25 Jun. 2007

Uh-oh! The Banker's Bank Says We Are Headed For Another Great Depression

Not good:
In its annual report the Bank for International Settlements noted that the conditions which led up to the Great Depression of the 1930s and the Asian crises in the 1990s were reflected in the current environment.

"Each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived," the bank said.

The BIS, the central bankers' bank, pointed to a confluence of worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.
The BIS has robust criticism for China, but only "thinly veiled" criticism of equally irresponsible profiteering from the US Federal Reserve. Oddly enough, there is nothing at all about the Howard-Costello economic "miracles" of the past decade. Funny, that.