Eveillard:  “What has me concerned is the apparent complacency of so many investors, who seem to believe that the central bankers of the world have got it all figured out.  My own impression is that they are flying blind -- that they’ve taken unprecedented steps over the past 5 years, and so far those steps have not resulted in very strong economies, certainly not in the U.S. and even less so in Europe, and the same in Japan....

Continue reading the Jean-Marie Eveillard interview below...


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“With problems developing in China because of the enormous debt, we will look back and say, ‘Gee, it was extraordinary.  After 2008, the Chinese economy went great guns while other economies were faltering.  And now we see that it was (just) on the back of a tremendous credit boom.’

And as always in a credit boom, it results in investments that should not have been made.  It’s possible that the Chinese economy will have to pay a fairly stiff price for that.  Meanwhile, most investors seem to be very happy.  I’m not sure that investors truly believe that central bankers have figured it out.  It may simply be a matter of investors loving cheap and easy money.

And in a sense it continues to be equities by default.  Who wants to have money parked in cash which yields nothing?  Or in bonds that yield just a bit more?  So what’s left but equities?  And of course for some people, real estate or works of art, but in terms of financial assets, what is left it equities.”

Eric King:  “You brought up China.  There has been a lot of talk about the shadow banking system, the leverage and the danger there.  How big is the danger?”

Eveillard:  “The thing about China is that the people who are in power, because they are not legitimate because of free elections, they are legitimate only to the extent that they continue to provide jobs to the masses of Chinese people who are leaving the rural areas and are moving into cities.

If they stop providing jobs, the so-called elites are in big trouble.  So there is a fine line between them acknowledging, which I think they do to some extent, that there is just too much debt around in their country, and then wanting to continue to see the economy grow.  So there is a temptation to stimulate, but if it’s a matter of continuing the credit boom and continuing the excesses of the credit boom, then that’s not good at some point down the road.”

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IMPORTANT - KWN has many more interviews being released today.

The audio interviews with Egon von Greyerz, Dr. Paul Craig Roberts, Ben Davies, Gerald Celente, David Stockman, Bill Fleckenstein, MEP Nigel Farage, John Mauldin, Eric Sprott, Andrew Maguire, Art Cashin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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