by Tyler Durden
"It will surely take at least a decade... for the world economy to get back to decent shape"
is the somewhat shockingly honest (and at the same time hopeful that
ECOpocalypse does not happen before) outlook that the IMF's Olivier
Blanchard offers in a recent interview with Hungary's Portfolio.ru via
Reuters. His diatribe of expectations that Germany would have to accept higher inflation, the US had to fix its fiscal problem,
"Japan is facing a very difficult fiscal adjustment too"
is more an understatement of facts than a forecast but on the
bright-side he thinks China has turned the corner on its asset boom (but
faces slower growth ahead). The reality is that, as he also notes,
debt reduction (via default or deleveraging) is unavoidable
and while he believes that this can be done without stifling growth in
this credit-fueled world in which we have lived (though no mention of
the tooth fairy). Dismissing the idea of inflation-targeting, he warns "
You
can have an economy in which inflation is stable and low, but behind
the scenes the composition of the output is wrong, and the financial
system accumulates risks." It seems the IMF is waking to the new
reality - perhaps as evidenced by their actual disagreement with Greece
over fantasy GDP data - though we fear what another decade of this will
do to global instability.
http://www.zerohedge.com/news/2012-10-03/imf-brings-good-tidings-prepare-another-lost-decade
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