Sunday, June 12, 2016

Former Dallas Federal Reserve President
Richard Fisher*: "Our Government 
Has To Borrow Money Just To Pay Interest"
Fisher was president of the Federal Reserve Bank of Dallas & a voting member of the Federal Open Market Committee (FOMC) from 2005 to 2015. He was one of, perhaps the only, skeptic on the Fed board going into the great financial crisis .. his big concerns:
1. Government Debt: he is worried about the $19 trillion U.S. government debt (up $11 trillion since 2008) because the Fed has fired all its monetary bullets and can’t expand the balance sheet any further.
2. China & social instability: he thinks communist leaders care about production but not efficiency. "They might produce more, but our products work," jokes Fisher. There are entire cities in China with nobody living in them, according to him. Fisher says the biggest problem in China is social stability. "I'm deeply worried about their ability to maintain social stability,” but... “It doesn’t affect us directly.” Another risk in China is that millions of people are pulling their money out of the country.
3. Low interest rates don't work: "We had a long period of moderation and low interest rates, which did nothing to adjust." 
4. It's all one big Ponzi scheme: “Our government has to borrow money just to pay interest.”
Or as Minsky would say, this is the Ponzi finance stage, just before everything goes to hell. "We have a lot of unsound policy in place.”
LINK HERE to the article

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