It is incredibly funny when you realize that most market projections are determined by banks and economists who have a monetary interest in the outcome of their own analysis. From the forecasting of quarterly earnings for individual stocks, to telling the Federal Reserve how they should perform monetary policy, the casino known as Wall Street is simply a segregated environment where 1%ers vie with other 1%ers to manipulate outcomes based on their own for or against betting patterns.
Thus it should come as no surprise that the once again fail Chief Economist from Citigroup is ratcheting up his rhetoric, and where at a meeting for the Council on Foreign Relations he suggested it is time for central banks around the world to rev up the helicopter and start a new round of Quantitative Easing to stave off the coming economic crash.
Speaking on a panel at the Council of Foreign Relations in New York, Mr Buiter said the dollar will “go through the roof” if the US Federal Reserve lifts interest rates this year, compounding the crisis for emerging markets.
“So why it matters is that the competence of the Chinese authorities as managers of the macro economy is really in question – the messing around with monetary policy, the hinting on doing things on the fiscal side through the policy banks. But I think the only thing that is likely to stop China from going into, I think, recession – which is, you know, 4 percent growth on the official data, the mendacious official data, for a year or so – is a large consumption-oriented fiscal stimulus, funded through the central government and preferably monetized by the People’s Bank of China.
Well, they’re not ready for that yet. Despite, I think, the economy crying out for it, the Chinese leadership is not ready for this.
So I think they will respond, but they will respond too late to avoid a recession, and which is likely to drag the global economy with it down to a global growth rate below 2 percent, which is my definition of a global recession. Not every country needs go into recession. The U.S. might well avoid it. But everybody will be adversely affected.” – UK Telegraph via Zerohedge
Buiter is not the only economist in recent days to call for massive increases to global debt to stave off what is now a global recession. New York Times columnist and Nobel Prize winning economist Paul Krugman has outright ignored the failed policies of the central banks since 2008, and advocates that the world’s monetary troubles are due to not enough debt being created.
Is it any wonder why the global economy and financial system stands on the precipice of collapse when the majority of major markets listen to, and rely upon, economists who believe that getting rid of cash, and increasing debt is the answer to all of these monetary problems? Perhaps in their minds the nations of Venezuela, Greece, Argentina, Spain, etal… do not exist, and that the rising inflation occurring for the people of Japan is simply a myth, put out to their people by conspiracy theorists who only seek to tear down the status quo… the same status quo that has now brought the world to the brink of collapse.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.