“That’s the whole dilemma!” said William White, one of the few central-bank economists who’d predicted the Financial Crisis with increasingly dire warnings when he headed the Monetary and Economic Department of the Bank for International Settlements (BIS). On its board, among other luminaries, sat the governors of the largest central banks in the world. Back then, his words were brushed off with that forced patience of the exasperated.
“For 25 years, it has never been the right moment,” he told the Spiegel Online. “It’s always: Yes, in the long term we need to stop with the policy of cheap money and just piling on debt. But please not right now; now the economy must first get back on its feet. That was the response to the 1987 stock-market crash, the 1997 Asian crisis, the internet bubble implosion in 2001, and the world financial crisis of 2008.”
He’d spent over two decades at the Bank of Canada before joining the BIS in Basel, Switzerland, in 1994. While at the BIS, he criticized Fed Chairman Alan Greenspan for his easy-money theories and the speculative asset bubbles and busts they engendered. At the Kansas City Fed’s annual meeting in Jackson Hole, Wyoming, in August 2003, he confronted the maestro, as the googly-eyed mainstream media still called Greenspan at the time, and challenged him: jack up interest rates when credit expands too fast and force banks to increase their capital cushions during fat years to use in lean years.
And from Jim Rogers...
"We’re getting to that point where either one of two things are going to happen; either central banks are going to stop all this [money printing], or the market is going to force them to stop it. It looks like we may be having a juncture of both... where the Fed is getting worried... and at the same time, the market is jumping in and saying, ‘Yes, it’s insane what you’re doing, and this has to end.’ And if it’s not ending now, it’s going to end sometime in the next year, because this cannot go on - it’s too insane."