Dire Prediction from ex-Chief Economist from IMF
August 19, 2008
Professor Kenneth Rogoff who was the chief economist for the International Monetary Fund for 5 years has issued some stark warnings about the banking and credit crisis in the United States which have reverberated around Europe and Asis. Among Rogoff's predictions:
* A major bank in the United State will fail
* The financial crisis in the United States is at the halfway point
* Fannie Mae and Freddie Mac are not likely to survive in their current form within the next few years
* Inflation will continue to increase in the United States
* Consolidation among big banks and financial services companies will occur
International reaction to the dramatic predictions are mostly geared towards the threat of the nationalisation on Freddie Mac and Fannie Mae which could lead to losses for holders of the GSE's under a recapitalization. While Professor Rogoff's statements may be dismissed as inaccurate or over-the-top by many Americans, the reaction by foreign central bankers is important to monitor.
