Easier monetary policies to spur danger of inflation: OECD

William White, chairman-Economic and Development Review Committee, OECD, is one of the few economists in the BIS who could see the crises coming as early as 2007. White discloses how he sees the European problem panning out and how the quantitative easing by major central banks will impact global economy going forward.

White is of the opinion that while there is a situation of an explosion of global liquidity which increases spending and brings in more growth, on the other hand, all it produces is more inflation, higher commodity prices, asset price bubbles and misallocations of investments.
He further goes on to say that with central banks expanding their balance sheets in such a huge manner simultaneously, it will prompt people in other countries to intervene and exchange markets with its own dangers would prompt other countries to follow easier monetary policies than they would otherwise do, which has got dangers of both inflation and rising imbalances. Below is the edited transcript of the interview. Also watch the accompanying video. Q: Is it reasonably certain now that Europe will do it all to keep the Union in current shape?
A: I don