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IMF chief says ‘rapid inflation’ after recovery a risk

Discussion in 'Political Zone' started by WoodysGirl, Jun 8, 2009.

  1. WoodysGirl

    WoodysGirl Shut up and play! Staff Member

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    Bloomberg News

    June 8, 2009, 10:24AM

    International Monetary Fund Managing Director Dominique Strauss-Kahn said “rapid inflation” poses a risk to the economies around the world after the global recession ends.

    “The risk of rapid inflation at the end of the recession is a real risk,” Strauss-Kahn said today at a conference in Montreal. “It’s not too early to think about what the world looks like at the end of the crisis.”

    The head of the Washington-based IMF, which has rescued economies from Pakistan to Iceland in the past year, repeated his forecast for a global recovery in the first half of 2010, with the “turning point” likely this September or October. The IMF in April said the world economy will shrink 1.3 percent this year, followed by a 1.9 percent expansion in 2010.

    Still, Strauss-Kahn reiterated that a recovery depends on “a cleansing of the balance sheets of the financial sector,” saying failure to speed up efforts toward that end remains the “biggest downside risk” for the global economy.

    Another IMF report in April projected worldwide losses tied to distressed loans and securitized assets may reach $4.1 trillion by the end of next year.

    Governments may “have done enough already” for their economies in providing fiscal stimulus, Strauss-Kahn also said today, and the next challenge will be dealing with “the huge increase in fiscal deficits and public debts.”

    The remarks are similar to those of World Bank President Robert Zoellick, who said last month that the global economy “appears to have a sufficient amount of stimulus.”

    www.bloomberg.com

    http://www.chron.com/disp/story.mpl/headline/biz/6464829.html
  2. Doomsday101

    Doomsday101 Well-Known Member

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    I think it is very likely that we will see hyperinflation. I think we would have come through the ressesion had we allowed it to run it's course instead of running up massive debt in an attempt to lessen the resession. In the end we will see a recovery with weak growth
  3. burmafrd

    burmafrd Well-Known Member

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    Well duh you print and borrow money like this and of course inflation is a big risk.
  4. sbark

    sbark Well-Known Member Zone Supporter

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    .........big risk: how bout' a big certainty..........

    but inflation is the only way to possibly repay this kind of debts..........taxation to those levels will never work: the producers leave, go "gault" or just join the non-producers....

    POLITICO Breaking News:
    -----------------------------------------------------

    President Barack Obama will announce today that he will ramp up stimulus spending exponentially in the next three months, allowing the administration to “save or create” 600,00 jobs -- four times as many as during the first 100 days since he signed the bill.

    For more information...http://www.politico.com
  5. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    Considering that only 5% of the money borrowed has actually gone into the economy at this point, I'd have to agree with you but then again, I seem to recall you as one of the members on this board that also wanted no part of this bailout mess.
  6. Doomsday101

    Doomsday101 Well-Known Member

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    I think Washington is better at creating problems not solving them. Private sector needs to survive or fail on their own. Government should have certain restriction on business such as OSHA standards to ensure worker safety and I have no problem with Government oversight to ensure business practice meet a certain fairness in hiring practice as well as ensuring they are operating in a fair and honest business practice in other words holding them accountable for finance disclosure.

    Other than that a business should be able in a free market to survive or collapse on its own. I do not believe that any business is too big to fail, one company’s failure just opens the door for others to step in and provide the service of a mismanaged company. I also have no issue with successful business playing within the rules to make as much money as they can.
  7. Kangaroo

    Kangaroo Active Member

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    Yea right the dam thing is a joke
  8. ChldsPlay

    ChldsPlay Well-Known Member

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    I agree except with the bolded part. To me a company should be able to hire whoever they want, for whatever reason they want. It's their money.

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