Press

23
Jan
2025

Is a serious global debt crisis likely?

This question was adressed by a number of economists in the Summer 2024 edition of The Internationl Economy. William White (page 25) noted that the global economy is a complex, adaptive system and such systems often break down. We have had three major, global recessions since 1990 and they have all arisen from the financial sector. In each case, a sharp easing of monetary policy led to a debt buildup that then contributed to the next financial crisis as interest rates rose again.  Moreover, the credit granted as a counterpart to this debt has increasingly been granted by non-regulated entities. We do not know who has lent to whom. Against this backdrop, we now seem likely to encounter a number of inflationary pressures arisisng from secular forces; demographics, deglobalisation, climate change etc. A future, global debt crisis now seems more than likely.

 

InternationalEconomyTIE_Su24_GlobalDebtSymp

 

Posted by williamw in Articles, Press
05
Nov
2024

Central banks need escape route from cycle of boom and bust

In his FT article of 1 November, 2024, John Plender made favourable reference to my most recent publication “Why the monetary framework in advanced countries needs fundamental reform”. It has been published as a chapter in the book “The age of debt bubbles”, edited by Max Rangely and published by Springer. Plender concludes that we urgently need debate on excessive monetary easing and the neglect of credit and debt developments. I totally agree, and would add (see my recent AEI presentation) that central banks have essentially ignored supply side developments as well.

https://www.ft.com/content/72b48b7d-ec17-4135-aa40-98b96eec2e64

Posted by williamw in Press, References
21
Oct
2024

Grading the Negative Rate Experiment

A panel of economists responded to this challenge in the Spring Edition of  “The International Economy”. The panelists assessment were almost evenly divided between “A” and “F”  with an equal balance of division across all the letters in between. William White aligned himself with those giving an “F” ranking. While negative rates did not lead to the catastrophic outcomes suggested by some, they constituted an extension of the ultra-easy monetary policies in place since the Great Financial Crisis. White believes these policies were fundamentally misguided, leaving us exposed to both “financial dominance” and “fiscal dominance”.

InternationalEconomyGrading the Negative Rate ExperimentJune 2024

Posted by williamw in Articles
08
Aug
2024

Moving from an Age of Plenty to an Age of Scarcity

Wiliam White was interviewed by Ed D’Agostino of Mauldin Economics on  August 2, 2024. The conversation was centered around White’s view that a combination of negative supply shocks, and the need for massive expenditures to confront national security, environmental and other requirements, would in the end have to squeeze consumer expenditures. Higher interest rates would be part of the process for doing this. Transitioning to an Age of Scarcity will create formidable political challenges to the democratic order. The interview itself, and the transcript, are attached below.

 

EdD'Agastino(!)240808-gmu-transcript-william-white

https://youtu.be/d2GG2u7agsE

Posted by williamw in Interviews, Press
30
Mar
2024

Black Gold or Devil’s Excrement?

This article was William White’s response to the question posed by the editors of The International Economy to a panel of economists. It was published in the Fall 2023 edition of the magazine. White notes (page 6) that a country endowed with natural resources is “blessed” but that poor governance can turn that blessing into a resource curse. Similarly, the whole world has been blessed until recently with ample natural resources, especially fossil fuels, but going forward very different circumstances will prevail. Adapting to climate change implies threats to production capacity, of food in particular. Mitigating climate change implies restricting the use of otherwise available energy sources and their costly replacement. Adapting to these changed circumstances poses threats to both economic and political stability.

 

 

InternationalEconomyBlackGoldAutumn2023

 

Posted by williamw in Articles, Press
21
Dec
2023

Why the monetary policy framework in advanced countries needs fundamental reform

Chris Sheridan, host of FS Insiders Podcast, recently interviewed William White about his most recent INET Working Paper. White reviewed the various shortcomings of the current framework; not least, how it has contributed to ever bigger credit bubbles and and ever higher stocks of both public and private debt. In spite of these developments, central banks showed no willingness to reassess either the framework itself or the set of false beliefs on which it rested. White expressed the hope that the conduct of monetary policy could be improved while maintaining the current institutional structure. However, he felt that it was also appropriate to assess seriously alternative and more radical options like the introduction of a “narrow money” regime. The widespread introduction of central bank digital currencies might facilitate such a change

https://www.dropbox.com/scl/fi/4z8kmp8g1je5nrxeto75l/Bill-White-FSN-Interview.mp3?rlkey=cmj8y4g6fwjr6nxy1v6ziyk02&dl=0

Posted by williamw in Interviews, Press
18
Sep
2023

Reflections on the 15th Anniversary of the Failure of Lehman Brothers

INET recently posted a short article by William White in which he stated that the failure of Lehman Brothers should not be treated as an isolated event. Its ultimate cause was a longer-term process through which a combination of monetary, regulatory and safety net policies were steadily increasing systemic risks and making significant financial crises almost inevitable.

https://www.ineteconomics.org/perspectives/blog/reflections-on-the-15th-anniversary-of-the-lehman-brothers-failure

Posted by williamw in Articles, Interviews, Press
14
Aug
2023

Bonds are no longer the safe option

John Plender of the Financial Times wrote an article, published on 12 August 2023, in which he referred at length to my thesis that the world is moving from an “Age of Plenty” to an “Age of Scarcity”. This was the transition referred to by Keynes and which prompted him to write “How to Pay for the War” in 1940. My use of Keynes’ words was intentional and was intended to suggest that we might  be facing similar economic and financial challenges in the near future.

https://www.ft.com/content/91f39150-9abe-4257-8d52-17520d35e534

Posted by williamw in Press, References
03
Mar
2023

Era of shortages forcing rates up

MNI Market News posted on 3 March a podcast with William White, conducted by Greg Quinn of the Ottawa bureau. White listed a variety of reasons for expecting future aggregate supply to be constrained, and for future investment needs to strengthen. This implied a sustained need for higher real and nominal interest rates, raising fears of both financial instability and fiscal unsustainability. White suggested that fiscal restraint, directed primarily to reduce consumption, could aid in the battle against inflation and would also help ensure longer run fiscal sustainability.

https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5tZWdhcGhvbmUuZm0vbW5pZmVkc3BlYWs/episode/ZGE4NGQzY2UtYjlkNy0xMWVkLWI2NDAtMGYzZGMzZWZkMDY5?sa=X&ved=0CAUQkfYCahcKEwjA6Nu8jsD9AhUAAAAAHQAAAAAQAQ

Posted by williamw in Interviews, Press