G20 Drops Support For Fiscal Stimulus

[RDW]

http://www.ft.com/cms/s/0/786776b4-708f-11df-96ab-00144feabdc0.html

Finance ministers from the world’s leading economies ripped up their support for fiscal stimulus on Saturday, recognising that financial market concerns over sovereign debt had forced a much greater focus on deficit reduction.

The meeting of the Group of 20 finance ministers and central bank governors in Busan, South Korea, also dropped proposals for a global banking levy, instead giving countries leeway to do what they thought best for their domestic ........

[Mega]

....................until the riots start!

Mike

[quinnbear]

The meeting of the Group of 20 finance ministers and central bank governors in Busan, South Korea, also dropped proposals for a global banking levy, instead giving countries leeway to do what they thought best for their domestic ........

That's right. There is no need for a global system of bank regulation when the internal regulation in major finance centres like the UK and the US has been so on the ball.

So perhaps all those arguments that we shouldn't reduce the fiscal stimulus until the recovery is secure will start to fade away? No-one, Brown especially (remember him?) seemed able (before the election) to state clearly when we would know that the recovery had happened. Maybe house prices leaping up 15-20% each year would indicate that the economy is back to its good old self?

QB

[LuckyOne]

Common sense is starting to prevail.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15

The long run, sustainable amount of consumption in any state equals its production. Governments and the private sector can negotiate the split between public and private spending through the tax system but they cannot escape the fact that consumption cannot exceed production in the long run.

What we are seeing happening now is that the debt accumulation which allowed the short run (in economic terms rather than calendar terms) excess of consumption over production is coming to a screeching halt.

Standards of living have to drop to re-align production and consumption in the new world where debt can't continue to "make up the difference".

Austerity is really the wrong word as it contains the implication that we are gicing up something that we "deserve". Rebalancing might be a better word.

[shermanator]

That's right. There is no need for a global system of bank regulation when the internal regulation in major finance centres like the UK and the US has been so on the ball.

So perhaps all those arguments that we shouldn't reduce the fiscal stimulus until the recovery is secure will start to fade away? No-one, Brown especially (remember him?) seemed able (before the election) to state clearly when we would know that the recovery had happened. Maybe house prices leaping up 15-20% each year would indicate that the economy is back to its good old self?

QB

As I've been telling the sheeple that I come across, there is no 'recovereh'. As Friday's employment stats in the US showed private sector job creation and demand is feeble. Actually over the past few weeks the Daily Mail-esque readers are waking up to the fact that debt isn't wealth after all.

[chirpy999]

Shermanator, there is a recovery going on, look at the number of nerw cars on the roads. Also , whilst riding rout ion my motorbike I see plenty of new houses goinmg up at silly prices , this is in the Leicestershire/ Derbyshire area. Do they know sopmething we dont????

[PropertyGuru]

Shermanator, there is a recovery going on, look at the number of nerw cars on the roads. Also , whilst riding rout ion my motorbike I see plenty of new houses goinmg up at silly prices , this is in the Leicestershire/ Derbyshire area. Do they know sopmething we dont????

Top sarcasm!

Much respect to you, that's an almost perfect parody of a shitbrained estate agent, even down to the typos!

[plummet expert]

Common sense is starting to prevail.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15

The long run, sustainable amount of consumption in any state equals its production.

Standards of living have to drop to re-align production and consumption in the new world where debt can't continue to "make up the difference".

You mean that we've been following the wrong policy in the West for about 40 years?! That's when you can trace the failure to manage the balancing act you mention. Gold standard gone in 1971.

[Bloo Loo]

Top sarcasm!

Much respect to you, that's an almost perfect parody of a shitbrained estate agent, even down to the typos!

you sir, are a true wordsmith...Laurejon with venom...perfik!

[OnlyMe]

Saved the banks, screwed the world.