The Russian weekly Zavtra of October 10 published a Q&A with Japanese economist Daisuke Kotegawa in its front-page “Off the Cuff” column. The question was, “What is your evaluation of the current global financial situation?” Kotegawa’s reply, as published in Zavtra: “My experience and research indicate that a financial catastrophe, accompanied by a global collapse, could happen in the immediate weeks ahead, unless the leaders of the major economic powers adopt certain specific, tough measures. The crisis is linked with the situation in the United States, where political disputes have led to a freeze-up of the budget process and a rejection of attempts to raise the debt ceiling. Because of this, my view of the overall situation is extremely skeptical.”
Zavtra identified Kotegawa as former Executive Director for Japan at the IMF (2007-2009) and current Research Director at the Canon Institute for Global Studies. The newspaper has a print circulation of 100,000 copies and is read throughout the Russian political establishment.
In recent public presentations during a visit to Europe and the United States, Kotegawa elaborated on his assessment that the economic collapse could come at any moment. In addition to the government shutdown/debt ceiling fiasco in the United States, he warned that Greece is facing a third bailout and the Spanish banks are in big trouble, holding vastly over-valued real estate portfolios and lacking sufficient reserves to deal with a further crash of the housing and commercial property bubble. He warned that the ECB is facing a major crisis, and that he believes that the reckoning could come as soon as a new German cabinet is formed. Because of the new crises on both sides of the Atlantic, the financial markets are panicked. He also pointed to serious short-term debt problems in South Korea that add to the overall global instability. He warned that the investment banks must be dumped if there is any hope of avoiding a new systemic crash.