Tag Archives: World Economy

IMF warns world economy risks chronic new phase of financial crisis | Business | guardian.co.uk

Posted by on April 18, 2013 Comments Off

The International Monetary Fund has warned that new risks to global financial stability are already emerging before the problems left by the deepest slump since the 1930s have been sorted out.

In its half-yearly healthcheck on the financial system, the Fund said failure to deal with old and new risks risked propelling the five-year old crisis into a fresh chronic phase.

José Viñals, the IMF’s financial counsellor) said the improvement in financial markets seen over the past six months would not be sustained unless policy makers addressed “key underlying vulnerabilities”.

IMF warns world economy risks chronic new phase of financial crisis | Business | guardian.co.uk

Global economy faces ‘chronic’ crisis if reforms are not completed, warns IMF – Telegraph

It also found evidence in the United States that “accommodative monetary policies are bringing about an intended shift toward risky assets”.

“Higher borrowing in an environment of slower earnings growth is boosting corporate leverage, reversing the post-crisis trend of maintaining conservative balance sheets,” the IMF said.

“A prolonged period of low interest rates may create incentives to increase leverage beyond manageable levels, extend the decay in underwriting standards, and reinforce the search for yield.”

José Viñals, the IMF’s director of monetary and capital markets, said he was concerned about the rapid deterioration in underwriting standards.

“At this early stage of the cycle we are already seeing a deterioration,” he said.

Global economy faces ‘chronic’ crisis if reforms are not completed, warns IMF – Telegraph

Of course the financial crisis is not going away. We are stuck until the full crash is allowed to happen. We are all following Japan. There is no escape from the corruption, bad decisions and bad ideas, short of a big crash. The stress of this ongoing financial crisis could start destabilizing some countries.

Russian economy at risk from global ‘crisis’

Posted by on April 18, 2013 Comments Off

President Vladimir Putin warned on Monday that the world economy was in crisis and its consequences risked hurting Russia‘s performance just as the global slowdown did in 2008-2009.

Putin ordered Prime Minister Dmitry Medvedev to convene a special meeting of Kremlin and government advisers to come up with a response to a warning that Russia was nearing recession.

The Kremlin chief sternly cautioned that “the global crisis is obtaining ever more dangerous contours that will inevitably impact us, too.”

“This happened in 2008 and this is what we are witnessing today,” Putin said.

Russian economy at risk from global ‘crisis’

Is Russia Heading For Crisis?

Ben Judah, author of Fragile Empire: How Russia Fell In And Out Of Love With Vladimir Putin, argued that Putin’s ruling model is no longer functioning. Judah thinks Putin hasn’t yet realised that the Russia of the 2000s, the Russia which “fell in love with him,” no longer exists. His paper identifies five ”traps” which Putin now faces: an increasingly demanding middle class, the Internet, popular culture, falling oil prices, and corruption:

1. The affluence trap: As living standards rose over the past decade and a new middle class emerged, so too did expectations of better governance. Putin gutted all of the institutions that could have challenged his power, but by doing so created a predatory and corrupt bureaucracy that Russians identify with him.

2. The technology trap: Kremlin-controlled television news is no longer the only source of information for Russians. On the contrary, Russia now has one of the most vibrant online communities in the world.

3. The culture trap: Putin is out of date – his neo-Soviet slogans no longer resonate with a large segment of society, particularly in Moscow which is a very young city.

4: The financial trap: By increasing spending since the 2011 protest movement, Putin has bet the house on the price of oil, the one thing he can’t control.

5: The anti-corruption trap: Seriously cracking down on corruption, which would be popular among the public at large, risks undermining Putin’s support base, which depends on corruption to survive.

Is Russia Heading For Crisis?

JOHNSON’S RUSSIA LIST » Putin’s Commitment to ‘Stability above Everything’ Promises Anything But, Moscow Experts Say

A report by the Inter-Regional Association of Young Political Scientists notes that Vladimir Putin has changed his language to reflect is “commitment to stability above everything else,” a conclusion that one Moscow commentator suggests fails to capture just how dangerous Putin’s position is for Russia as a whole.

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Satarov has written, Petrov says, that Putin’s obsession with stability is disturbing because it “clashes with the demands for change which were clearly articulated by society in 2012.”  What exists in Russia under his rule is “not stability; it is stagnation” and a stagnation that points to decay and collapse.

Clearly, when the authorities “constantly talk about stability,” that raises questions not only about how fearful they must be of any kind of instability but also and perhaps even more disturbingly about “what they have in mind” for themselves and their country when they talk about stability.

JOHNSON’S RUSSIA LIST » Putin’s Commitment to ‘Stability above Everything’ Promises Anything But, Moscow Experts Say

25 Similarities Between Chavez and Putin | Opinion | The Moscow Times

Talk of stability is a disaster. That just locks in all the bad things in society that will continue to grow and grow. Stability means society goes along until its reaches a crisis.

Davos 2013: Global economy still at risk of collapse, says Klaus Schwab – Telegraph

Posted by on January 22, 2013 Comments Off

Swiss economist Mr Schwab, speaking on the eve of the elite annual gathering in the Swiss mountain resort of Davos, called for business and government leaders to focus on “cautious realism” and a recovery of public trust to avoid another major financial crisis.

“The problems and the risks have not gone away,” he said in an interview with the Associated Press. “The world economy may still confront a collapse if very negative constellations occur.”

Davos 2013: Global economy still at risk of collapse, says Klaus Schwab – Telegraph

UN report predicts likely global economic downturn in 2013 | World Tribune

Posted by on January 6, 2013 Comments Off

The global economy risks sliding back into recession.  That’s the sober assessment from the UN’s World Economic Situation and Prospects 2013, which cites weak economic growth in 2012, and an anemic expected expansion over the next two years.  And while economic woes in the United States, Europe and Japan have slowed global growth, once-seemingly supercharged economies such as China, India and Brazil are shifting into lower gear too.

“Weakness in the major developed economies are at the root of the global economic slowdown,” the report asserts, economies in “Europe are trapped in a vicious cycle of high unemployment, financial sector fragility, heightened sovereign risks, fiscal austerity and low growth.”  The report warns, “The U.S. economy slowed significantly during 2012.”

UN report predicts likely global economic downturn in 2013 | World Tribune

Why 2013 eerily looks like the world of 1913, on the cusp of the Great War

Posted by on January 5, 2013 Comments Off

The leading power of the age is in relative decline, beset by political crisis at home and by steadily eroding economic prowess. Rising powers are jostling for position in the four corners of the world, some seeking a new place for themselves within the current global order, others questioning its very legitimacy. Democracy and despotism are locked in uneasy competition. A world economy is interconnected as never before by flows of money, trade, and people, and by the unprecedented spread of new, distance-destroying technologies. A global society, perhaps even a global moral consciousness, is emerging as a result. Small-town America rails at the excessive power of Wall Street. Asia is rising once again. And, yes, there’s trouble in the Middle East.

Sound familiar?

In many ways, the world of 1913, the last year before the Great War, seems not so much the world of 100 years ago as the world of today, curiously refracted through time. …

Eve of Disaster – By Charles Emmerson | Foreign Policy

Robert Samuelson: Can globalization survive 2013? – The Washington Post

Posted by on January 1, 2013 Comments Off

One fateful question for 2013 is this: What happens to globalization? For decades, growing volumes of cross-border trade and money flows have fueled strong economic growth. But something remarkable is happening; trade and international money flows are slowing and, in some cases, declining. David Smick, the perceptive editor of the International Economy magazine, calls the retreat “deglobalization.” What’s unclear is whether this heralds prolonged economic stagnation and rising nationalism or, optimistically, makes the world economy more stable and politically acceptable.

Robert Samuelson: Can globalization survive 2013? – The Washington Post

Planning for China’s ‘Fall’

Posted by on November 23, 2012 Comments Off

Yet a growing number of China watchers have been raising the alarm that all is not well in the world’s second-largest economy. Indeed, any discussion of China these days would be far more foresighted to focus on the growing challenges and potential dangers that the new leadership is facing. The implications of China experiencing an unexpected economic crash or major political crisis, let alone a military conflict, should be as much a part of strategic planning as plans based on more optimistic scenarios. Not so long ago, the U.S. government and CIA were caught flat-footed by the collapse of the Soviet Union. To avoid surprise, the following is a short list of things that governments and policy analysts around the world should pay attention to:

Planning for China’s ‘Fall’

Congressional Report: Chinese government-controlled enterprises threaten U.S., world economy | Washington Free Beacon

Posted by on November 13, 2012 Comments Off

China’s government-controlled enterprises are targeting the U.S. market and pose a threat to U.S. companies, free markets, and fair trade, according to a forthcoming report by a congressional Chinese commission.

“The Chinese system of state capitalism or ‘capitalism with Chinese characteristics’ has blocked many of the potential benefits of a free market, not only in China, but among China’s trading partners,” concluded a draft report by the U.S.-China Economic and Security Review Commission.

Congressional Report: Chinese government-controlled enterprises threaten U.S., world economy | Washington Free Beacon

Japan, China, South Korea island disputes threaten global economy

Posted by on October 23, 2012 Comments Off

Island disputes between Japan, China, and South Korea are threatening financial stability in East Asia, and with it, the global economy. The next US administration should push publicly and persistently for a solution.

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The timing of all this could not be worse for the global economy. 

In its October report on the World Economic Outlook, the IMF warns that “risks for a serious global slowdown are alarmingly high.” East Asia has been the most important region for global economic growth since 2008. With US and European economic struggles likely to continue next year, East Asia’s economic performance is more important to the world economy than ever.

Japan, China, South Korea island disputes threaten global economy (+ video) – CSMonitor.com

How Obama Reset American Power to Zero with Putin

Posted by on October 18, 2012 Comments Off

The Reset Button didn’t work in Russia, but it did set the stage for a series of Russian humiliations of Obama, some of which Douglas Feith lays out in Foreign Policy.

In August 2011, Putin, then the prime minister, accused the United States of living “like a parasite” on the world economy. At a May 2012 international missile defense conference in Moscow, Russia’s top military officer Gen. Nikolai Makarov denounced U.S-NATO plans to build defenses against ballistic missiles launched from the Middle East. Referring to potential Eastern European sites for such defenses, General Makarov made a remarkable threat: “A decision to use destructive force pre-emptively will be taken if the situation worsens.”

How Obama Reset American Power to Zero with Putin

Gen. Nikolai Makarov is effectively threatening nuclear war over NATO missile defenses. Apparently, nobody bats an eyelash over these kinds of comments. Perhaps that’s because they’re sleeping.