David Lipton, IMF First Deputy Managing Director writes that when G20 leaders met at the height of the GFC they had two simple objectives: i) to resolve the crisis; and ii) to make sure it did not happen again……..
Progress has been hard in part because the measures called for under each agenda item to some extent undermine the other agenda item. The first objective, exiting the crisis requires strong enough demand to restore growth and jobs. At the same time, the second objective, ensuring sustainability and laying the foundation for a stronger global economy, requires deleveraging in many advanced economies, which will dampen demand, particularly if it happens simultaneously in many sectors in many countries.
Lipton points out that the actions of all major players impact on each other. He calls for deficit countries to continue fiscal consolidation and private sector deleveraging “in a sustainable way” and for “structural reforms to improve competitiveness”. Surplus countries also need to cut back on “reserve accumulation” and allow “more exchange rate flexibility”.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
Yes, Mr. Lipton…….”Charge on G20 with your deleveraging genocide”.
I say—- What has happened to miss “Liberty”, it has been an instantaneous and silent death; she was executed by the state.
ehmu