And the know nothing speaks out!

As the FT notes this morning:

Wolfgang Schäuble has warned that spiralling levels of global debt and liquidity present a major risk to the world economy, in his parting shot as Germany’s finance minister. In an interview with the FT … said there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets.

It took him a long time to form that conclusion. And if as a result there are bubbles now then the blame can be firmly laid at his door.

If that could be seen in 2010 – and I did see it – the question for Schäuble is why has it taken him quite so long to state what is seemingly obvious when all the conditions for another bust have been laid on his watch?

The lack of knowledge is really quite startling. Schauble and the Bundesbank have always been tyhe loudest voices in the eurozone against QE. Precisely because they didn’t think it would work, it would only create a bubble.

The Sage of Ely is at least nominally a professor in international political economy. Shouldn’t we expect at least a passing knowledge of the scene of international political economy?

15 thoughts on “And the know nothing speaks out!”

  1. Bloke in North Dorset

    I was thinking its getting to be a very big stump and wondering if they openings were wide enough for light to penetrate, let alone for a man to get an arm down.

  2. Schäuble and the Bundesbank have always been the loudest voices in the eurozone against QE

    Ah, but not in the alternative world created by the Elyphantacist.

  3. If that could be seen in 2010 – and I did see it – the question for Schäuble is why has it taken him quite so long to state what is seemingly obvious when all the conditions for another bust have been laid on his watch?

    Oh bugger…

    Hmmm, yes, and People’s QE – which, as everyone knows, I personally created (“out of thin air”, ha ha, what a genius I am) – is of course completely different.

  4. His other post, on IFRS, is even more ignorant. Note how he fails to mention a single accounting standard while criticising IFRS. That’s because he doesn’t actually know IFRS at all.

  5. I notice two poor buggers have to sit next to him on London-Washington flights this week.
    The bit I don’t understand about his World Bank invitation ( part-funded by DfID ) is who did the inviting – did he compete for an invite against others with submissions as places were limited, or did the WB invite him so they set some kind of outlier not to touch, or the WB invite him as they are idiots.

  6. Snippa takes selective quoting to new depths

    However, one thing has not happened, and that is that the funds made available have not resulted in new bank lending. In fact bank lending has declined almost steadily since the quantitative easing programme began.

    He does not tell us that his figures are from a report issued in October 2010 so, of course, they omit the rather rapid rise in lending that began in 2014 – per Bank of England

    Net lending to UK businesses by banks and building societies picked up in the first half of 2015. Net lending on the all currency loans measure was £3.1 billion in the three months to May, while the annual growth rate in the stock of loans in May was 0.9%, having been negative for much of the period since the financial crisis.

    It is almost as if he thinks that the world has remained in a state of stasis for 7 years.

  7. If that could be seen in 2010 – and I did see it

    Can we have proof of this please, and also proof that his prediction for 2010 wasn’t also preceded by similar predictions for 2009, 2008, 2007…1871.

  8. “Diogenes

    It is almost as if he thinks that the world has remained in a state of stasis for 7 years.”

    7?

    I think he thinks it’s still the 1950s

  9. @Rob

    His ‘predictions’ are usually of the form;

    “This might possibly happen but then again it may not, although if it doesn’t that may or may not be because it has not yet happened but perhaps will do”

  10. @Andrew C

    “…and when it does happen it is because I predicted it would happen. Aren’t I brilliant? I invented country-by-country reporting, you know. And Corbynomics”

  11. Bloke in North Dorset

    Talking of forecasting, a bit OT, Chris Snowdon’s got a post up pointing out its 10 years since Moonbat gave us the wonderful headline “Bring on the Recession.

    It’s 10 years since George Monbiot said ‘Bring on the recession’
    Ten years ago today, George Monbiot wrote an article for the Guardian titled ‘In this age of diamond saucepans, only a recession makes sense’. Columnists don’t write their own headlines, but when he reproduced it on his own website, Monbiot gave it an even less ambiguous title: ‘Bring on the recession’.

    Three weeks earlier, Lehman Brothers had filed for bankruptcy and there had been a run on the Northern Rock bank. These were the early rumblings of a financial crisis that would engulf most of the world in 2008. The British economy went into recession in the second quarter of 2008 and remained there until mid-2009.

  12. Interesting viewpoint from capital & conflict :

    Back to Germany and why it’s an exception. It’s operating on a different business cycle to Europe. That is the secret to the country’s success – timing. Which even Schäuble can’t take credit for.

    While southern Europe was going through its unprecedented economic boom of the 2000s, Germany was the “sick man of Europe”. The Economist particularly lamented its position.

    As a German schoolchild at the time, I remember a popular song which consisted entirely of newly introduced tax names to the tune of the Ketchup Song. The Gerhard Schröder impersonator explains in the chorus, “Voted in is voted in, you can’t fire me now. That’s the cool thing about democracyyyy”.

    While Germany wallowed and the European Central Bank (ECB) tried to revive the Mittelstand with low interest rates, the Portuguese, Irish, Italians, Greeks and Spanish partied hard on those same low interest rates. While the Germans reformed their workplace policies, the PIIGS built houses in the middle of nowhere.

    Then the worm turned. Germany’s reforms kicked in and the PIIGS got their reckoning. While they wallow and the ECB tries to revive them, the Germans go on an export boom of extraordinary proportions financed by negative real interest rates.

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