Posts Tagged ‘world bank’

Russia Ukraine Crisis Over Crimea Could Unleash New Round of Global Economic Crisis

March 28th, 2014 Comments off

The apparent relapse into a new Cold War between Russia and the Western nations over the annexation of Crimea by Moscow  will almost certainly have grave repercussions for the global economy. Starting with Russia, the tensions with Ukraine and her Western allies have resulted in economic sanctions, with more threatened. The World Bank has just released a report, suggesting that increased sanctions could result in capital outflows from Russia of $ 133 billion for 2014, with GDP contraction of 1.8 percent, resulting in a recession.

The tit-for-tat sanctions and increased tensions will also hammer Western economies, however. Europe is highly dependent on Russian-supplied oil and natural gas, Furthermore, the already fragile Eurozone will also be hurt by sanctions, either imposed  on Russia or by Russia. The politicians of the world it would seem are not satisfied with all their past blunders-they now want to start a new global crisis, which among other things, will likely exacerbate the still ongoing global economic crisis.


If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:


Hillary Clinton Nude

Chilling video about Hillary Clinton and the 2016 presidential election from the author of the provocative book, “Hillary Clinton Nude: Naked Ambition, Hillary Clinton And America’s Demise.”


Hillary Clinton Nude








Dire Warning From World Bank on Eurozone Debt Crisis

January 20th, 2012 Comments off

The World Bank has released a report, Global Economic Prospects 2012, which lowers previous forecasts on global economic growth and presents a grim picture of what lies ahead. The World Bank now projects global growth at 2.5 percent, with virtual stall speed for advanced economies. The report makes clear that the repercussions of the Eurozone debt crisis are now worldwide.

Developing economies are still projected to have a higher growth rate than developed economies, but at a slower rate, due to overall global contraction resulting from the sovereign debt crisis in Europe.  In a warning to developing economies, Justin Yifu Lin, the World Bank’s chief economist said, “developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time.”  It should be added that all countries need to be prepared for future shocks, as the Eurozone debt crisis, now rampaging for two years, seems likely to get a lot worse during the course of 2012.




World Bank President Warns That Debt and Economic Crisis is Entering “Danger Zone”

August 15th, 2011 Comments off

Speaking at the Asia Society conference in Australia, Robert Zoellick, president of the World Bank, issued a sharp warning on the direction of the global economic and sovereign debt crisis. He told journalists, “I think we are entering a new danger zone and I think that confidence in economic leadership has been slipping and it will be important that the primary economic actors take steps both short and long term to restore that.”

The words of Zoellick reflect unusual candor from a high level policymaker involved in global economic activity.  In essence, he confirms what my blog has been stating for many months; the empirical evidence suggests that the political actors in the major advanced economies are utterly inept when it come to economic and fiscal policy, and their collective incompetence is sending the whole world over a cliff.




World Bank Issues Gloomy Forecast on Global Economic Crisis

June 24th, 2009 Comments off
The World Bank has issued an updated forecast on global economic growth. Its previous report in March was dismal enough; it projected a decline in worldwide GDP of 1.7%. The IMF will shortly present its own report, and issue a somewhat rosier picture for the global economy. However, the World Bank is peering at the global economic downturn through a different set of lenses than more optimistic observers, who seem inclined towards finding “green shoots” amid the financial weeds. The World Bank’s June report is now showing a projected contraction in the global economy of negative 2.9%.

This is a disaster-laden forecast, which essentially describes a developed global economy mired in staggering contraction, while the developing world is experiencing a collective growth rate of just above 1%, which undoubtedly would have slipped into negative territory without the inclusion of China’s GDP, which received the only positive projection from the World Bank, which has upped its China GDP forecast to a growth level of just above 7%. However, China’s economic growth is almost entirely based on borrowed money; a massive stimulus program comprising nearly $600 billion to subsidize domestic demand as a counterweight to the sharp decline in Chinese exports.

In 2010, the global economy is projected to return to growth, though on a lackadaisical scale. Even in projecting growth for next year, the World Bank reduced its already weak forecast. What the data seems to reflect, on the macroeconomic level, is that global trade is in free fall, and with the severe contraction of export-driven economic growth, massive borrowing by the sovereign to fund domestic stimulus activity is about the only major economic expansion still occurring. Unfortunately, fiscal policy is only a short-term driver of growth. Even sovereign states eventually exhaust their capacity to borrow and engage in vast levels of deficit spending.

With the World Bank pointing towards more bad news for the global economy, the European Central Bank has come out with a wet blanket of its own. The ECB is warning that pump priming by governments as their primary policy response to the Global Economic Crisis must soon come to an end, or create unacceptable levels of risk to sustained economic development. In particular, the ECB is concerned about the danger of rampant inflation and uncontrolled fiscal imbalances, as national debts of major developed economies, especially within the Eurozone, comprise a growing proportion of their GDP. More alarmingly, the ECB is not alone; other central bankers and economists are also warning that economic policymakers must soon find what they refer to as an “exit strategy” from the massive fiscal deficits that are currently being accumulated with such reckless abandon.

The World Bank’s June forecast data presents economic decision-makers with a conundrum. With 2009 shaping up to be the single worst year for global economic performance since World War II, and 2010 being projected as a year of anemic growth at best, there will be immense pressure on policymakers to enact follow-up stimulus programs, with even greater levels of public borrowing. For example, Nobel Prize wining economist Paul Krugman has consistently called for a much larger stimulus package than the nearly $800 billion Obama package. The argument will be that without more deficits, the globalized recession will be prolonged, and create higher levels of unemployment. However, the fact that in this fragile economic environment some voices within the policymaking establishment are beginning to question the continuation of debt-driven public financing is a sign that there is no clear consensus on how to resolve the Global Economic Crisis.

To add to all the other bad news, economist Nouriel Roubini, the most astute observer of the global financial and economic contraction, is now warning that while a slight economic upturn is possible in early 2010, there is now a growing risk of a “double dip” recession towards the end of 2010, facilitated in large part by the fractured finances of sovereigns that have accumulated staggering levels of public debt.

Finally, even the most optimistic projections concur that global unemployment will continue to accelerate, well into 2010. With fewer wage earners and a continuing credit contraction, it is hard to see any tangible basis for a sustained economic recovery. Remove deficit spending from the equation, and we could see a second Great Depression. Maintain high levels of public borrowing, and the global credit and bond markets will impose their own will, leading to equally cataclysmic economic consequences.

The World Bank’s updated economic forecast does not present a clear roadmap for the future of the global economy. What it does provides is more evidence that the Global Economic Crisis is far from over, and that there is no clear answer to the question of how to bring this globalized disaster to an end, and restore healthy, sustained growth to a battered world economy.


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