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"Act now" to save global recovery, IMF chief urges

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posted on Aug, 27 2011 @ 07:36 PM
"Act now" to save global recovery, IMF chief urges

The new head of the IMF on Saturday called on global policymakers to pursue urgent action, including forcing European banks to bulk up their capital, to prevent a descent into a renewed world recession.

"Developments this summer have indicated we are in a dangerous new phase," International Monetary Fund Managing Director Christine Lagarde said at a conference for top officials and leading economists from around the globe.

"The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now,"she said.

Two years after the end of the worst of the financial crisis, growth in the United States and Europe is sputtering as government debt burdens surge.

Borrowing costs for European banks are rising as lenders balk at providing any but the shortest maturity funds on fears over bank exposure to shaky euro zone sovereign debts. Sharp swings in global financial markets have intensified strains.

Complicating the picture is policymaker indecision on both sides of the Atlantic.

European leaders are fighting over who should pay the bill for taming a raging sovereign debt crisis.

In the United States, lawmakers and President Barack Obama fought a contentious budget battle earlier this summer that resulted in the loss of the nation's coveted "AAA" debt rating from Standard & Poor's.

Federal Reserve Chairman Ben Bernanke warned here on Friday that the fight had shaken confidence and sapped U.S. growth.

Just citing a short part of this article. Now let's get this straight. The global economy hit an iceberg back in 2008. We have managed to ward off the economy sinking into the sea through various accommodating fiscal and monetary policies, bailouts and easing. The global economy is now reported to be in recovery and many economists would have us believe better days are ahead, and we'll be turning over the engines and heading off again from the iceberg hit.

However what we see are a number of contentious debates about whether or not this global economy ship is going to sink and whether we should in fact brace for a world recession and take evasive action accordingly, as the IMF has urged in her conference speech, among others. But there are those who contend the ship is fine, the damages from the iceberg hit have been repaired satisfactorily to continue the journey.

So we have a bit of a dilemma in that on the one hand, some are forecasting a global economic recession while others contend strengthening growth and recovery. Policy makers around the world are therefore divided on a course of meaningful action. What are the potential outcomes of this?

Well I would suggest further deterioration of the global economy and forthcoming recession and depression. In fact, I am of the belief that it really isn't going to matter what policy makers do or don't do, the ship is going to sink while some for the meantime worry or panic, and others party, until everyone is on the same page and realises this unsinkable global economy ship is inevitably going under, of which time it will be too late.

Currently some people are seeing and heeding the warning indicators while others are not. Of course time will tell.

posted on Aug, 27 2011 @ 07:45 PM
I really like the part where European leaders fight over who will float this bill. You cannot honestly expect countries such as Portugal, Italy, Ireland, Greece, Spain to float an equal amount as stronger countries such as France, Germany can.

America is printing money faster than it knows what to do.When yo see the market up 300 points and gold up 50 dollars you know there is a problem. I still feel its money injection to keep the crackheads in a frenzy on the stock market, but I have no proof of that past QE1 and QE2.

Prepare for the worst, expect the worst, and all the "better greener pastures" thinking is hope at this point.

posted on Aug, 27 2011 @ 08:03 PM
US is the biggest funder of the IMF, people think that with only 17% of the quota that US keeps in the IMF is all that US tax payer pays, but that is not so, because US have privilege most of additional money use for the funding of countries in trouble stays in the federal Reserve as needed, so the tax payer have not clue how much the US funds at the end.

Most of the money for the first Greek bailout was came from the US so is only fair to say that that will be the same with the EU bail out just like it was after the 2008 market crash that originated in the US.

Why is this? because most countries that are part of the IMF their money is not even worth the paper is printed on and they have economic problems of the ir own, US is the biggest funder, follow by Japan, France, Germany and UK they are the top five.

See the mess and corruption that was part of the last global economic crisis had its roots in the US, we never actually recuperated from it, bailouts are only bandaids in "Hopes" that the markets will do better in the future, that never happen and now is all going to hell again, another "bandaid" will only buy more time until again things goes down to hell again, and again and again.

But I guess preserving the wealthy few is priority over the needs of the citizens of the countries involved.

edit on 27-8-2011 by marg6043 because: (no reason given)

edit on 27-8-2011 by marg6043 because: (no reason given)

posted on Aug, 27 2011 @ 08:23 PM

Originally posted by surrealist
"Act now" to save global recovery, IMF chief urges

Two years after the end of the worst of the financial crisis,

Two year after the end ? Say what! When did this happen? I must have been sleeping.

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