Niall Ferguson is in the media a lot, but this interview with Consuelo Mack (via Paul Kedrosky) is one of the best summations of he’s views we’ve come across.
Some of the points he gets across:
- Governments and households are in denial about how the world has changed post-crisis.
- Wall Street is in a worse state than prior to the crisis because now the government backstop is explicit, and because the remaining players now have a bigger oligopoly than before.
- The yuan-dollar link is badly hurting other countries, like Japan and Germany, because the Yuan really should be strengthening. Instead it’s weakening.
- The Fed will have to catch its lenders by surprise — a shock devaluation of sorts — if it wants to inflate its way out of debt.
- It won’t be that long before the US has a true equal — China — in the global economy.
- As the US gets poorer, chaos around the world will increase, as we can’t afford to create stability. Aready we’re seeing it in Iraq, Afghanistan, Somalia, and elsewhere.