International Monetary Fund Chief: Global Economic Crisis Still Raging
The G20 will be convening this month to no doubt boast about their cooperative efforts to reign in the global financial and economic crisis. The reality is that, at the price of saddling future generations with an immense debt burden, they have temporarily stabilized the financial system. But at what price?
While government deficits are artificially showing quarterly GDP growth or stability after the free fall in Q1 of 2009, consumer spending is contracting due to massive unemployment and stagnation or reduction in real wages.
The head of the IMF, Dominique Strauss-Kahn, recently told the French newspaper LeMonde, “Who will replace the U.S. consumer to power global growth? We have left the financial crisis, but we are still in the economic crisis. ”
The IMF head is correct about the economic crisis. As for the financial crisis, it will be back, with vengeance.