IMF warns of increased risks

julieq

Why are you posting quotes from people who have always been wrong, Graham? You might as well post the prognostications of astrologers, surely?

It's a foolish notion anyway. There is no 100% accurate forecast ever because the only way you can be sure is after the event. It's a nonsensical idea to say that something is "wrong" because it isn't 100% accurate. The measure of a good prediction is that it is directionally accurate, and there are plenty of those around even if they don't hit the numbers squarely on the head.

Actually the report is interesting because it's pointing out the dangers of overheating in China, which I've also been pointing out over the past few months with respect to the growing property bubble there. That is the biggest threat really because if there is a sharp property led contraction we'll see all manner of fallout - loss of our capital, probably flooding of commodities onto the market (including Gold which the Chinese are massive buyers of), and so on. What's interesting is that the Chinese government appear to be setting up some scapegoats in the shape of "officials" who have fled the country with $120B. They may well be anticipating this happening sooner rather than later.

Graham_Devon

julieq wrote: »

Why are you posting quotes from people who have always been wrong, Graham?

We wouldn't have anything to discuss, or articles to post on the economy's future, if we couldn't post these articles.

Mindyou, you then go on to say its an interesting article. Poster issues again I guess.

chucky

julieq wrote: »

Why are you posting quotes from people who have always been wrong, Graham?

it's the same IMF thatDevon used to criticise for being wrong and what a surprise something fits his view point and he thinks they're right all of a sudden. nice.

julieq

Graham, I'm pointing out that you're wrong to say all economists are "wrong". Simply saying that shows you don't understand forecasting. I'd always read an IMF report with interest. The same as I'd pretty much always reject the conclusions of a survey presented in a press release by Shelter. There are qualitative differences between sources of forecasts, largely reflecting what they're intended for.

System

Is it just me that has no idea what decisions are being talked about in the OP?

julieq

I think the big one is the game of chicken in the US about the US borrowing limit, there is a lot of right wing posturing going on.

Graham_Devon

julieq wrote: »

I think the big one is the game of chicken in the US about the US borrowing limit, there is a lot of right wing posturing going on.

What can they realistically do though now? It's either more debt, or crisis part 2. Much like Greece.

Hence why the article states you can't keep postponing things.

vivatifosi

Joeskeppi wrote: »

Is it just me that has no idea what decisions are being talked about in the OP?

On the news this morning, there was an article about DSK being in custody in the States and how this has sort of delayed progress at the IMF. It said that the IMF's acting head, whose name escapes me but is an American, says that Europe is being overly sentimental and soft and needs to start being firm (with Greece). Europe meanwhile appears to be hoping that the next head will be a European softie again and the status quo can get back to what it was, though the line as a whole is hardening.

I was watching the business news in bed this morning with one eye open and this was one of the stories. Or alternatively I dreamt it, in which case I must apologise for how boring my dreams are and get out more.

julieq

Graham_Devon wrote: »

What can they realistically do though now? It's either more debt, or crisis part 2. Much like Greece.

Hence why the article states you can't keep postponing things.

You're misunderstanding the article. The IMF believe (as pretty much any credible commentator does) that the US should continue borrowing, because the alternative is a very sharp contraction in the US economy which would have very serious consequences.

If you believe that the decision not to borrow should be taken, that's the status quo, because it's being blocked. So that decision hasn't been delayed. Therefore the IMF aren't complaining about that.

Greece is another issue and probably not all that important globally. The issue is really whether there is a controlled or uncontrolled default, not whether there will be a default. Countries like France are heavily exposed to Greek debt though so will squeal like stuck pigs.

China and the US are the big issues. The US will draw back from the brink because they're really not that stupid. China will certainly go over one way or another.

Graham_Devon

julieq wrote: »

You're misunderstanding the article. The IMF believe (as pretty much any credible commentator does) that the US should continue borrowing, because the alternative is a very sharp contraction in the US economy which would have very serious consequences.

If you believe that the decision not to borrow should be taken, that's the status quo, because it's being blocked. So that decision hasn't been delayed. Therefore the IMF aren't complaining about that.

Greece is another issue and probably not all that important globally. The issue is really whether there is a controlled or uncontrolled default, not whether there will be a default. Countries like France are heavily exposed to Greek debt though so will squeal like stuck pigs.

China and the US are the big issues. The US will draw back from the brink because they're really not that stupid. China will certainly go over one way or another.

Countries like the UK are also quite exposed to greece.

Infact, 3rd largest exposure.



It's largely relevant, IMO, to the western economy, and more to the point. Us. As the domino effect could take place.

As for the debt not being delayed for the US, thats not the point. The US wants more debt. The extra debt/money/QE whatever you want to refer it as will delay any potential issues for a while.