In a 29 August article in the Financial Times, Paul Hodges and Daniel de Blocq van Scheltinga refer to an earlier interview that William White gave to the Daily Telegraph. The general concern he raised was that a growing level of global debt could trigger or exacerbate another global recession. More particularly, White stated his concern about the growing level of dollar denominated debt, issued by non residents of the United  States. This exposed the issuers to dangerous currency mismatch problems should the US dollar continue to strengthen. The recent depreciation of the renmimbi was worrisome in that regard, particularly if it sparked renewed capital flight from China, as was the possibility of another “Risk Off” phase in international capital flows.

FTReftoWilliamWhite

Martin Wolf, in his article of 14 May, 2019 in the Financial Times, made reference to some of my earlier publications that warned of a renewed financial crisis. He notes my concerns about a constantly growing ratio of non-financial sector debt to global GDP and the incoherence between the near term implications of monetary policy (expansionary) and financial regulation (contractionary) for aggregate demand. These problems, along with many other “imbalances” in the global economy arising from policy actions, might trigger a renewed crisis. Should exogenous forces, like a trade war, provide an alternative trigger for a new downturn, these “imbalances” will surely worsen it s magnitude and duration.

http://www.ft.com/content/f09cda30-7598-11e9-bbad-7c18c0ea0201