As if it's not enough that governments in the developed world are headed deep into deficit – the US budget deficit for instance could very well top $2 trillion – to fight the global financial meltdown. They are about to be joined by the International Monetary Fund.
IMF managing director Dominique Strauss-Kahn warning that the IMF could run out of money propping up the world's troubled economies. Strauss-Kahn said: "Today, the IMF's resources are enough to face the situation but because we are facing a global crisis, the needs may be much bigger than previously. We have to intervene in Asia, Africa and Central Europe, Latin America, and maybe elsewhere. I can't promise that in six to eight months from now, we will have enough resources."
That means the IMF is likely to be knocking on the doors of sovereign wealth funds.
The IMF has also indicated that things are getting worse, with the world's advanced economies moving from recession into depression. The only answer, he says, is to restructure the banking sector and that hasn't happened yet. And there is no sign that it will.
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