As we witness the latest sell off of securities, concern ourselves with frothy valuations, and fret over FED ‘tapering’ –another nugget from Bernanke’s lexicon mine– we need to consider that rumours of global rebalancing and sustainable recovery are greatly exaggerated. Read the latest post by Yanis Varoufakis
Before the Crash of 2008, the dominant view amongst the world’s policy-making elites was that global imbalances were not a problem. The great and the good in Washington and in London, in Paris and in Frankfurt, at Davos and on the golf courses where deals of note are struck, dismissed as economically-illiterate moaning-minnies all those who dared warn against large current account imbalances. Caught up in the soothing fiction of the ‘Great Moderation’, and the toxic fantasy that finance had invented ‘riskless risk’, the powers-that-be were adamant that we were living in a ‘new paradigm’.
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