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?

The Telegraph
World faces wave of epic debt defaults, fears central bank veteran
Ambrose Evans-Pritchard

Ambrose Evans-Pritchard — Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties

Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties…

Mr White said QE is a disguised form of competitive devaluation. "The Japanese are now doing it as well but nobody can complain because the US started it," he said.

"There is a significant risk that this is going to end badly because the Bank of Japan is funding 40pc of all government spending. This could end in high inflation, perhaps even hyperinflation.…

The painful irony is that central banks may have brought about exactly what they most feared by trying to keep growth buoyant at all costs, he argues, and not allowing productivity gains to drive down prices gently as occurred in episodes of the 19th century. "They have created so much debt that they may have turned a good deflation into a bad deflation after all."

The Telegraph
Central bank prophet fears QE warfare pushing world financial system out of control
Ambrose Evans-Pritchard, in Davos

OECD’s William White fears global economic system is still highly unstable — Christopher Jeffery interviews William White

How central bankers think.

Central Banking
OECD’s William White fears global economic system is still highly unstable
Christopher Jeffery interviews William White

Here is a video interview that is making the rounds now, too.

William White: Central Banking...Not a Science