Central bank prophet fears QE warfare

[GURPS]

Central bank prophet fears QE warfare pushing world financial system out of control
Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties



The economic prophet who foresaw the Lehman crisis with uncanny accuracy is even more worried about the world's financial system going into 2015.

Beggar-thy-neighbour devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well, corrupted by the leakage from quantitative easing (QE) in the West.

"We are in a world that is dangerously unanchored," said William White, the Swiss-based chairman of the OECD's Review Committee. "We're seeing true currency wars and everybody is doing it, and I have no idea where this is going to end."

Mr White is a former chief economist to the Bank for International Settlements - the bank of central banks - and currently an advisor to German Chancellor Angela Merkel.

 

[Larry Gude]

The solution to this was, and still is, WRITE OFF mortgages, credit card debt and student loans. Raise interest rates to 7% so that folks who lose worthless asset on their balance sheets can make real earnings on interest on dollars loaned to whomever wants it.

Everyone still seems to think it is 1929. The ONLY thing that matters is a healthy middle class and small business. The rich can always make money off of them and a healthy middle is where the money to support the poor comes from.

It was simple. It is simple but, it won't change until the middle class is seen as the troubled asset. Not the poor. Not the rich. The rest of us. Before we all become poor.