Home » Posts tagged 'ken rogoff'

Tag Archives: ken rogoff

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

As West, Debt & Stocks Implode, East Gold & Oil Will Explode

January 29, 2023

AS WEST, DEBT & STOCKS IMPLODE, EAST GOLD & OIL WILL EXPLODE 

“The risk of over-tightening by the European Central Bank is nothing less than catastrophic” says Prof Kenneth Rogoff .

At Davos he also said: “Italy is extremely vulnerable. But this could pop anywhere. Global debt has gone up massively since the pandemic: public debt, corporate debt, everything.”

Rogoff believes that it is a miracle that the world averted a financial crisis in 2022, but the odds of a major accident are shortening as the delayed effects of past tightening feed through.

As Rogoff said: “We were very fortunate that we didn’t have a global systemic event in 2022, and we can count our blessings for that, but rates are still going higher and the risk keeps rising.”

But lurking in the murkiness is also the global financial assets/liabilities which is almost $500 trillion including the shadow banking system at 46% of the total. The shadow banking sector includes  pension funds, hedge funds and other financial institutions which are largely unregulated.

oil

Shadow banking is not subject to the normal mark-to-market rules. Thus no one knows what the real position or losses are. This means that central banks are in the dark when it comes to evaluation of the real risks of the system.

Clearly, I am not the only one harping on about the catastrophic global debt/liability situation.

And no one knows the extent of total global derivatives. But if they have grown in line with debt and also with the shadow banking system, they could easily be in excess of $3 quadrillion.

oil

Cultures don’t die overnight, but the US has been in decline since at least the Vietnam war in the 1960s. Interestingly, the US has not had a real Budget surplus since the early 1930s with a handful of years of exception.

…click on the above link to read the rest…

Ken Rogoff Warns “China Will Be At The Center Of The Next Global Financial Crisis”

January 25, 2018

Ken Rogoff Warns “China Will Be At The Center Of The Next Global Financial Crisis”

Having warned in Davos today that:

“If interest rates go up even modestly, halfway to their normal level, you will see a collapse in the stock market,”

“I don’t know how everything from art and bitcoin to stock prices will react as interest rates go up.”

Kenneth Rogoff, Professor of Public Policy at Harvard University, explains to Finanz Und Wirtschaft’s Christoph Gisiger why the long economic slump is finally over and what the biggest risks for the future are.

Few people know as much about financial crises as Kenneth Rogoff. Together with his colleague Carmen Reinhart, the highly influential professor at Harvard University is the author of «This Time Is Different: Eight Centuries of Financial Folly», one of the most important studies on the financial crisis of 2008 and its impact on the economy and society. So what’s the big lesson nearly ten years after the traumatic fall of the investment bank Lehman Brothers? In which way was this crisis different than other big shocks in the history of finance? Und most importantly: What’s next for the global economy?

Professor Rogoff, since the outbreak of the financial crisis nearly ten years have passed. How do grade this recovery when you look at other big busts in the history of finance?
In my research with Carmen Reinhart we found that after a deep systemic financial crisis, it often takes the economy eight to ten years to recover. Now, it’s been a decade and I think we are in a recovery period where we are going to get some reversion to mean in terms of productivity growth and other things. That means we are going to get above average productivity growth and rising investments for several years as the economy normalizes.

…click on the above link to read the rest of the article…

Pension Storm Warning

September 17, 2017

Pension Storm Warning

This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time is usually not fundamentally different, because fallible humans are still in charge. (Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)

Nevertheless, I uttered those four words in last week’s letter. I stand by them, too. In the next 20 years, we’re going to see changes that humanity has never seen before, and in some cases never even imagined, and we’re going to have to change. I truly believe this. We have unleashed economic and technological forces we can observe but not entirely control.

I will defend this bold claim at greater length in my forthcoming book, The Age of Transformation.

Today we will zero in on one of those forces, which last week I called “the bubble in government promises,” which I think is arguably the biggest bubble in human history. Elected officials at all levels have promised workers they will receive pension benefits without taking the hard steps necessary to deliver on those promises. This situation will end badly and hurt many people. Unfortunately, massive snafus like this rarely hurt the politicians who made those overly optimistic promises, often years ago.

Earlier this year I called the pension mess “The Crisis We Can’t Muddle Through.” Reflecting since then, I think I was too optimistic. Simply waiting for the floodwaters to drop down to muddle-through depth won’t be enough. We face an entire new ocean, deeper and wider than we can ever cross unaided.

…click on the above link to read the rest of the article…

Extreme Weather and Global Growth

January 11, 2016

Extreme Weather and Global Growth

CAMBRIDGE – Until recently, the usual thinking among macroeconomists has been that short-term weather fluctuations don’t matter much for economic activity. Construction hiring may be stronger than usual in a March when the weather is unseasonably mild, but there will be payback in April and May. If heavy rains discourage people from shopping in August, they will just spend more in September.

But recent economic research, bolstered by an exceptionally strong El Niño – a complex global climactic event marked by exceptionally warm Pacific Ocean water off the coast of Ecuador and Peru – has prompted a rethink of this view.

Extreme weather certainly throws a ringer into key short-term macroeconomic statistics. It can add or subtract 100,000 jobs to monthly US employment, the single most-watched economic statistic in the world, and generally thought to be one of the most accurate. The impact of El Niño-related weather events like the one this year (known more precisely as “El Niño Southern Oscillation” events) can be especially large because of their global reach.

Recent research from the International Monetary Fund suggests that countries such as Australia, India, Indonesia, Japan, and South Africa suffer adversely in El Niño years (often due to droughts), whereas some regions, including the United States, Canada, and Europe, can benefit. California, for example, which has been experiencing years of severe drought, is finally getting rain. Generally, but not always, El Niño events tend to be inflationary, in part because low crop yields lead to higher prices.

After two crazy winters in Boston, where I live, it would be hard to convince people that weather doesn’t matter. Last year, the city experienced the largest snow accumulation on record. Eventually, there was no longer any place to put it: four-lane highways narrowed to two lanes, and two-lane roads to one. Roofs collapsed and “ice dams” building up from gutters caused severe flooding.

…click on the above link to read the rest of the article…

Martin Armstrong Reports on a Secret Meeting in London to Ban Cash

May 27, 2015

Martin Armstrong Reports on a Secret Meeting in London to Ban Cash

Screen Shot 2015-05-26 at 10.54.52 AM

At this point, anyone paying even the slightest bit of attention to the central planning economic totalitarians running the fraudulent global financial system is aware of the blatant push in the media to acclimate the masses to accepting a “cashless society.”

In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line.

While we’ve all seen the idiotic arguments for banning cash, i.e., it will allow central planners to more efficiently centrally plan economies into the ground, Martin Armstrong is reporting on a secret meeting in London with the aim of getting rid of any economic privacy that remains by ending cash.

From Armstrong Economics:

I find it extremely perplexing that I have been the only one to report that there is a secret meeting in London where Kenneth Rogoff of Harvard University and Willem Butler the chief economist at Citigroup will address the central banks and advocate the elimination of all cash to bring to fruition the day when you cannot buy or sell anything without government approval. When I Googled the issue to see who has picked it up yet, to my surprise Armstrong Economics comes up first. Others are quoting me, and I even find it spreading as the Central Bank of Nigeria, but I have yet to find reports on the meeting taking place in London when my sources are direct.

Other newspapers who have covered my European tour have stated that the “crash” of which I speak is the typical stock market rather than in government. What is concerning me is the silence on this meeting where there are more and more reports about a cashless society would be better.

 

…click on the above link to read the rest of the article…

Why The Powers That Be Are Pushing A Cashless Society

May 4, 2015

Why The Powers That Be Are Pushing A Cashless Society

We Can’t Rein In the Banks If We Can’t Pull Our Money Out of Them

Martin Armstrong summarizes the headway being made to ban cash,  and argues that the goal of those pushing a cashless society is to prevent bank runs … and increase their control:

The central banks are … planning drastic restrictions on cash itself. They see moving to electronic money will first eliminate the underground economy, but secondly, they believe it will even prevent a banking crisis. This idea of eliminating cash was first floated as the normal trial balloon to see how the people take it. It was first launched by Kenneth Rogoff of Harvard University and Willem Buiter, the chief economist at Citigroup. Their claims have been widely hailed and their papers are now the foundation for the new age of Economic Totalitarianism that confronts us. Rogoff and Buiter have laid the ground work for the end of much of our freedom and will one day will be considered the new Marx with hindsight. They sit in their lofty offices but do not have real world practical experience beyond theory. Considerations of their arguments have shown how governments can seize all economic power are destroy cash in the process eliminating all rights. Physical paper money provides the check against negative interest rates for if they become too great, people will simply withdraw their funds and hoard cash. Furthermore, paper currency allows for bank runs. Eliminate paper currency and what you end up with is the elimination of the ability to demand to withdraw funds from a bank.

…click on the above link to read the rest of the article…

Largest Bank In America Joins War On Cash

April 24, 2015

Largest Bank In America Joins War On Cash

The war on cash is escalating. Just a week ago, the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash (something that was already been implemented in Louisiana in 2011 for used goods). Today, as Mises’ Jo Salerno reports, the war has acquired a powerful new ally in Chase, the largest bank in the U.S., which has enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes.

Buiter defended his “controversial” call for a ban on cash, as Bloomberg reports:

“The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.

In a new piece, Citi’s Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction? Cash therefore gives people an easy and effective way of avoiding negative nominal rates. Buiter’s note suggests three ways to address this problem:

  1. Abolish currency.
  2. Tax currency.
  3. Remove the fixed exchange rate between currency and central bank reserves/deposits.

…click on the above link to read the rest of the article…

 

 

 

Another Shill for Statism and Central Planning Demands a Cash Ban

April 17, 2015

Another Shill for Statism and Central Planning Demands a Cash Ban

Citigroup’s Chief Economist Joins the Cash Ban Bandwagon

We have discussed the views of Citigroup’s chief economist Willem Buiter previously in these pages (see “A Dose of Buiternomics” for details), on occasion of his coming out as a supporter of assorted monetary cranks, such as Silvio Gesell, to name one. Not to put too fine a point to it, Buiter is a monetary crank too.

Buiter is always shilling for more central bank intervention, and it seems no plan can ever be too silly or too extreme for him. In fact, he seems to have made the propagation of utterly crazy ideas his trademark.

Buiter has now joined one of his famous colleagues, Kenneth Rogoff, another intellectual enamored with central planning, in clamoring for a cash ban (for our discussion of Rogoff, see “Meet Kenneth Rogoff, Unreconstructed Statist”). Both Buiter and Rogoff want to make it impossible for citizens to escape the latest depredations of central bankers, such as the imposition of negative interest rates. This is to be done by forcing them to keep their money in accounts at fractionally reserved banks.

As Bloomberg reports:

“The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.

…click on the above link to read the rest of the article…

 

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress