imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

US Expert Sees Danger of World Recession

by Lars Borchert Thursday, Sep. 16, 2004 at 3:48 PM
mbatko@lycos.com

"The new administration elected in November 2004 must systematically reduce the deficits. Otherwise an inflation threatens. America within the next two years could lead into a recession.."

US EXPERT SEES DANGER

OF A WORLDWIDE RECESSION

By Lars Borchert

[Economic expert C. Fred Bergsten sees acute dangers for the worldwide economic situation. The recently increased growth rates are endangered if these risks are not immediately tackled. A new recession is possible.]

[This article originally published on September 10, 2004 in the Berlin Netzzeitung is translated from the German on the World Wide Web, http://www.netzeitung.de/spezial/globalvillage/304504.html.]

Jubilant bells resounded a few weeks ago. The International Monetary Fund (IMF) raised its growth forecast again for the world economy and predicted a 25-year high for 2004. Worldwide growth should reach nearly five percent, it said. In 2005, the growth will still be 4.4 percent despite the constant climbing oil price.

However C. Fred Bergsten, world- renowned economic expert and director of the International Economic Research Institute in Washington, now puts a damper on the burgeoning euphoria. In the online edition of the British economic magazine “The Economist”, Bergsten identifies five concrete risks that hang menacingly over the world economy like a sword of Damocles.

THE RISKS IN THE US ARE HOMEMADE

Three of the greatest risks come from the US and are partly homemade by the Bush administration, Bergsten says. He identifies another risk in a massive uncontrolled decline of the Chinese economy and the fifth in the oil price rising irrevocably.

In addition, that “most of these problems are mutually conditioned”, Bergsten emphasizes, could lead to a fatal chain-reaction. Another oil price shock, the collapse of the dollar or another skyrocketing US budget deficit could lead to recession, higher inflation or exploding interest rates.

Bergsten sees the three risks in the US as closely connected: “An increasing hole in the state budget – on the roundabout way through the growing deficit of the trade balance – leads to an intensified protective tariff policy and further weakening of the dollar.

RECESSION IN THE US THREATENS

When US president George W. Bush took over the government at the beginning of 2000, his predecessor Bill Clinton left him an impressive budget surplus. However in the meantime the US is running an enormous trade deficit and an exorbitant budget deficit.


The new administration elected in November 2004 must systematically reduce the deficits. Otherwise inflation threatens. America within the next two years could lead into a recession, Bergsten warns. This recession will spread to Europe on account of the inevitable upgrading of the Euro. Experts see the Euro at 1.50 dollars or more in this scenario.

In his prognosis, Bergsten refers to Paul Volker, Alan Greenspan’s predecessor as head of the Federal Reserve. Volker predicts with a 75-percent probability a drastic fall of the value of the dollar within the next five years.

HARD LANDING OF THE CHINESE ECONOMY

Risks are not only lurking in the land of formerly unlimited possibilities. The boom in the Chinese economy amounted to 20 percent of the worldwide economic growth in the past three years alone. However this development cannot continue according to Bergsten. “Driven by run-away credit and an unreasonable investment level – that alone amounts to half of the gross domestic product of the country -, the Chinese growth must be slowed down”, he explains. Competent politicians with great sensitiveness and circumspect monetary policy measures must prevent a belly-landing of the whole economy.

“If China attempts to steer its excessive economic boom in orderly paths, this will lead to a seven-year decline in growth”, Bergsten says. “The effects on worldwide growth will be considerable” whether there is a decline in growth or a dramatic belly-landing.

THE IMF WARNS OF CHINESE RISKS

In this point, Bergsten’s scenario corresponds to the most recent IMF report. The China experts of the International Monetary Fund point to necessary measures to tame the overheated business climate in the economic wonderland of the middle.

Several IMF directors advised the Chinese central bank to tighten its monetary policy to guarantee a moderate economic cooling down. In the first six months of 2004, the Chinese gross domestic product amounted to an annual rate of 9.7 percent. Therefore the IMF raised its aggregate annual forecast from 8.5 percent to nine percent. If the efforts of the Chinese government for moderate growth should succeed, the IMF still predicts a growth of 7.5 percent for 2005.

CONSEQUENCES OF AN OIL PRICE SHOCK

Bergsten names the threatening explosion of energy price as the last risk that is already felt worldwide. A few days ago, the crude oil price registered an historical all-time record of per barrel (159 liters). In view of the constantly rising demand, the price could rise to -70 per barrel even without greater political problems or terrorist threats.


With the continuing attacks in the Middle East and Russia, Bergsten sees the danger that the price could climb even higher. This development will be very dramatic since every rise of ten dollars per barrel means a decline of the annual worldwide growth rate of a half percent – or 0-300 billion, Bergsten calculates. This loss will not be offset for several years.

Not long ago Fed chief Greenspan in speeches before the US Congress and economic representatives repeatedly emphasized that the three recessions of the post-war time were triggered by Bergsten’s fifth risk, an enormous rise in the oil price.

SUSTAINABLE POLITICAL MEASURES ARE NECESSARY

If only one of these five risks occurs, this will cause a clear decline of the IMF’s current growth forecast, Bergsten stresses. If two, three or even all five occur, that will mean the end of the present economic course. The world economy will enter into a recession. The consequences will be a suddenly increased inflation, considerable higher interest rates, greater unemployment, currency conflicts and escalating protective tariffs. This scenario could even turn out more depressing in view of the terrorist attacks threatened worldwide according to Bergsten.

To prevent this, the Washington economic expert urges resolute actions from his government: conversion of long-overdue measures to offset the budget holes. At the same time China must no longer live in the political shadows and take a decisive leadership position in the limelight of world politics. The challenge of the oil-producing countries and the leading economic nations is to prevent the threatening oil price shock and guide prices in reasonable paths. If this does not succeed, the present rosy forecasts of the IMF for worldwide economic growth in the coming years will dangerously hang in the balance.





Report this post as:

Local News

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

Watch the Debate: Excluded Candidates for Governor of California M31 5:20AM

Change Links June 2018 posted M28 7:41AM

The Montrose Peace Vigil at 12 Years M22 8:01PM

Unity Archive Project M21 9:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 10:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 9:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 8:57PM

California police agencies violate Brown Act (open meetings) M02 8:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 11:47PM

Change Links May 2018 A27 8:40AM

Worker-Owned Car Wash on Vermont Closed A27 5:37AM

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A13 12:39AM

lausd whistle blower A11 6:58AM

Website Upgrade A10 10:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 8:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 6:58PM

Change Links April 2018 A01 6:27PM

More Local News...

Other/Breaking News

Chuck Grassley: Women Abusing, Animal Murdering, Illegal War Supporting Criminal S22 2:58AM

Finance Capitalism and the Digital Economy S21 4:45PM

Muselières syndicales, muselières patronales S21 7:19AM

Jeff Bezos, Amazon, The Washington Post, Whole Foods, Etc S21 2:50AM

Why Choose Nut Milk Over Cows' Milk S21 1:01AM

Antrhopocène, le grand effondrement S19 9:53AM

Creative Destruction Hack Diamonds Windows/iOS/Android - Creative Destruction Generator S19 12:51AM

Abolir l'économie S18 11:18AM

The Dictatorship of Corporations S17 5:26PM

18 Lethal Consequences Of Hunting S17 3:13PM

Paraphysique de l'outplacement déontologue S15 6:51AM

Creative Destruction Hack Mod Generator S15 3:49AM

Shopping du bashing S14 8:42AM

After Lehman Brothers, Experts Say Global Financial Crisis Can Happen Again S13 8:28PM

“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen S12 9:30PM

Probabilités de fin d'humanité S12 6:49AM

Florida Area of Migrant Farmworkers Denied Right to Construct Health Clinic near NaplesCIW S11 2:57AM

Propagande de virus, virus de propagande S10 7:34AM

Steer clear of work morality! S09 12:10PM

Sweatshop Lodge Ceremony Continues in US Fed Prisons Led by Inmates S08 6:17PM

Paraphysique de l'origami S08 7:11AM

The Shortwave Report 09/07/18 Listen Globally! S06 11:23PM

August 2018 Honduras Coup update S06 12:28PM

Du réussissement putréfié S06 10:55AM

Brett Kavanaugh Filled The 5th Circuit With Execution Judges S06 6:14AM

Log S06 4:25AM

Augusta Georgia Woman Gets 5 Year Prison Sentence for Writing About Russians Crime Acts S05 8:29AM

Paraphysique de contextualité S05 8:29AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy