IMF head in shock fiscal warning
The intensifying credit crunch is so severe that lower interest rates alone will not be enough “to get out of the turmoil we are in”, Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned at the weekend.
In a dramatic volte face for an international body that as recently as the autumn called for “continued fiscal consolidation” in the US, Dominique Strauss-Kahn, the new IMF head, gave a green light for the proposed US fiscal stimulus package and called for other countries to follow suit. “I don’t think we would get rid of the crisis with just monetary tools,” he said, adding “a new fiscal policy is probably today an accurate way to answer the crisis”.
My comment: The "shocking" part for me in this article is that the IMF MD is calling for defecit spending, interest rate cuts and more monetary inflation. This is what got the global economic landscape into the trouble it is in today! Watch your local Central Bank for rate cuts when it is actually supposed to be increasing rates. Deja vu anyone?
It's like a Doctor prescribing IcyHot/Deep Heat for Jock-Itch !
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