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GENEVA, March 23 (Reuters) - The world is in a dire economic crisis, but no recovery is possible until the financial sector is cleaned up, the head of the International Monetary Fund said on Monday.
The crisis will push millions into poverty and unemployment, risking social unrest and even war, and urgent action is required, IMF Managing Director Dominique Strauss-Kahn said. Rueters News
Global European Anticipation Bulletin
According to LEAP/E2020, there are only two options left for the G20 leaders who gather next April 2nd in London: either they rebuild a new international monetary system, creating the conditions for a new global system that involves all the main global players, and reducing the crisis to a maximum of 3 to 5 years; or they strive to prolong the current system, thrusting the world into a decade long tragic crisis starting at the end of 2009
Originally posted by redhead57
Now this is news!
"You can put in as much stimulus as you want. It will just melt in the sun as snow if at the same time you are not able to have a generally smaller financial sector than before but a healthy financial sector at work," he said.
...it is not everyday we hear the ***war*** warning. That makes my stomach knot up...
The U.S. economy is in for a "lasting slowdown" and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros said on Monday.
Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into "zombies" that draw the lifeblood of the economy, prolonging the economic slowdown.
"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.
The recovery will look like "an inverted square root sign," Soros said. "You hit bottom and you automatically rebound some, but then you don't come out of it in a V-shape recovery or anything like that. You settle down—step down."
The healing of the banking system and housing markets is crucial to recovery. "The banking system, as a whole, is basically insolvent," Soros said.
Soros also said the U.S. dollar is under selling pressure and may eventually be replaced as a world reserve currency, possibly by the IMF's Special Drawing Rights, a synthetic currency basket comprised of dollars, euros, yen and sterling.
"I think the dollar is now under question and I think the system will need to be reformed, so that the United States will be subject to the same discipline as is imposed on other countries," said Soros, whose famous bet against the British pound earned his Quantum Fund $1 billion in 1992. "Being the main issuer of international currency, we have been exempt and we have abused that because we have effectively consumed 6.5 percent more than we have produced. That is now coming to an end."
Ladies and Gentlemen,
Your next summit takes place in a few days in London; but are you aware that you have less than a semester to prevent the world from plunging into a crisis that will take at least a decade to resolve, accompanied by a whole series of tragedies and ferment? Therefore, this open letter by LEAP/E2020, who saw the arrival of a « global systemic crisis » as early as three years ago, intends to briefly explain why it happened and how to limit further damage.
If indeed you began to suspect the onset of a sizeable crisis less than a year ago, LEAP/E2020, in the second issue of their « Global Europe Anticipation Bulletin » (GEAB N°2), anticipated that the world was about to enter into the « trigger phase » of a crisis of historic proportions.
Hey buddy, can you spare a wheel of Parmigiano-Reggiano?
Italy is in the throes of its fourth recession since 2002, with the country’s economy expected to contract 5.3% this year. And, for many producers, cheese seems to be the only way out.
Credito Emiliano, an Italian bank in the Emilia-Romagna region, has been accepting parmesan cheese as collateral since the early 1950s -- and is now considering treating prosciutto, olive oil and balsamic vinegar the same way, according to Steve Jenkins, one of America’s foremost cheese experts.
'Out of control'
Republicans said the latest deficit figures were a serious concern.
"The alarm bells on our nation's fiscal condition have now become a siren," said Senate Republican minority leader Mitch McConnell.
"If anyone has any doubts that this burden on future generations is unsustainable, they're gone - spending, borrowing and debt are out of control."
Analysts said the latest deficit figures increased the likelihood of US tax rises once it is confirmed that the country has exited recession.
The CBO said such a move would be required.
"Putting the nation on a sustainable fiscal course will require some combination of lower spending and higher revenues than the amounts now projected," it said.