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Un Says Absolutely No Green Shoots Or Recovery

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http://uk.reuters.com/article/idUKTRE5863TT20090907

U.N. agency sees no early recovery from recession

Mon Sep 7, 2009 6:11pm BST

By Robert Evans

GENEVA (Reuters) - United Nations economists said on Monday there would be no early recovery from global recession and warned that any move to ease back quickly on government stimulus programmes could make the crisis worse.

In its annual report, the U.N. trade and development agency UNCTAD also urged the creation of a new world reserve system using several currencies rather than just the U.S. dollar, and called for tough controls on cross-border financial flows.

"The likelihood of a recovery in the major developed countries that would be strong enough to bring the world economy back to its pre-crisis growth path in the coming years is quite low," the report said.

At a news conference, UNCTAD Secretary-General Supachai Panitchpakdi and senior aide Heiner Flassbeck were dismissive of suggestions that "green shoots" of recovery had been emerging in wealthy economies this year.

"We don't see any real rebound," said Supachai, former head of the World Trade Organisation and one-time deputy prime minister of Thailand. "There is no sign of a strengthening of underlying economic factors."

UNCTAD's conclusions ran against fresh economic figures and surveys that suggested economies in the United States and Europe may be on the mend, with Chinese manufacturing also picking up speed.

"The synchronised rise in a wide range of markets that do not normally move in the same direction shows that what we have been seeing in the first half of the year is driven by speculation," Flassbeck told reporters in Geneva.

"What is going on is speculation on a recovery, an attempt to anticipate a recovery. But it is a fiction, it is not there yet," he said. "It would be very dangerous if governments start talking about exit strategies from stimulus policies."

'TEMPORARY REBOUND'

UNCTAD's 181-page Trade and Development Report 2009, its main annual publication, itself said what it called the economic winter was far from over.

"Tumbling profits in the real economy, previous over- investment in real estate and rising unemployment will continue to constrain private consumption and investment for the foreseeable future," it said.

The upturn in financial indicators during the first half of 2009, the report added, "is more likely to signal a temporary rebound from abnormally low levels of prices of financial assets and commodities following a downward overshooting that was as irrational as the previous bullish exuberance."

The report also said that using a mix of currencies -- like the Special Drawing Rights (SDRs) of the International Monetary Fund -- as a reserve asset and means of international payment could reduce risks from dependence on the U.S. dollar.

UNCTAD, often criticised by free-market economists as favouring economic management based on a large degree of state control, rejected suggestions that inflation was a major danger from large fiscal stimulus programmes.

Deflation was the real threat in many countries "because governments will find it much more difficult to stabilise a tumbling economy when there is a large-scale fall in wages and consumption," the report said.

To support growth and combat deflation, UNCTAD argued that governments and central banks should maintain or even strengthen expansionary monetary and fiscal policies.

If this path were followed, it said that global growth could turn positive again during 2010, but cautioned it was still unlikely to exceed 1.6 percent for the year.

Poorer countries, especially in Latin American and Asia, could benefit from capital controls to reduce their exposure to further external financial shocks, UNCTAD said, calling for a rethinking "about the wisdom of global financial integration of developing countries in general."

The deepest and darkest of depressions is here to stay. You heard it from the UN: there is no recovery.

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Guest Parry aka GOD
I thought the "U" stood for "United"!

This won't go down well with the G20 leaders who at their meeting in April agreed to try a 3 card brag type bluff holding 5-3-2 hand.

April!!! :huh:

This things well and truly welded to the floor by then.

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Poorer countries, especially in Latin American and Asia, could benefit from capital controls to reduce their exposure to further external financial shocks, UNCTAD said, calling for a rethinking "about the wisdom of global financial integration of developing countries in general."
:ph34r:

Wouldn't GB love to do this to stop the population exchanging £ for Euro or Yen or taking their savings with them as they flee the country when Sterling finally crashes.

I'm surprised they haven't called for a ban on bullion ownership yet.

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I thought the "U" stood for "United"!

This won't go down well with the G20 leaders who at their meeting in April agreed to try a 3 card brag type bluff holding 5-3-2 hand.

I think they would do better with 4-4-2 or perhaps try a diamond formation with a holding player.

5-3-2 is far too defensive we need more attacking options.

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GENEVA (Reuters) - United Nations economists said on Monday there would be no early recovery from global recession and warned that any move to ease back quickly on government stimulus programmes could make the crisis worse.

Ski Jump recovery

and

the problem is the debt that gave the illusion of wealth

the correction can not be stopped without going back in time and stopping the debt build up - they can artificially stimulate all they like (just to keep the illusion going and to garner votes) but it will result in less pain now but more pain later - and they may well destroy any remaining confidence in the currency in the process

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Guest Parry aka GOD
Ski Jump recovery

and

the problem is the debt that gave the illusion of wealth

the correction can not be stopped without going back in time and stopping the debt build up - they can artificially stimulate all they like (just to keep the illusion going and to garner votes) but it will result in less pain now but more pain later - and they may well destroy any remaining confidence in the currency in the process

Yep!

Something I realised of late, the only way out of his nightmare is to build a fvckin' time machine.

It is what it is and there's no going back.

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f it lets go for it

0-0-11

Keynes, Mandelson, Brown, Greenspan, Bernanke,Law (John not Dennis), Paulson, Gono, Harley, Madoff, Ponzi

Mandy would be the keeper. I'm sure he'd be great at "keeping the end up" at the back. :rolleyes:

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Mandy would be the keeper. I'm sure he'd be great at "keeping the end up" at the back. :rolleyes:

I think you'll find he's round the back of the dugout.

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Mandy would be the keeper. I'm sure he'd be great at "keeping the end up" at the back. :rolleyes:

Are you really sure you'd want his sliding tackle from behind? :unsure:

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No, but nobody has even discussed the possibility of a deflationary boom.

Think about it. Yes, sure, the debt doesn't go away. But if costs keep falling faster than wages, which they generally do, you may make less profit on every widget you sell but volume would, presumably, be up. I think the analogy has always been made with India's street-level fix-it economy.

Why not? Less money spent on services like the £100 dentist check-up, £200 MOT and £10 morning coffee and a cake with your parnter after a Saturday shop, and more left for paying down debt.

Think of it like a traffic jam. You can stay stuck for hours and eventually reach your destination having travelled the least distance, or you can pick your way through the back streets - it takes longer but at least you feel like you're making progress.

Edited by AvidFan

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No, but nobody has even discussed the possibility of a deflationary boom.

Think about it. Yes, sure, the debt doesn't go away. But if costs keep falling faster than wages, which they generally do, you may make less profit on every widget you sell but volume would, presumably, be up. I think the analogy has always been made with India's street-level fix-it economy.

Why not? Less money spent on services like the £100 dentist check-up, £200 MOT and £10 morning coffee and a cake with your parnter after a Saturday shop, and more left for paying down debt.

Think of it like a traffic jam. You can stay stuck for hours and eventually reach your destination having travelled the least distance, or you can pick your way through the back streets - it takes longer but at least you feel like you're making progress.

mmm - quite plausable that - most economists with any credance are still saying deflation, so perhaps as ou say the better way out may be deflation - however, if there is deflation, that will mean wages go down (im down 25%!!!), therefore deflation needs to occur at a rate of 25% for me to be better off - but im betting it wont!!!

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