U K Austerity Drive Threatens To Snuff Out Recovery,

[LuckyOne]

http://www.telegraph.co.uk/finance/economics/7880253/UK-austerity-drive-threatens-to-snuff-out-recovery-IMF-warns.html

I really dislike headlines like this.

1. I didn't think that we had even taken the first step towards a recovery until very recently, the previous government just delayed the problem for a few more years. It is diffult to snuff out something that hasn't really started yet.

2. History shows that doing the opposite of what the IMF suggests is a really good idea.

As is often the case, there is an incorrect assumption that a small change in flows suddenly means that the stocks are now massively better than they were.

[porca misèria]

2. History shows that doing the opposite of what the IMF suggests is a really good idea.

On which point ....

When they had the asian financial crisis in 1997, Malaysia's Mahatir Mohamed defied the IMF line, drew huge criticism from the West, yet his country came through it relatively unscathed. Or so it seemed from afar.

I expect some folks on here could throw some light on what really happened there?

[AteMoose]

http://www.telegraph...-IMF-warns.html

I really dislike headlines like this.

1. I didn't think that we had even taken the first step towards a recovery until very recently, the previous government just delayed the problem for a few more years.  It is diffult to snuff out something that hasn't really started yet.

2. History shows that doing the opposite of what the IMF suggests is a really good idea.

As is often the case, there is an incorrect assumption that a small change in flows suddenly means that the stocks are now massively better than they were.

Didnt the IMF warn the UK the opposite only a few months ago? (ie if you dont cut you are risking financial armageddon (or something similar))

[LuckyOne]

On which point ....

When they had the asian financial crisis in 1997, Malaysia's Mahatir Mohamed defied the IMF line, drew huge criticism from the West, yet his country came through it relatively unscathed. Or so it seemed from afar.

I expect some folks on here could throw some light on what really happened there?

My view is that Malaysia was able to fund its growth onshore and organically. The fact that they did not have material exposure to foreign currency borrowing meant that they could tell the IMF to take a walk when their delegation went to KL and told the Malaysians to submit to an IMF program. They imposed capital controls to prevent capital flight and were able to weather the storm very effectively.

Things were difficult in Malaysia for a while. It was easy for them to blame international speculators and bankers for the regional crisis to deflect the population's anger away from the government.

The lesson here is that a country's sovereignty is a partial function of the level of its foreign currency debt and domestic currency debt held by foreigners.

[Riedquat]

Is the IMF simply made up of exactly the same sort of people who got everyone into this mess?

[interestrateripoff]

Until there is deleveraging there will be no recovery.

Unless of course this is a new economic paradigm.

[LuckyOne]

Is the IMF simply made up of exactly the same sort of people who got everyone into this mess?

.

Edited July 9, 2010 by LuckyOne

[LuckyOne]

Is the IMF simply made up of exactly the same sort of people who got everyone into this mess?

As hard as this is to believe, the IMF is actually made up of people who weren't good enough to get us into this mess in the first place.

Edited July 9, 2010 by LuckyOne

[LuckyOne]

Until there is deleveraging there will be no recovery.

Unless of course this is a new economic paradigm.

And with deleveraging comes lower costs which results in a new, sustainable equilibrium between costs and wages.

[non frog]

I don't care what you lot say I like Austerity Drive. Every new build estate should have one. Also QE Crescent, Inflation Avenue and MEW Mews.

[Meat Puppet]

On which point ....

When they had the asian financial crisis in 1997, Malaysia's Mahatir Mohamed defied the IMF line, drew huge criticism from the West, yet his country came through it relatively unscathed. Or so it seemed from afar.

I expect some folks on here could throw some light on what really happened there?

I was in the region at the time and Malaysia suffered far less than neighbouring Thailand and Indonesia where many were reduced to eating cats or tree bark. Mahatir was roundly criticised at the time - I heard many comments from managers in multinationals that he was the Asian Mugabe.

The decision to introduce capital controls and defy the IMF wasn't purely economic though as there were real fears that austerity would bring about a backlash against the Chinese and Indian communities there. Malaysia has come a long way as a multi ethnic nation which is something the technocrats in the IMF never seem to consider.

Edited July 9, 2010 by Meat Puppet

[200p]

Hmm Does the IMF have a vested interest that we borrow more and get into more debt, so the IMF can step upto the plate?

[Guest spp]

Hmm Does the IMF have a vested interest that we borrow more and get into more debt, so the IMF can step upto the plate?

One word...YES

Debt good, savings bad... What a mess the world is in, thanks to the greedy banksters!

Central bankster "The lemmings must never escape our debt system"

Edited July 9, 2010 by spp

[scepticus]

My view is that Malaysia was able to fund its growth onshore and organically. The fact that they did not have material exposure to foreign currency borrowing meant that they could tell the IMF to take a walk when their delegation went to KL and told the Malaysians to submit to an IMF program. They imposed capital controls to prevent capital flight and were able to weather the storm very effectively.

which is exactly what we should do, if it worked for malaysia why not us?

Things were difficult in Malaysia for a while. It was easy for them to blame international speculators and bankers for the regional crisis to deflect the population's anger away from the government.

The lesson here is that a country's sovereignty is a partial function of the level of its foreign currency debt and domestic currency debt held by foreigners.

no, I think the lesson is not to submit to externally imposed austerity programs that have never done anyone any good. THe entire history of the IMF is littered with failed austerity plans.

Edited July 9, 2010 by scepticus

[interestrateripoff]

no, I think the lesson is not to submit to externally imposed austerity programs that have never done anyone any good. THe entire history of the IMF is littered with failed austerity plans.

Can anyone actually name an IMF rescue that worked in the past 20 years?

[Guest happy?]

http://www.telegraph...-IMF-warns.html

I really dislike headlines like this.

1. I didn't think that we had even taken the first step towards a recovery until very recently, the previous government just delayed the problem for a few more years. It is diffult to snuff out something that hasn't really started yet.

2. History shows that doing the opposite of what the IMF suggests is a really good idea.

As is often the case, there is an incorrect assumption that a small change in flows suddenly means that the stocks are now massively better than they were.

I think we need to dis the IMF - after all they don't agree with HPC group-unthink.

[LuckyOne]

I think we need to dis the IMF - after all they don't agree with HPC group-unthink.

In your considered opinion, what are the three to five best things that the IMF have achieved to date?

[D.C.]

In your considered opinion, what are the three to five best things that the IMF have achieved to date?

http://en.wikipedia.org/wiki/Globalization_and_Its_Discontents

[SNACR]

In your considered opinion, what are the three to five best things that the IMF have achieved to date?

It agrees with the faux-Keynesian/Viv Nicholson government spend, spend, spend, as a panacea for all economic woes, claptrap.

I might go along with it if the last govt hadn't managed to spend in the surplus years too.

[Meat Puppet]

In your considered opinion, what are the three to five best things that the IMF have achieved to date?

I wrote a paper in graduate school ages ago comparing the Portuguese and Greek economies in the post war period to the 80s. I believe I contrasted Portugal's relative success and gave the credit to the IMF who basically ran the country for a while. Then again I was a naive student of about 24 at the time.

[Guest happy?]

In your considered opinion, what are the three to five best things that the IMF have achieved to date?

Do you really believe depressing a weak economy will make it better?

If it did in 1980 where are all the new jobs from the 'sunrise industries' we were promised?

Didn't happen then and won't happen this time.

[tennaval]

Dont worry imf will be in safe hands soon.......

http://www.timeslive.co.za/business/article449241.ece/Brown-rumoured-to-be-new-head-of-IMF

[LuckyOne]

Do you really believe depressing a weak economy will make it better?

If it did in 1980 where are all the new jobs from the 'sunrise industries' we were promised?

Didn't happen then and won't happen this time.

I believe in the exact opposite to what you have described.

I believe that freeing economies from the shackles of state and/or multinational control will release them so that they can flourish.

I believe that IMF control is all about further depressing vulnerable economies.

[LuckyOne]

Dont worry imf will be in safe hands soon.......

http://www.timeslive.co.za/business/article449241.ece/Brown-rumoured-to-be-new-head-of-IMF

I am not sure whether Brown or Krugman would be worse.

They are both false prophets who latch onto the most popular economic theories of the time without regard of the prescriptions of the same theories through different parts of the cycle.

[libspero]

As hard as this is to believe, the IMF is actually made up of people who weren't good enough to get us into this mess in the first place.

Thanks LO.. just spat my coffee out !