You know the global economy is going from bad to worse when the Institute of International Finance calls for a new global currency deal to keep things from keeling over.
This comes as the International Monetary Fund comes out saying that the West is stuck in near Depression and that any of the austerity measures now being imposed across Europe are likely to do more harm than good, at least in the short term. The political consequences will be deadly.
The report says almost all advanced economies will need to cut deficits and raise taxes to put their fiscal positions back on a sustainable footing in the coming years. In the long term, that might pull those economies back into line, but in the short term, we can expect lots of pain with higher unemployment.
You can watch them make their point here:
But the danger is the political impact of this fiscal consolidation. Expect more civil unrest, riots, and unstable governments.
no comment untill now