Dun dun DUH!
And the Fed has decided to… Read more
Here is a simple calculation. The German Green Party is saying Dominique Strauss Kahn told parliamentarians in Berlin that Greece might need loans of up to €120bn or nearly four times its 2009 budget deficit. Apply the same ratio to Britain, and you soon see, the UK could never go to the IMF if it cannot finance its public debt. The sum required would be £652bn or roughly $1,000bn – more than the Fund’s funds.
If, as the Conservatives suggest, anything other than a Tory victory would see Britain banging on the IMF’s door, think again. Default and restructuring is much more likely than going “cap in hand” to the Fund.
Rest of World
Jürgen Stark has warned of a “full-blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan face even greater challenges than the eurozone.
His comments were sparked by the escalating crisis over Greece’s public debt, but he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds. This was not an issued being “discussed at present,” he told journalists. Read more
Brazil’s central bank is expected to raise its core interest rate by as much as a full percentage point this evening as the unexpectedly fast pace of economic growth puts increasing pressure on prices.
Predictions for economic growth, inflation and interest rates at the end of 2010 have all risen sharply in recent weeks, adding to near-certainty among economists that the bank will raise its target overnight rate, known as the Selic, for the first time since September 10 2008 – less than a week before the collapse of Lehman Brothers and the ensuing global crisis took the pressure off an economy that was showing dangerous signs of overheating. Read more.
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