Published on United Press International UPI, by MARTIN WALKER, UPI Editor Emeritus, Oct. 10, 2007.
2 excerpts: … Nor do the big central bankers qualify as global financial managers. They may have consulted somewhat during the latest flurries in the debt markets, but they did not coordinate, and the policies of the U.S. Fed, the European Central Bank, and the banks of England and Japan were palpably not aligned …
… The World Bank and IMF meetings in Washington on the weekend of Oct. 20-21, which will be joined by a meeting of G7 finance ministers to be hosted by the U.S. Treasury, offers a rare opportunity for a kind of global financial summit that could hardly be better timed.
“The roof is starting to collapse on the global housing bubble, as housing markets begin to freeze up not only in the United States, but also in many other countries, such as high-flying Spain,” notes the IMF’s former chief economist, now Harvard professor, Ken Rogoff.
“Money markets, especially in Europe, remain traumatized by the festering global credit crunch,” Rogoff says. “Record-high food and energy prices, combined with sharply rising wages in China, are pushing up inflation in much of the world. Last, but not least, the U.S. productivity boom is decelerating.”
None of this bodes well for the future, with the growing prospect of a long slowdown if not recession in the U.S. economy threatening to tighten the U.S. consumer demand on which China and other emerging economies have long depended. And now the IMF has downgraded its estimates of the growth prospects for Europe and Japan. This may not be the best of times for the globe’s financial elites to reform the crumbling system, but it better be done. (full text).
Unwinding of risk ahead of G7, Oct. 19, 2007;
US$ Stays Weak as G-7 Statement Looms, Oct. 19, 2007;
Asia calmer after FED, Aug. 22, 2007.