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.
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
An interview given by William White to Mark Dittli of “The Market” was posted on 23 February. Faced with secular forces likely to lead to a more inflationary future, central banks should raise nominal rates to allow real rates to adjust upwards. However, high levels of both private and public debt (encouraged by earlier monetary easing) imply that higher rates bring significant risks of financial instability as well as the unsustainability of public finances. White suggests measures to help avoid these risks, but they imply pain for consumers. Political authorities might rather choose policies of “financial repression”. After World War II inflation rose, but interest rates were held down and the real burden of debtors was reduced over a number of years at the expense of savers. In todays world, the political implications of such redistributive policies could be important.
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.
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”.
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/
Jack Farley of Blockworks posted an interview with William White on 18 November. The interview focused on issues raised in a more technical paper White recently had posted on the INET website (see Publications). Ultra easy monetary policy is increasingly ineffective in stimulating aggregate demand and its negative side effects are becoming increasingly apparent. The discussion also touched upon the distributional implications of the current stance of monetary policy, and the likelihood that “financial repression” might be a solution to the current overhang of debt that has been generated by monetary policy.
On the occasion of the 50th anniversary of the breakdown of the Bretton Woods system, William White gave an interview to Daniel Stelter, the host of “Beyond the Obvious”, one of Germany’s most popular financial podcasts. The discussion covered the reasons for the breakdown of the Bretton Woods system, the shortcomings of the Non-System that followed it, and proposals for a new system that would not be based on a nationally issued currency, like the US dollar. The discussion also covered currency issues within the euro zone, as well as “narrow money” solutions to both domestic and international problems.
https://think-beyondtheobvious.com/the-world-needs-a-restart-of-the-financial-order/
On 29 March, William White gave a wide ranging interview to Bastjan Usinech, a journalist at “Finance Manager”, the leading business magazine in Slovenia. The discussion focused on past macroeconomic policy mistakes leading to ever growing debt levels and an ever narrowing path leading to sustainable growth. Falling off that path could plausibly lead to either deflation or high inflation or even both in succession. White also expressed views on what central banks and fiscal authorities should be doing now, as we emerge from the covid pandemic. The pros and cons of more radical alternatives to conventional policies – like “narrow money” and a “debt jubilee” – were also considered.
On 25 February 2021, Marc Friedrich posted an interview with William White. Friedrich is a popular author and one of the most widely followed podcasters in Germany dealing with economic and financial issues. In a wide ranging discussion, White answered questions on the long standing roots of our current economic and financial difficulties and why policymakers chose not to accept earlier criticism that they had embarked upon a dangerous path. The discussion extended to cryptocurrencies and whether more radical monetary and regulatory reform (including reform of the International Monetary System) might be required to achieve sustainable increases in human well being over time?