January 18, 2010
Since the beginning of the real estate crisis in the US in 2006, the world has been on the edge of their seats as governments threw everything but the kitchen sink at the economy. Finally, we received the answer we’ve all been waiting for from the International Monetary Fund (IMF).
The IMF announced that growth is higher than expected which means that we’ve avoided another Great Depression… Phew. But it wasn’t all sunshine and roses.
Strauss-Kahn, the head of the IMF, said that countries haven’t taken enough proactive steps to fix the root of the problem: better regulation on financial markets. Also, he stressed the point that the growth was spurred by government expenditure, not private demand.
A plan to withdraw [stimulus] measures “should be designed today” yet not “implemented” because world economies are still dependent on government support and private demand remains weak, he said. Bloomberg
So, we’re out of the woods… I think… but only if the government plays it right. And even then, it seems that Strauss-Kahn is saying that unless we keep our banks in check this time around, we run the risk of repeating history.