World Economic Forum Endorses Fraud; Steve Keen Mocks the WEF Report, So Do I; The Purported "Need to Double Credit in 10 Years" (MISH)

World Economic Forum Endorses Fraud; Steve Keen Mocks the WEF Report, So Do I; The Purported "Need to Double Credit in 10 Years" (MISH)

A few days ago I received an email from the World Economic Forum regarding a need to double credit over the next 10 years. Here is that email.

New York, USA, 18 January 2011 – Credit levels will need to double over the next 10 years, growing by US$ 103 trillion, to support consensus-projected economic growth. This doubling of credit could be achieved without increasing the risk of major crisis, finds More Credit with Fewer Crises: Responsibly Meeting the World’s Growing Demand for Credit, a report released by the World Economic Forum in collaboration with McKinsey & Company. The study develops a detailed global credit model using historical credit volumes and forecasting potential credit demand to 2020 across 79 countries, representing 99% of world credit volume. The study applies a sustainability methodology to the projected credit demand, using newly developed metrics to answer the following two questions: Will credit growth be sufficient to meet demand? Is there a risk of future credit crises and, if so, where?

The accompanying PDF entitled More Credit with Fewer Crises is 84 pages of economic claptrap. The main mission of the World Economic Forum appears to cram more credit down the throats of a world so stuffed with credit it cannot possibly be paid back.

Australian economist Steve Keen found three major flaws in the report. There are many others. Inquiring minds will certainly want to read Keen's WEF-mocking analysis entitled How I learnt to stop worrying and love The Bank.

The three flaws Keen spotted are:

• Poor starting year for the report
• Report ignores financial sector debt
• Report ignores Ponzi schemes

There are numerous other flaws that I will touch on below.

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