Buiter is chief economist for Citigroup and a former UK Central Banker, who is keen on picking fights with Bernanke and the U.S. Federal Reserve, including a brilliant attack at Jackson Hole in 2008 which is detailed inside.
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Citigroup's Willem Buiter: an economist worth listening to
The Dutch-born scholar, a professor of political economy at the London School of Economics and former Bank of England Monetary Policy member, has never been afraid to speak his mind – even about past and present employers.
- In 2008, Dr Buiter turned his fire on his hosts when the Fed invited him to its annual retreat in the Teton Mountains. “The Fed listens to Wall Street and believes what it hears,” he told an audience of central bank officials from the Fed and around the world. “This distortion into a partial and often highly distorted perception of reality is unhealthy and dangerous.”
- Fed Governor Frederic Mishkin said at the same event that Buiter’s paper fired “a lot of unguided missiles,” and former Vice Chairman Alan Blinder “respectfully disagreed” with his analysis of the central bank’s crisis management.
He has degrees from the University of Amsterdam and Cambridge University and a doctorate from Yale University. He has taught at Princeton University, the University of Bristol, the London School of Economics, Yale University and Cambridge University. He was chief economist for the European Bank for Reconstruction and Development from 2000 to 2005.
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DB here. Now onto the story from today's Telegraph.
There are no safe sovereigns
Fears about the finances of eurozone nations will spread around the world to engulf the US and Japan, former Bank of England policy maker Willem Buiter has warned.
Worries about the risk of a sovereign state defaulting on its debt, which thrust the eurozone into crisis, will soon encompass the two major economies as well, according to Citigroup economists led by Mr Buiter, who sat on the Bank's Monetary Policy Committee.
The team has published a note forecasting much more strife to come in the wake of Greece and Ireland's recent bail-outs and eurozone governments' borrowing costs hitting record highs.
- "Despite the recent drama, we believe we have only seen the opening and second act, with the rest of the plot still evolving," the team wrote. "There is no absolutely safe sovereigns."
- There are likely to be several sovereign debt restructurings in the next few years, the analysts said, with Portugal likely to need to access the emergency funding facilities soon.
Against this backdrop, the US and Japan - dubbed the "fiscal sustainability deniers" - cannot keep ignoring the question of how safe their public finances are, the team said.
The fears about default will encompass the two economies "before long", they argued - particularly if a default is defined not just as a failure to meet the debt contract, but also as inflicting severe losses on debt holders through deliberately-engineered inflation or weakening the currency.
- "Both Japan and US public finances are unsustainable, in our view, and in the absence of credible and substantial fiscal tightening both would eventually face painful discipline through the markets," the economists wrote.
- It is only a matter of time before the US will have to raise funds by issuing debt offering "significantly higher" returns to bondholders, to reflect the level of risk surrounding it, they added.
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Buiter at CFR...
Video - Citigroup's Chief Economist Willem Buiter discusses the future of sovereign debt in the wake of the crisis in Greece - May 2010
- "There is no place for any nation to hide."
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Buiter on the future of banking...
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Willem Buiter on Bernanke's QE2 gamble...
More detail on this clip is here, including transcribed quotes...
And this is also an excellent clip from...
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