Andy Sutton's Extemporania

Weekly Commentaries and Occasional Observations

About Sutton & Associates

Tags: debt

US Lacks Credibility on Debt – IMF

by TwoCentsEditor

Published on: 04/13/2011

Categories: Current Events, Economics, Financial Markets

Tags: andy sutton, Centsible Investor, debt, debt crisis, greece, IMF, piigs, World Bank

Comments: No Comments

Editor’s Note: What is totally amazing to me is how the IMF can suggest the acceleration of the US to third world status without even one whimper from the media. The idea that the US economy is ‘sufficiently strong’ to be able to withstand significant austerity measures is an absolute joke.

The US lacks a “credible strategy” to stabilise its mounting public debt, posing a small but significant risk of a new global economic crisis, says the International Monetary Fund.

In an unusually stern rebuke to its largest shareholder, the IMF said the US was the only advanced economy to be increasing its underlying budget deficit in 2011, at a time when its economy was growing fast enough to reduce borrowing.

The latest warning on the deficit was delivered as Barack Obama, the US president, is becoming increasingly engaged in the debate over ways to curb America’s mounting debt.

To meet the 2010 pledge by the Group of 20 countries for all advanced economies – except Japan – to halve their deficits by 2013, the US would need to implement tougher austerity measures than in any two-year period since records began in 1960, the IMF said.

In its twice-yearly Fiscal Monitor, the IMF added that on its current plans the US would join Japan as the only country with rising public debt in 2016, creating a risk for the global economy.

Carlo Cottarelli, head of fiscal affairs at the Fund, said: “It is a risk that if it materialises would have very important consequences… for the rest of the world. So it is important that the US undertakes fiscal adjustment in a way sooner rather than later.”

At the moment, the US had outlined less than half of the tax increases and spending cuts necessary to bring its public debt down in the medium term, the IMF calculated. “More sizeable reductions in medium-term deficits are needed and will require broader reforms, including to social security and taxation,” the IMF said.

The IMF said the US economy “appears sufficiently strong” to withstand greater austerity measures and tax increases, adding that the benefit of last year’s stimulus package “is likely to be low relative to its costs”.

Having narrowly averted a government shutdown last week through a deal with congressional Republicans to cut $38.5bn in spending from this year’s budget, Mr Obama will on Wednesday unveil his plans to rein in America’s long-term deficits, which are driven by popular programmes like Medicare, Medicaid and social security.

The debate over US fiscal policy is expected to intensify in the coming weeks and months, as the US hits its congressionally mandated debt limit of $14,300bn. Without approval by lawmakers to increase it, the US could face potential default as early as July, and so far Republicans and Democrats remain some distance from reaching a deal.

US Debt Jumps $54 Billion in Week Preceding Deal to Cut $38 Billion

by TwoCentsEditor

Published on: 04/09/2011

Categories: Current Events, Economics, Financial Markets

Tags: andy sutton, debt, fiscal gap, government, government crime, hypocrisy, lies, LLC, money, politics, stock market, stocks, Sutton & Associates, the centsible investor

Comments: No Comments

The federal debt increased $54.1 billion in the eight days preceding the deal made by President Barack Obama, Senate Majority Leader Harry Reid (D.-Nev.) and House Speaker John Boehner (R.-Ohio) to cut $38.5 billion in federal spending for the remainder of fiscal year 2011, which runs through September.

The debt was $14.2101 trillion on March 30, according to the Bureau of the Public Debt, and $14.2642 on April 7.

Since the beginning of the fiscal year on Oct. 1, 2010, the national debt has increase by $653.4 billion.

Proposed Budget to ‘Pay Off’ National Debt?

by TwoCentsEditor

Published on: 04/05/2011

Categories: Current Events, Economics, Financial Markets, Foreign Exchange Markets

Tags: bonds, debt, deficit, interest, money, national debt, stocks

Comments: No Comments

Editor’s Note: Now this would make a good April Fool’s joke. $4 Trillion in cuts over 10 years.. $400 Billion a year – that doesn’t even cover the interest paid on the national debt each year. These guys have got to be kidding. Not to mention the structural defects in Social Security and Medicare. They think that by changing the source of funding it all goes away. This type of economic gymnastics is why we’re in this mess in the first place.

The Republican budget proposal will eliminate the national debt while still preserving costly entitlement programs like Medicare and Social Security, Rep. Paul Ryan told CNBC.

Speaking just hours before the spending plan gets its formal introduction before Congress, Ryan, head of the House Budget Committee, said the debt will peak at 74.5 percent of gross domestic product in 2014 and then drop from there.

“We’ve got to show the country that we can get this situation under control and grow the economy, and that’s what we’re doing,” he said. “So whether (Democratic Senate Majority Leader) Harry Reid is willing to pass this bill or Barack Obama is ready to sign it, I don’t know the answer to that question.

“What I do know is I can’t look my kids and my constituents in the eyes with my conscience being clear and not know that I didn’t do everything I could to try and fix this problem before it got out of control.”

Among the key tenets in a budget resolution to be presented are fundamental changes to the way Medicare and Medicaid are financed. The resolution forestalls action on Social Security, though Ryan said he expects a bipartisan agreement on that issue later this year.

More broadly, the plan contains provisions that Ryan has said will slash $4 trillion from federal spending over the next decade.

The resolution is necessary as a potential shutdown looms over Washington and Congress must approve raising the national debt limit.

Ryan acknowledged the political obstacles he will face both from Democrats and some members of this own party who may bristle at the aggressive spending cuts involved.

“The problem in Washington is, they take any honest and sincere attempt to fix this problem and use it as a political weapon against you in the next election,” he said. “We can’t let that deter us.”

GOP 2012 Budget Proposal to cut $4T over a Decade

by TwoCentsEditor

Published on: 04/03/2011

Categories: Current Events, Economics, Financial Markets

Tags: budget, budget deficit, David Walker, debt, debt commission, Federal Reserve, fiscal policy, generational account, laurence kotlikoff

Comments: 1 Comment

Editor’s Note: And that still isn’t enough; given the projected deficits, $4T over the next 10 years won’t even wipe out half the yearly budget shortfall, let alone put a dent in the fiscal gap.

WASHINGTON (AP) — A Republican plan for the 2012 budget would cut more than $4 trillion over the next decade, more than even the president’s debt commission proposed, with spending caps as well as changes in the Medicare and Medicaid health programs, its principal author said Sunday.

The spending blueprint from Rep. Paul Ryan, the chairman of the House Budget Committee, is to be released Tuesday. It deals with the budget year that begins Oct. 1, not the current one that is the subject of negotiations aimed at preventing a partial government shutdown on Friday.

In an interview with “Fox News Sunday,” Ryan said budget writers are working out the 2012 numbers with the Congressional Budget Office, but he said the overall spending reductions would come to “a lot more” than $4 trillion. The debt commission appointed by President Barack Obama recommended a plan that it said would achieve nearly $4 trillion in deficit reduction.

Ryan said Obama’s call for freezing nondefense discretionary spending actually locks in spending at high levels. Under the forthcoming GOP plan, Ryan said spending would return to 2008 levels and thus cut an additional $400 billion over 10 years.

Speaking broadly about the proposal, Ryan said it would include:

-A “premium support system” for Medicare. In the future, older people would choose plans in the marketplace and the government would subsidize those plans. Ryan said that would differ from the voucher system he has proposed in the past. Those 55 and older would remain under the present Medicare system.

Ryan acknowledged that the “premium support system” would shift more costs to Medicare recipients, especially what he called “wealthy seniors.” He did not define at what level someone would be considered wealthy.

-Block grants to states for Medicaid, the health program for the poor. Ryan disputed reports that the plan would seek savings of $1 trillion over 10 years from Medicaid, but would say only that the details would be in the plan.

“Medicare and Medicaid spending will go up every single year under our budget. They don’t just go up as much as they’re going right now,” he said. Ryan said governors have told members of Congress they want “the freedom to customize our Medicaid programs. … We want to get governors freedom to do that.”

-A statutory cap on actual discretionary spending as a percentage of the economy. While Ryan did not specify the amount during the interview, he said it would be at a lower level than proposed by Obama and would return the government to its “historic size.”

-Pro-growth tax changes, including lower tax rates and broadening the tax base. Ryan said overhauling taxes would boost the economy. The plan will not propose tax increases.

Ryan was a member of the bipartisan debt commission but voted against its final recommendations, saying they failed to reduce spending on health care. The commission also endorsed tax increases along with painful spending cuts as necessary to dealing with the debt problem.

“We’re not going to go down the path of raising taxes on people and raising taxes on the economy. We want to go after the source of the problem, and that is spending,” Ryan said Sunday.

Ryan didn’t mention how the budget plan would address Social Security.

Democratic Sen. Mark Warner of Virginia was skeptical that Ryan’s proposal could achieve its targets without damaging social programs. He also questioned whether reductions in defense spending and seeking more revenue through tax reform would be part of the plan.

“I don’t know how you get there without taking basically a meat ax to those programs who protect the most vulnerable in the country,” Warner said on CNN’s “State of the Union.”

“I’ll give anybody the benefit of a doubt until I get a chance to look at the details,” he said, “but I think the only way you’re going to really get there is if you put all of these things, including defense spending, including tax reform, as part of the overall package.”

Sen. Dick Durbin, D-Ill., part of a six-member group of Republicans and Democrats forging their own budget proposal, said that the lawmakers would be looking for “real balance” in Ryan’s plan and wanting all options considered.

“I think we’ll come at it differently,” Durbin said on “Meet the Press” on NBC. “The idea of sparing the Pentagon from any savings, not imposing any new sacrifice on the wealthiest Americans, I think goes way too far. We have got to make certain that it’s a balanced approach and one that can be sustained over the next 10 years.”

Ryan criticized Obama, telling Fox that the president was “punting on the budget and not doing a thing to prevent a debt crisis, which every single economist tells us is coming sooner rather than later in this country.”

“You have to address the drivers of our debt,” he said. “We need to engage with the American people on a fact-based budget, on stopping politicians from making empty promises to people and talk to the country about what is necessary to fix these problems.”

Media Source: Tentative Budget Deal Reached

by TwoCentsEditor

Published on: 03/30/2011

Categories: Current Events, Economics, Financial Markets

Tags: austerity, bankruptcy, budget cuts, budget deficit, credit, debt, money, national debt, stocks

Comments: No Comments

Editor’s Note: Only $33 Billion in cuts out of a $3.5 trillion budget is a shade less than 1%. That isn’t even a good warmup. These people have absolutely no idea of the fiscal woes we’re already in. This is the best we have in America?

Sources tell me that budget negotiators on Capitol Hill have tentatively agreed on a deal that would involve at least $33 billion in spending cuts from this year’s budget. That’s $23 billion dollars more than Democrats have previously agreed to in short-term continuingresolutions, and $28 billion less than Republicans previously passed in the House.

Members of the House Appropriations Committee will begin discussing how to hit that number with their Senate counterparts as soon as tonight, and Vice President Biden is heading to Capitol Hill for a 6pm meeting with the Senate Democratic leadership.

The deal could still fall apart over the composition of the cuts, or policy “riders” previously passed by the House. These include issues like de-funding Planned Parenthood and President Obama’s health care legislation. It’s also not clear that this compromise will fly with rank-and-file House Republicans, which means that the $33 billion goalcould still climb by a few billion. But this is most significant progress since the beginning of negotiations.

13% of Homes Now Empty – CNNMoney

by TwoCentsEditor

Published on: 03/29/2011

Categories: Current Events, Economics, Financial Markets

Tags: bonds, debt, foreclosures, housing, housing crash, housing market, interest rates, investments, Mike Norman, peter schiff, propaganda, stocks

Comments: No Comments

Editor’s Notes: The last time we reported on this, the number was 11% and that was only a month or two ago. The 11% figure was reported by CNBC. Obviously, we have no inside knowledge as to the actual number of empty homes, but if the numbers are in fact worsening that quickly, then somebody needs to grab Steve Liesman over at CNBC and tell him he’d better lay off the ‘everything’s great’ propaganda he likes to push. (Steve majored in journalism in school by the way, not economics).

High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.

And it’s only getting worse: The national vacancy rate crept up to just over 13% according to last week’s decennial census report. That’s up from 12.1% in 2007. So which is it guys?

“More vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.

Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).

The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.

These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.

“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”

But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.

In Maine, more than two-thirds of the 160,000 vacancies were vacation homes in 2009; Vermont had a similarly high concentration.

Compare them with Connecticut, which has a vacancy rate of just 7.9%, the lowest of all the states. If you back out the vacation properties from the statistics, the states have very similar vacancy rates: 6.1% for Connecticut and 7% for Maine.

Some states have high vacancy rates even after backing out the second homes: Florida’s is about 10%; Arizona’s is 10.7%; and Nevada’s 11.4%.

Besides Connecticut, the other states with lowest vacancy rates are California, Iowa, Illinois, Virginia and Washington, all at 9.2% or lower.

Fed Finally Being Blamed for Inflation

by TwoCentsEditor

Published on: 03/25/2011

Categories: Current Events, Economics, Financial Markets

Tags: bernanke, debt, deflation, dollar, Federal Reserve, fiat currency, fiat money, inflation, prices

Comments: No Comments

Editor’s Note: Even though this article tried to make a mockery of the issue, it is a somewhat tacit admission of what thinking people have known for a long time: inflation is a monetary event and central banks are in fact responsible for the concomitant loss in purchasing power.

Food riots, deposed Middle Eastern despots and now this? Last week, a Texas man brandishing an assault rifle was involved in a three-hour shoot-out with police and had to be subdued with tear gas after ordering seven Beefy Crunch Burritos at a Taco Bell drive-through and being informed that their price had risen from 99 cents to $1.49.

Late night comedians and serious pundits alike had a field day with the story, opining on issues like fast-food culture, obesity (the seven burritos contain 3,600 calories, double the recommended daily intake) and gun control.

With his petty gripe, the gunman, Ricardo Jones, is no Muhammad al Bouazizi, the self-immolating Tunisian fruit seller who inspired millions across the region to throw off the yoke of tyranny, but 50 per cent is 50 per cent in San’a or San Antonio. Food inflation is a global phenomenon.

Taco Bell may well not be the villain here. It was recently alleged in a class-action lawsuit that only 35 per cent of what the fast-food chain describes as “beef” meets the strict technical definition (meat from a cow). The remaining 65 per cent is claimed to be made from fillers such as potassium lactate, modified corn starch, malto-dextrin and autolyzed yeast extract. Taco Bell has said it vigorously disputes the allegations made about its food – but if the class action claims were proved to be true, it could be seen as an ingenious attempt to hold the line on meat price rises. However, it is not only the price of meat that is rising alas, but also fuel, flour, vegetables and even autolyzed yeast extract.

The finger of blame is increasingly pointing toward central banks and the US Federal Reserve in particular. By printing money through quantitative easing, there are supposedly more dollars, yen and pounds chasing the same number of Beefy Crunch Burritos. Fed chairman Ben Bernanke actually was asked during a speaking engagement last month whether the central bank was culpable for the revolution in Egypt.

“I think it’s entirely unfair to attribute excess demand pressures in emerging markets to US monetary policy because emerging markets have all the tools they need to address excess demand in those countries,” said the clearly annoyed banker.

But an increasingly common view is that, with the very best intentions, he is at fault. Critics regularly cite the words of Milton Friedman, who said that “inflation is always and everywhere a monetary phenomenon”.

The great economist’s words and work are being misinterpreted though. The monetary base has indeed mushroomed but, in the quantity theory of money, it is not a simple increase in the base that causes inflation. It is an excess supply of money, which is not the case – not yet anyway. At the moment, the money shows up as excess reserves on bank balance sheets, for which they receive interest.

If the Fed were to reduce or eliminate what it pays banks to park those reserves at the Fed, or if banks decided to expand balance sheets rapidly, then things would change. A little of this might be welcome but, if the Fed were too slow to put the brakes on a surge in lending out of fear of harming the recovery, serious inflation could result.

QE is not entirely off the hook though. Even if there is actually not more money in the economy chasing assets, the market’s anticipation of future recklessness and the opportunity cost for investors of holding low-yielding cash has increased the appeal of real assets. The Fed is happy to see this when it comes to shares or homes as this creates a benign wealth effect. Commodities are a different matter.

Even so, the price of oil, or of burritos for that matter, corresponds much more closely to supply and demand than, say, a share of Apple, which is not consumed and whose value is in the eye of the beholder. Rising affluence of developing market consumers – the so-called “march of the Chinese meat-eaters” – is the chief culprit. This is exacerbated by distorted currency regimes such as China’s, as Mr Bernanke hinted.

Just don’t shoot the messenger. Or the drive-through employee for that matter.

US on Road to Insolvency – Fisher

by TwoCentsEditor

Published on: 03/22/2011

Categories: Economics, Financial Markets, Foreign Exchange Markets

Tags: bonds, debt, Economics, Federal Reserve, government corruption, money, politics, propaganda, stocks

Comments: No Comments

The United States is on a fiscal path towards insolvency and policymakers are at a “tipping point,” a Federal Reserve official said on Tuesday.

The President of the Federal Bank of Dallas, Richard W. Fisher

“If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when,” Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt. “The short-term negotiations are very important, I look at this as a tipping point.”

But he added he was confident in the Americans’ ability to take the right decisions and said the country would avoid insolvency. Based on what?

“I think we are at the beginning of the process and it’s going to be very painful,” he added.

Fisher earlier said the US economic recovery is gathering momentum, adding that he personally was extremely vigilant on inflation pressures.

“We are all mindful of this phenomenon. Speaking personally, I am concerned and I am going to be extremely vigilant on that front,” Fisher said in an interview with CNBC.

Fisher added that the U.S. Federal Reserve had ways to tighten its monetary policy other than interest rates, including by selling Treasurys, changing reserves levels and using time deposits.

He added that he does not support the Fed embarking on an additional round of quantitative easing. (This time he’s playing ‘good cop’)

“Barring some extraordinary circumstance I cannot forsee…I would vote against a QE3,” Fisher told CNBC. “I don’t think it’s necessary. Again, we have a self-sustaining recovery.” Self-sustaining? This guy is obviously completely disconnected from reality and should be discredited as such. This ‘Good Cop / Bad Cop’ routine the Fed governors play is really wearing thin. Outside the lapdog media, none of these people have any credibility whatsoever.

NC Lawmaker Calls for State to Return to Gold Standard

by TwoCentsEditor

Published on: 03/20/2011

Categories: Current Events, Economics, Financial Markets

Tags: austrian economics, bonds, debt, fiat currency, gold, gold standard, government, propaganda, silver

Comments: 1 Comment

RALEIGH Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, state Rep. Glen Bradley wants North Carolina to issue its own legal tender backed by silver and gold.

The Republican from Youngsville has introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

If the state treasurer starts accepting precious metals as payment, Bradley said that could prod the private sector to follow suit – potentially allowing residents to trade gold for groceries.

“I think we’re in the process of inflating a dollar bubble that could be very devastating,” said Bradley, a freshman legislator elected in November’s GOP tide. “The idea is once the study commission finishes its work, then we could build on top of the hard-money currency with an actual State Tender Act that will basically [issue currency] in correspondence to precious metals stored in the state treasury.”

Bradley’s bill has yet to attract any co-sponsors among his fellow Republicans.

Mike Walden, an economics professor at N.C. State University, said the notion of North Carolina reverting to having its own currency is outlandish.

“We dealt with this issue about 100 years ago when the Federal Reserve was established,” Walden said. “If North Carolina were to have its own currency, that would put us at an extreme competitive disadvantage vis-a-vis other parts of the country and other parts of the world.”

State Treasurer Janet Cowell joked that Bradley’s precious metals proposal could increase efficiency in state government by providing a good use for her department’s old basement vault, which is currently used for storage.

“I look forward to engaging in an important public policy debate about whose face should be on the gold coin,” quipped Cowell, a Democrat.

But Bradley predicts that world events could soon prove him prescient.

“I don’t necessarily believe [the Federal Reserve] is about to collapse right now,” said Bradley, 37. “There are still a few things they can do with qualitative easing to sort of extend their survival. It’s just a question of how long. Right know we have a lot of sovereign debt going to China and Japan. When that debt stops being purchased by foreign countries, that currency is going to flood back onto American shores, potentially creating hyperinflation and bursting the currency bubble we have coming in Federal Reserve notes today.”

The Austrian School

Bradley, a self-employed computer technician and former Marine, attended Southeastern Baptist Theological Seminary in Wake Forest until he could no longer afford tuition, he said. While he has not taken any in-depth classes in economics, Bradley described himself as a devotee of the Austrian School, a branch of economic thought that originated in Vienna and was influential before World War I. A gross mischaracterization of the Austrian School of Economics.

Back then the value of most of the world’s currencies were tied to the amount of the gold amassed in their national treasuries. The United States abandoned the gold standard in 1933, after it was blamed for worsening the Great Depression. More Propaganda

Though the ideas of the Austrian School have been rejected by mainstream economists for much of the last century, they are in vogue with Libertarians and some supporters of the tea party movement. Mainstream Keynesian economists, whose policies have caused the globe to be irretrievably riddled with debt.

The language of Bradley’s House Bill 301 predicts a dire future for the U.S. economy.

“Many widely recognized experts predict the inevitable destruction of the Federal Reserve System’s currency through hyperinflation in the foreseeable future,” the bill declares. “In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the State is not prepared, the State’s governmental finances and private economy will be thrown into chaos. …”

Asked who are the “widely recognized experts” to which his bill refers, Bradley cited U.S. Rep. Ron Paul of Texas and Peter Schiff, a precious-metals dealer and investor who regularly appears as a commentator on Fox News.

Walden, the economics professor, said the views espoused by adherents of the Austrian School are well outside the mainstream of modern economic thought.

Bradley’s ideas for taking the state back to the Gilded Age don’t end at economics.

About Commerce Clause

A strict Constitutionalist, he has also introduced bills to exempt North Carolina agricultural products and firearms manufactured in the state from federal regulation as long as they are not sold or exported across state lines, measures that fly in the face of more than a century of U.S. Supreme Court rulings interpreting the Commerce Clause of the U.S. Constitution.

“They’re wrong,” Bradley said confidently of generations of justices. “The 10th Amendment is quite clear that those powers not reserved in the Constitution for the federal government are reserved to the states. It’s doesn’t take a high-priced lawyer to interpret the Constitution.”

Rep. Becky Carney, a Charlotte Democrat, said she found Bradley’s currency bill “perplexing.”

“There has absolutely been no indication of the collapse of the Federal Reserve system,” said Carney, who serves on the House banking committee. “It sounds like the Chicken Little story about ‘the sky is falling.’” - Propaganda

The office of House Speaker Thom Tillis declined to say whether the GOP leadership supports Bradley’s proposal to create a state currency. His bill has been referred to the House rules committee, where legislation is sometimes sent to die.

“There are a lot of diverse opinions and diverse views in our caucus,” said Jordan Shaw, Tillis’ spokesman. “I don’t think we’re going to forecast what will happen.”

The IMF is Drinking Its Own Koolaid

by TwoCentsEditor

Published on: 03/17/2011

Categories: Current Events, Economics

Tags: bonds, debt, debt crisis, Euro, GDP, japan, keynesian economics, stocks, yen

Comments: No Comments

Editor’s Note: Japan is in debt up to its eyeballs – even worse than the US in terms of % of GDP, yet the IMF deems the nation ‘rich’ enough to recover from the recent quake. Just goes to show the depths of Keynesian insanity that debt = prosperity.

WASHINGTON (AFP) – The International Monetary Fund said on Thursday that Japan has the financial means to recover from a devastating earthquake and ensuing massive tsunami.

As the official toll of the dead and missing after Friday’s quake and tsunami flattened Japan’s northeast coast topped 15,000, the IMF stressed that Japanese authorities were taking the right steps to deal with the disaster.

“The most important impact on Japan is the humanitarian one,” Caroline Atkinson, an IMF spokeswoman, said at a news conference.

“The most important policy priority is to address the humanitarian needs, the infrastructure needs and reconstruction and addressing the nuclear situation,” she said.

“We believe that the Japanese economy is a strong and wealthy society and the government has the full financial resources to address those needs.”

In addressing the issues of the impact of the disaster on the world’s third-largest economy, the direction the Japanese authorities has taken “is the appropriate policy,” she said.

On the fiscal side, the most important goals were to “revive the Japanese economy and get growth.”

Asked whether Japan had asked for IMF assistance, Atkinson said: “Japan has not requested any financial assistance from the IMF.”

« page 3 of 7 »

May 2012
S	M	T	W	T	F	S
« Apr
		1	2	3	4	5
6	7	8	9	10	11	12
13	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30	31