessary central bank response that eventually leads to easier monetary conditions. This encourages even more debt accumulation (and leverage) that leads to another and even more serious  financial crisis and so on. This process is not sustainable. In the last part of the article, White refers to a set of commonly held beliefs that are simply not true.

“The idea that price stability is sufficient for economic stability? Wrong. That easy money always stimulates demand? Wrong. That the economy is self-adjusting, back to a full employment equilibrium? Wrong. That financial markets are efficient and bad things can’t happen? Wrong. That wealth will trickle down to all levels of society? Wrong. These are big beliefs. And false beliefs are dangerous”.

https://themarket.ch/interview/william-white-central-banks-keep-shooting-themselves-in-the-foot-ld.3053