The man who predicted the financial crisis

We should have listened to Brazil.

Ferndando Henrique Cardoso, the country’s president from 1995 to 2002, warned as early as 1995 and numerous times thereafter that the IMF and the World bank were no longer equipped to deal with the number and speed of international financial transactions.

He realized the problem of what he called “virtualization” of money:

[…] that the capitalist system contains an element of chance, of gambling of pure speculation. And the most serious thing is that the virtual has taken command of the real.

President Cardoso repeatedly alerted G7 leaders to the risk that central banks would lose control over the financial system. The warnings were ignored.


Professor Cardoso is not an economist, by the way, but a sociologist.

(I learned this from the book Brazil: The Troubled Rise of a Global Power by Michael Reid, which was the best book I read about Brazil.)

About Andreas Moser

Travelling the world and writing about it. I have degrees in law and philosophy, but I'd much rather be a writer, a spy or a hobo.
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