Dr Andy Xie, renowned economist, shared in his recent SCMP article that the Federal Reserve helped create and burst the FTX crypto bubble.
The Federal Reserve’s liquidity tsunami, especially its response to the Covid-19 crisis, supercharged financial bubbles and Ponzi scams. The collapse of the cryptocurrency exchange FTX is just one of many inevitable failures, as the US central bank unwinds quantitative easing.
The whole world of cryptocurrency is pretty much a scam that was sold to the public as a way to replace fiat money. Cryptocurrency assets became popular with the public when they rose and rose in value, fuelling a retail mania like yet another Chinese A-share bubble.
As crypto assets mushroomed in value and created billionaires, Wall Street scrambled for a piece of the action. This was when the Fed’s liquidity really took over.
With the collapse of FTX, famous investors are likely to end up losing big. Lack of regulation has been blamed. The new boss of FTX, a restructuring expert who oversaw the bankruptcy of the energy giant Enron, said he had never seen anything worse than FTX.
Dr Andy Xie 謝國忠, is an independent economist, director of Rosetta Stone Advisors and is one of the few economists who has accurately predicted economic bubbles including the 1997 Asian Financial Crisis and the more recent subprime meltdown in the United States.
He was a part of Morgan Stanley in 1997 and the Managing Director and Head of the firm’s Asia/Pacific economics team until 2006. He also spent two years with Macquarie Bank in Singapore, an associate director in corporate finance and five years as an economist with the World Bank.
Dr. Xie earned a PhD in economics in 1990 and an MS in civil engineering in 1987 from the Massachusetts Institute of Technology.
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