Tuesday, April 7, 2009
IMF director sees social disorder and military conflict without massive global stimulus
Dominique Strauss-Kahn, the managing director, said in February that the world was "already in Depression" and risked a slide into social disorder and military conflict unless political leaders resorted to massive stimulus.
Very sobering, to be sure. Don't expect anymore massive stimulus here in the U.S. unless things get a lot worse. Our flawed belief system precludes it.
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The BBC reported that Ireland trimmed government spending to alleviate the impact of the economic slowdown. (http://news.bbc.co.uk/2/hi/business/7986862.stm). Ireland immediately comes to mind when the IMF director talks about social disorder and yet their government refuses to provide stimulus to stop their economic contraction...
Yes, the gold standard mentality is very much in play, it seems, and that is unfortunate. It leads me to believe that things will have to get a lot worse before that outmoded way of thinking is jettisoned. How sad. By the same token, take steps now to protect yourself and your family if things really do start to fall apart. It could get quite scary and dangerous. Moreover, don't expect the government's response to be quick. We are having to overcome tremendous inertia.
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