The International Monetary Fund has just released its 2012 World Economic Outlook, sub-titled ‘Growth Resuming, Dangers Remain’. I have read it in full and present a brief synopsis of it below which will save you more than 1 hour of your time doing so. I have also commented on some of their statements to provide greater clarity and understanding of what the report conveys. Words: 674
So says Ian R. Campbell (www.StockResearchPortal.com) in edited excerpts from his synopsis and review (a component of a subscription service* but presented here with his kind permission for posting on www.munKNEE.com (Your Key to Making Money!) on the subject. This paragraph must be included in any article re-posting to avoid copyright infringement.
Campbell goes on to say, in part:
Below is a brief synopsis of the IMF Outlook in which they suggests:
- “global prospects are gradually strengthening, but downside risks remain elevated”;
- major advanced economies will likely resume weak recovery;
- emerging and developing economies are likely to sustain relatively “solid” activity;
- overall, “recent improvements are very fragile”;
- the Eurozone is expected to go into mild recession in 2012;
- “downside risks continue to loom large”;
- the immediate concern is that an escalation of the Eurozone “crisis will trigger a much more generalized flight from risk”;
- “geopolitical uncertainty could trigger a sharp increase in oil prices”; and,
- “austerity alone cannot treat the economic malaise in the major advanced economies” – “resources from stronger peers” (read reallocation of wealth in the developed countries from the wealthy to the less wealthy) must be part of overall country policies.
While I don’t disagree with any of the foregoing statements, they largely fall into the ‘platitudes’ category…
The last point, however, is particularly disconcerting for the following reasons:
- austerity measures will have to be forced on unreceptive developed country populations. Inklings of this are already apparent in events that have unfolded in Greece, Spain and the United Kingdom to name but three countries;
- reallocation of wealth will be met with serious resistance, particularly in the highly politically polarized United States;
- all this will unfold over a far longer period of time than it should, which will do nothing but exacerbate the current economic problems in the developed countries; and,
- almost certainly, a further financial crisis will have to be the trigger that actually results in timely and strong actions being taken. Unfortunately, by then ‘the lights might be turned out at the ball field’. After all, why would anyone believe [that] the very politicians and other ‘stage players’, who have contributed to the current developed country economic malaise and contagion risks, are ‘ready and able’ to reverse course unless forced to do this by external factors that will see them harmed if they don’t.
It would be wonderful to have a ‘magic wand’ that could be waved over the developed countries economies (read America and the Eurozone). Unfortunately, the IMF doesn’t have such a ‘magic wand’…[It] is a ‘created agency’ that funnels funds from participating countries to ‘countries in economic need’…[and] does not have subsequent control over how that money is spent by the recipients, nor do the countries that donated the money through the IMF. [As] former IMF President Dominique Strausss-Kahn, quoted as having said last October: “We cannot oblige a country to do something, but what we can do is to notice that a country has a commitment and fulfills, or not, a commitment.”
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Without being negative to Madame Lagarde and her IMF colleagues who, to a person I assume are well intentioned, non-control of contributed funds is… almost certainly a recipe for disaster where those funds are contributed to the…[very] people who ‘managed their way’ into financial difficulty in the first place.
This commentary links to the International Monetary Fund’s 2012 World Economic Outlook, April 2012. You ought to read the Executive Summary (reading time: 8 minutes), even if you elect not to scan the entire document (1 or more hours reading time) or listen to the transcript of a related Press Briefing (45 minutes).
*(The above is just one of many of Stock Research Portal’s daily commentaries, critiques, ‘Think for Yourself’ challenges and daily ‘Speak For Themselves’ World Headline summaries. Subscribe now to receive our full, unabridged newsletter.)
Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
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This analyst sees the perfect storm of converging criteria almost perfectly timed and aligned with the 2012 election cycle. When the moment arrives, the financial earthquake will rapidly demolish the existing highly precarious financial system. Government will stand by helpless, unable to shield itself, much less its vulnerable citizens or private financial institutions from the tsunami of debt and currency destruction. 2012 is shaping up to be the blockbuster main event of the ongoing financial crisis. Massive amounts of new debt, vast quantities of additional digital dollars and the spark of higher interest rates will set off version 2.0 of the credit-driven financial implosion. Let me explain. Words: 1443