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Monetary and Fiscal Failure, Fraud, and Fear of What's Next - by Stephen Lendman
Even the powerful are worried with the IMF on February 7 saying advanced economies are in "depression (and) the worst cannot be ruled out." Forecasting a 2010 recovery is "very uncertain" at this time as further financial turmoil may disrupt it regardless of policies adopted, and trouble is outpacing resources to alleviate it.
On March 10, its Managing Director Dominique Strauss-Kahn forecast "below zero" 2009 global growth - what he termed "the worst performance in most of our lifetimes."
In a March 8, report, the World Bank expressed similar gloom saying:
-- international financial institutions alone can't cover the (public, private and trade deficit) shortfalls for these 129 countries, so other help is needed - a "global solution" to prevent an economic catastrophe;
-- the global economy "is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential;"
-- by mid-2009, global industrial production may be 15% lower than 2008 levels, a shocking differential reminiscent of the 1930s;
-- 2009 "world trade is on track to record its largest decline in 80 years, with the sharpest losses in East Asia;"
-- "the financial crisis will have long-term implications for developing countries" (and developed ones as well); they face higher borrowing costs, lower capital flows, weaker investment, and slower future growth at a very grim time globally.
At the same time, the Asian Development Bank (ADB) reported 2008 shrinkage of over $50 trillion in investor wealth, a shocking decline reflecting financial asset losses in stocks, bonds, currencies, real estate, and various other investments as well as a "surprising run" to the dollar in search of a safe-haven.
The solution to over-indebtedness, of course, is get free of it, but that doesn't work well for bankers, and in the end they generally get what they want, so the rest of us lose out and today's crisis will continue to worsen.
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