August 18, 2011 – PARIS – “Sovereign debt, growth, and social instability” are the three major challenges facing the global economy today. Addressing the Council of Foreign Relations on her 22nd day as Managing Director of the International Monetary Fund, Christine Lagarde outlined the nature and scale of threats to a worldwide economic recovery. For debt to be sustainable, spoke Lagarde, it must be reinforced by strong underlying growth; and for growth to be achieved, it must be delivered by a stable and equitable society. Troubles on the periphery of the Eurozone have been met by cooperation among creditor states along with ‘political courage’ amongst Europe’s leaders. Echoing the UK’s Business Secretary, Vince Cable’s attack on ‘right wing nutters’ in the US impeding raising the debt ceiling, Lagarde blasted the mounting debt as the greatest threat to fiscal stability: “I’m hopeful that the political courage shown by European leaders will soon be followed by bold fiscal action in the U.S. On the debt ceiling, the clock is ticking, and clearly the issue needs to be resolved immediately. Indeed, an adverse fiscal shock in the United States could have serious spillovers on the rest of the world. “But more fundamentally,” continued Lagarde, “a credible fiscal adjustment plan is needed sooner rather than later. –Fresh Business Thinking
Engineering a collapse: But is the IMF helping member nations or actually contributing to their collapse with a monetary policy that is designed to increase sovereign debt, enrich corrupt bureaucrats, speculators and international bankers? Joseph Stiglitz said: “When the IMF arrives in a country, they are interested in only one thing. How do we make sure the banks and financial institutions are paid?… It is the IMF that keeps the [financial] speculators in business. They’re not interested in development, or what helps a country to get out of poverty.” –Independent
Max Keiser says: “The International Monetary Fund is that last thing you need. As a nation, you will lose your sovereignty. It exercises terrorism. You will be raped in such a way, that it will be the worst pain you have ever felt.” –Max Keiser
Global Markets Meltdown: Short-term traders, hedge fund investors, and option traders love volatility because a moving price means there’s money to be made buying and selling at the right time when there’s dramatic market fluctuation. But for the rest of us, the bumpy ride can make planning for the future through equity investment next to impossible. On August 18, 2011, global equity markets went into another tailspin with London markets dropping 3%, Frankfort falling 5%, and the U.S. Dow falling more than –500 points after the opening bell.