Tuesday, January 19, 2016

Ambrose Evans-Pritchard — World faces wave of epic debt defaults, fears central bank veteran William White

There is no easy way out of this tangle. But Mr White said it would be a good start for governments to stop depending on central banks to do their dirty work. They should return to fiscal primacy - call it Keynesian, if you wish - and launch an investment blitz on infrastructure that pays for itself through higher growth.

"It was always dangerous to rely on central banks to sort out a solvency problem when all they can do is tackle liquidity problems. It is a recipe for disorder, and now we are hitting the limit," he said.…
Second leg down?

What happens when China is forced to drop its peg, like Russia?

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