Monday, 18 January 2010

beware the expert: Dominique Strauss-Kahn

THE WALL STREET JOURNAL: IMF Chief Cautions Against Early Stimulus Exit

You read a lot of rubbish these days; and if it is not rubbish it is needless and superfluous platitudes you hear from the ones that are to run the show.

IMF Managing Director Dominique Strauss-Kahn noted that private sector demand is "still very weak" in most nations, while jobless rates could rise in the U.S., Europe and Japan in the months ahead.

Although Strauss-Kahn didn't clearly answer the question of what he thinks of concern over monetary tightening by China, he said: "Certainly, we need rapid growth in China."

Private-sector demand and employment conditions, which could be the "best" indicators to determine the timing of withdrawal, are weak in many economies, he said. Private demand remains dependent on government expenditure and is "not on a sustainable path" in most countries, he said.

"There's a risk of...unemployment rising in coming months" in the U.S. and Europe from their current rates of 10%, and in Japan from around 5%, he said.

The IMF's website notes ambitious aims:

About the IMF

The International Monetary Fund (IMF) is an organization of 186 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Ambitious! But obviously in shambles... still, for my part I would like to read about possible solutions and answers, not about what is the obvious.

"Mr. Strauss-Kahn, how do want to achieve a "... rapid growth..." in China and at the same time create new jobs and boost private sector demand in such minor and weak areas like the "U.S., Europe and Japan"?

Thank you for your early answer.

Carpe diem!


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