People get ready: An era of shortages is going to replace our era of plenty

The C D Howe Institute in Toronto published on 5 December an Intelligence Memo written by William White. Essentially a short letter written to the Canadian Minister of Finance, the Memo identifies six sets of negative, future  supply shocks that will put upward pressure on Canadian prices in the next few years. Adding to the difficulties, the Memo also identifies a number of sectors where higher investment spending will be required – not least to deal with environmental issues. To mitigate inflationary pressures, and to  avoid a potentially dangerous reliance on tighter monetary policy, White implies that consumption should be constrained through targeted fiscal measures.

https://www.cdhowe.org/intelligence-memos/william-r-white-people-get-ready-era-shortages-going-replace-our-era-plenty

 

 

Posted by williamw in Publications

A conversation with a candid central banker

On December 15, William White had a “Deep Dive” discussion with Danielle Martino Booth on Hedgeye TV.  White suggested that central banks had used the wrong analytical framework to guide their monetary policy and that, as a result, the global economy suffered from many sources of instability – not least unexpected inflation. He added that a number of impending, negative supply shocks would worsen inflationary pressures over the medium term and make policy choices still more difficult. The discussion ended by reverting back to flawed analytical frameworks and efforts to make the economic curricula at universities more relevant to real world problems.

https://app.hedgeye.com/insights/126114-deep-dive-william-white-1-on-1-with-danielle-dimartino-booth?type=guest-interviews%2Cmarket-insights

Posted by williamw in Interviews

Korean debt crisis is a cautionary tale as era of easy money ends

William White was quoted in a Bloomberg article focused on recent problems in Korea’s financial markets that eventually required forceful intervention by the authorities to restore order. White felt that many other countries might face similar problems as monetary policy tightened after many years of unusual ease which had invited leverage and imprudent behaviour.

https://mail.google.com/mail/u/0/#inbox/FMfcgzGrbRWfJNNvlfGZrlNRwSWLwFDx

 

Posted by williamw in Press, References

Letter: How policymakers avoid a ‘cascade of tipping points’

A letter from William White was printed in the Financial Times on 2 December 20 2022. White wrote in support of an earlier article by Martin Wolf called “How to think about policy in a polycrisis”.  A number of interacting systems, each essential for human survival and progress, are currently and simultaneously under threat.  Policy solutions that focus on only one system, without thinking about the effects on other systems, could well prove counterproductive.

https://www.ft.com/content/0472dc81-2b47-46bb-9f07-fd747796e4bf

 

Posted by williamw in Articles, Press

Escaping the Debt Trap

William White and Joseph Wang (“Fed guy”) were recently interviewed by Jack Farley on Blockworks Macro. Both provided an assessment of the Fed’s recent policy moves and the balance of risks looking forward. White was particularly  concerned about a series of prospective, negative supply side shocks that would worsen all of the policy tradeoffs facing central banks. To complement monetary restraint, he suggested that governments in advanced economies should rely more on reducing consumption through fiscal measures. As well, better procedures to facilitate orderly debt restructuring would be required for an emerging “era of shortages”.

Posted by williamw in Interviews, Press

The future of policy modelling

William White contributed to the opening panel of the 25th Central Bank Macroeconomic Modelling Workshop, which took place from 9-11 November. In his remarks, White said he would evaluate recent developments in modelling from a particular perspective: namely, that economies were complex, adaptive systems with associated properties. From this perspective, he concluded that many recent developments (recognition of uncertainty and non-linearities, more reliance on scenarios than forecasts etc.) would improve the conduct of monetary policy. In contrast, White identified some neglected areas (supply side developments, the possibility of financial instability etc.) that needed to be more closely integrated into models and the monetary policy framework. His written notes and the recording are available below

LaxtonPanelRemarks9November2022.docxpdf

 

 

Posted by williamw in Presentations

Central bankers were warned about their failed policies

Alan Dunne of Top Traders Unplugged (TTU) interviewed William White on 21 October 2022. TTU is a long running podcast for investors, with more than 7 million downloads since inception. White spoke about what he perceived to be fundamental shortcomings in past monetary policy in the advanced market economies, and some of the attendant risks going forward. Recent events in the UK gilt edged market  underline the risk that future inflation control could be compromised by financial dominance or fiscal dominance or both. Anticipated negative supply side shocks will aggravate existing policy tensions.

https://www.toptradersunplugged.com/podcast/william-white-global-macro-series-november-2nd-2022/

Posted by williamw in Interviews, Press

“The Fed’s Big Inflation Fight”

William White participated in a panel, organized by the American Enterprise Institute, that also included Don Kohn and Kevin Warsh (both ex Fed) and Desmond Lachman of the AEI. White expressed concern about a plausible future combination of negative supply shocks and a strong need for increased investment. These two could only be combined, without more inflation, if consumption could be reduced to free up resources. Fiscal restraint, especially higher taxes, seemed a better instrument for reducing consumption than monetary restraint, especially given the current fragility of the financial system. However, in the current political climate, tax increases seem unlikely.

White’s speaking notes and the video can be found below.

AEIPanelOctober2022FedsBigInflationFight

https://www.aei.org/events/the-federal-reserves-big-inflation-fight/

 

 

Posted by williamw in Presentations

Is a Dollar Crisis Coming?

This article was published in the Summer 2022 edition of The International Economy. William White notes that forecasts to date which have predicted the demise of the US dollar have been wildly inaccurate. Nevertheless, the arguments supporting those earlier forecasts remain valid and may even have strengthened over time. White suggests there are reasons (solid) for anticipating another global economic and financial crisis, and for believing (less solid) that this could finally trigger a dollar crisis as well.

InternationalEconomyIsaDollarCrisisComingSummer2022
Posted by williamw in Publications