This article was published in the Frankfurter Allgemeine Zeitung on 18 December 2018. It was based on a presentation made on 16 November to the Progress Foundation in Zurich.
Gastbeitrag Bill White FAZ Dez 2018
Along with others, Mr White was invited to provide an answer to the question, posed by the magazine The International Economy, of how the Fed’s mandate might be changed. He suggested that efforts to raise inflationary expectations by changing the mandate were doomed to failure. Rather, the Fed should pay less attention to decimal point deviations from inflation targets and focus more intently on avoiding credit driven “busts” in financial markets. The article will be published shortly.
InternationalEconomyFedReform
In this article, published by Project Syndicate, Bill White lays out his reasons for believing that a forthcoming financial crash and subsequent global recession might be even more serious than the one that began in 2008. One important factor is that governments have a much reduced capacity to repond as well as a much reduced willingness to do so in a cooperative way. If rising nationalist tendencies impede collective policy action, which then leads to a worsening economic situation and still more nationalism, we would be on “an old, familiar, and extremely dangerous path”.
Bad Financial Moon Rising
The editor of The International Economy magazine asked a number of well known economists “What to make of the global dollar shortage?” The answers were published in the Summer 2018 edition. Bill White’s contribution emphasized systemic exposures linked to the major increase in dollar denominated liabilities issued (largely by corporations) by entities whose revenues were not generated in dollars. Should we pass through another phase of “Risk Off” investing, liquidity support in dollars from the Federal Reserve would likely be required. Whereas swap lines exist for European and some other central banks, no such lines currently exist for some emerging market economies likely to be on the firing line in the future.
International EconomySummer2018
Bill White gave an interview to Herman Hesse of Der Spiegel who referred to him in an article published (in German) on 8 September 2018.
HesseArticle2018Bill gave an interview to Real Vision, a subscription channel on the internet, which was put out on 18 August, 2018. The interview extends over 90 minutes and covers many of the economic and financial events shaping Bill’s long career. He concludes that the lessons that ought to have been learned from past crises have not been learned. As a result, the global economy not only faces severe risks looking forwards, but global authorities are also increasingly constrained in their capacity to respond. While seeing the full interview requires a subscription, some flavour is given by the following links.
In this interview, published in Börsen-Zeitung on 8 June 2018, Bill answers questions related to the Swiss referendum (the “Vollgeld” initiative) on whether a “narrow money”regime should be introduced in Switzerland. He agrees that the current fiat money system in place almost everywhere has serious deficiencies. Thinking carefully about how it might be improved or even replaced is a worthwhile endeavour. That said, replacing the current Swiss system with one so radically different, and at such short notice, coud result in unintended and undesired consequences. The interview in German, and the English translation, can be found below.
SchroersInterview8june2018Dimartino Booth refers to the speech which I gave on that occassion ” Ultra-Easy Money: Digging the Hole Deeper?”
MauldinDimartinrefWWJohn Mauldin refers favourably to my suggestion that perhaps easy monetary policy is creating disinflation, as debt headwinds reduce demand and zombie companies increase supply.
http://www.mauldineconomics.com/frontlinethoughts/data-dependent-on-imaginary-data
This article was published on the op-ed page of the Financial Times on 18 February 2018
https://www.ft.com/content/e1dc1286-0ccb-11e8-bacb-2958fde95e5e
