European Central Bank Chief Trichet: "Financial System is Going Mad"


Eurotower in Frankfurt, Germany:
PARIS, August 16, 2007--European Central Bank President Jean-Claude Trichet has been privately repeating, ceaselessly, "for months," that "the international financial system is going mad!" reports Le Canard Enchaîné. "To justify that diagnosis, he underlined the gap between three figures which make it easier to understand the current madness. Indeed, the world GDP grows 5% on average. Yet, at the same time, the financial markets require that investments return 15% in profits, and the mass of credits issued by banks and other establishments -- i.e., M3 for the distinguished economists -- is increasing by more than 15% -- a situation with such a strong imbalance that it could only lead to a financial crash."